READING

The 10 words you MUST know when home hunting

The 10 words you MUST know when home hunting

Home deposit, Rent-to-own, Mortgage, Lease… The vocabulary of the real estate world is infinite! And there are very technical and specific words that we may not know the meaning of until we have to rent or purchase a property by ourselves, with a potential disastrous result! Let’s be honest: we all are going to face this moment at some point in our lives, so grab a pen and start studying them! And iff you’re already thinking about finding a home, you may be already familiar to these words. But, do you know exactly what they mean?

1. Lessor and Lessee

It is more common than we think to mix up these two concepts. They may be similar but it is important to know the difference:

A Lessor is the landlord, the legal owner of the property. He is the responsible to make sure that the house is free of legal obligations and that the lease agreement follows all the laws.
A Lessee is the tenant, the person who pays the landlord in order to make use of the property.

And, finally, a Lease is the legal document that collects the details, terms and conditions of the agreement between the lessor and the lessee.

2. Home Deposit

It is the amount of money that covers the possible damages that the tenant may produce in the property. Once the tenant leaves the house, the landlord reviews it and if everything is okay and all the payments have been done, he gives it back. Its value usually corresponds to a monthly payment but it doesn’t substitute any of them.

3. Down payment

Careful! It is not the same as the home deposit! A down payment is the amount of money that guarantees the seller of a home the execution of the contract. This means that, when you sign a contract to buy a home you need to give the former owner a small portion of the total amount to close the deal.

4. Rent-to-own

Also known as lease option, it is a contract composed by two subcontracts: one for the rent and one for sale. The tenant can live in the rented property for an specific period (usually from 1 to 3 years) and then he has the right to buy the house for an established price. This price discounts totally or partially the payments that have been already done as monthly rent. This option allows potential buyers to have time to improve their credit score. Although the rent is the same as in normal contracts, the lease option implies a down payment, which is higher than the home deposit.

5. Certificate of habitability

This is a document that confirms that a property follows the minimum requirements of health, hygiene, safety and structural stability regulations for people to live there. It also verifies that the building complies with planning permission.

It also regulates the useful minimum surface and the basic equipment (toilet, kitchen, hot water…). Unfortunately, the requirements are not very exigent so it is uncommon not to get it. Make sure that the house has this document updated before signing a rent or purchase agreement!

Don’t sign any document if you don’t understand it. It’s advisable to take more time to ask around your friends and relatives and clarify its content.

6. Community fees

The community fees are all the necessary expenses for the maintenance and repairment of the building and common services like elevators, concierge, heating or cleaning. It also includes assurances and taxes like garage licenses or drinking water supply. They are independent of the private expenses, which are the ones each tenant has for his own house.

Tip! Remember to ask for the certificate that assures that the property is up-to-date with community payments and if there are other expenses that may need future payments independently of the owner of the property.

7. Property Registration

It is a public and official document that identifies the current owner of a property and if it is bounded to any mortgage, leases, purchase options and such. Before engaging on a contract, make sure that the house is free of burdens and that it is up-to-date with all legal requirements. For example, if the home is tied to a mortgage, the seller must cancel it economically and register it before the sign of the agreement.

8. Surface of the property

The size of the house is probably one of the aspects to consider when home-searching, but this information can be tricky sometimes. Even if it may sound as a general concept, there are the 3 types of surfaces you have to differentiate:

The constructed area includes all elements (walls, beams, partitions, terraces…) and it is reflected in the plans of the house.

The usable surface area excludes the thickness of the elements mentioned before. For example, in the case of open terraces, half of the surface is considered in the calculation of the useful floor area.

The total area is the constructed area plus the common elements shared with the neighbours, like the portal, stairs, gardens…

9. Mortgage

It is an agreement between a person and a financial entity that allows him to receive money in exchange of giving it back -plus the interests- through periodic payments and putting his home as a guarantee. This means that the moneylender has the right to take his property if he doesn’t pay this money. It is a middle/long term loan (usually between 15 and 30 years) and must be enrolled in the Property Registration, both its beginning and end.

Note: Before engaging on a mortgage, first you have to calculate how much you can pay. You will have to take a look at the family income, expenses and savings priorities so you can see what fits your budget better.

10. Real Estate Appraisal

A property valuation is a commercial appraisal of a real estate to determine its value. It is usually a document prepared by a professional agent or property broker and contains information on the tax valuation, title, contribution, location, size, quality of construction and useful life of the building. It also takes into consideration economic, environmental and social trends, and governmental controls.


Digital Marketing Specialist

RELATED POST

  1. ann

    8 February

    I tried to register I put my info, a message came up and said you
    would e-mail me and I never received it.

    • Trovit

      8 February

      Hello Ann, we’re sorry to hear that! Can you send us an email to support@trovit.com indicating your email address so we can review it? Thank you!

  2. LINDA

    13 February

    I am looking for a flat to rent, R5500-00 – R7500-00 in the Welgemoed, Loevenstein area. An upmarket granny flat will also do.
    can you please contact me on 063 697 1063

    Thanks

    LINDA

    • Trovit

      13 February

      Hi Linda! We recommend you to take a look at our listings at Trovit to see if there are any flats that fit your requirements. We hope it helps! Thanks for writing to us!

  3. catherine naidoo

    13 February

    please assist me in finding rent to buy property in and around umhlanga. possible greenwoord park, glen hills, red hill, we looking at around between 5-850k we know its looks low but we currently have a property in jhb that we are in the process of selling in a rent to buy sale.

    • Trovit

      13 February

      Hi Catherine, thanks for your message! We suggest you to take a look at our listings at Trovit to see properties for rent and for sale. We also recommend you to use the search filters in order to find more accurate results . Greetings!

  4. Jenny

    13 February

    I am interested in puchasing an apartment in a condiminium around Damansara & other parts of Selangor.

    • Trovit

      13 February

      Hello Jenny! You can find apartments for sale in Damansara in this link. We hope it helps. Have a nice day!

  5. Shirley Hassen

    13 February

    My son/partner need to buy an older type rural home. They have $25, 000.00 for deposit/legal fees and are looking for a 4 bedroom house priced roughly in the $200.000.00 price. Having three teenage dependents they want a house with land (land doesn’t need to be manicured it is the required space for the kids)
    They would like around the Lithgow Bathurst areas.
    Shirley

    • Trovit

      13 February

      Hello Shirley, at Trovit we have plenty of properties that may be of your interest. We suggest you to try a search and use the filters for more accurate results 🙂 Thanks for writing to us!

  6. Randy Bayley

    13 February

    I am thinking of buying property close to a proposed mine site. Should I get the mineral rights for that property to prevent that mine from doing it?
    We want to see that property used for an Equine Assisted Therapy Ranch wouldn’t want it to be disturbed!! Thank you!!!!

  7. M Jeyaraman

    20 February

    Hello, I want shift my family to mysore Vijayanagar,1&2 stage within 5000 to 6000 rupees. With warm regards B M Jeyaraman, Mysore.

    • Trovit

      28 February

      Hello! We suggest you to take a look at our listings in our search engine to see if there are any properties that match your requirements. Good luck and thanks for writing to us!

Your email address will not be published. Required fields are marked *