Very few transactions are as lengthy or complex as buying and selling property. Peppered with industry jargon and legal terms, they present a multitude of potential pitfalls that easily trip up novices and can even generate a few unpleasant experiences for market veterans if the purchase isn’t relatively straightforward.

According to Lew Geffen Sotheby’s International Realty Director Sandy Geffen, certain terms seem obvious and it’s not hard to figure out the definition of an Agreement of Sale, but it’s also essential to understand the conditions that apply to ensure a seamless transaction without any rude surprises along the way that could delay or even scupper the chance of moving into your dream home.

For those buyers and sellers who might be too afraid to ask, she offers a rough guide to translating “property-speak”.



The first step – even before the legalities and colossal documentation processes begin – is finding a home to buy. At this stage it helps to be at least passably fluent in real estate jargon, Geffen explains, or the search can be long, tedious and frustrating because you’re unable to weed out options that don’t suit your needs.

Among the most common “watch-phrases” in property descriptions are:

·         Compact – It may be utterly gorgeous but it will be small.

·         Character – You can be assured that the property isn’t bland or conventional, and will be most suited to a niche market buyer.

·         The property has excellent transport links – It may be conveniently close to a Bus Rapid Transit route, but it may also overlook a busy freeway or railway line so check the location before you go for a viewing.

·         In need of modernisation – The home probably hasn’t been updated since the 1970s or 80s and most likely needs a minimum of a full bathroom and kitchen overhaul.

·         An ideal first three-bedroom home – This usually means it’s a great option if you need two bedrooms, plus a small study.

·         Cute or cosy – It may well be, but it’s also likely to be small and more suited to a couple than a family.



For both buyers and sellers, it’s once someone has found their dream home that the real work begins.

Geffen says it’s at this stage that attorneys, municipal authorities and financial institutions get involved, each requiring sets of paperwork that contains a lot of legal-speak.

“There’s no such thing as a stupid question when you’re entering into a legally binding contract, so if you’re not sure of something, ask!” Geffen says. “It’s far better to ask a simple question ahead of time than sign something you don’t understand and end up in very costly hot water afterwards.”

Among the standard phrases home buyers and sellers are likely to encounter during the transaction process are:

·         Agreement of sale – This is the basic contract of sale and purchase between a willing seller and a willing buyer and it supersedes all previous verbal agreements. It is a legally binding document signed by both parties in which they agree on a purchase price, sale conditions, and date of sale.

·         Appraised Value – A property’s fair market value which is determined by a qualified appraiser based on his/her knowledge, experience, and analysis of the property. This is a brick and mortar valuation. A property consultant provides a market-related valuation.

·         Bond Assurance/Insurance – Also known as home loan insurance. It is taken out on the life of the borrower to cover the amount owing on the home loan in the event of death or disability.

·         Bridging Finance – A temporary loan given to help a buyer purchase a new property before the property currently owned has sold.

·         Clearance Certificate – A document issued by the local municipality to confirm that all rates, taxes and levies and water, electricity, and sewerage services are paid up to date when a property transfer takes place. Transfer cannot take place without it.

·         Conditions of title – These are the restrictive conditions limiting an owner’s rights. They are recorded on the title deed to a property and cover matters such as servitudes and building limitations.

·         Conveyancer – A specialist attorney who has qualified as a conveyancer and can attend to deed office transactions such as the transfer of a property from a seller to a purchaser and the registration of mortgage bonds and servitudes. 

·         Deed of Sale – A formal document and a record of the transfer of ownership of property from one person to another, outlining the terms of the agreement.

·         Fixtures and fittings – These are additional attachments in a home which are considered to permanently belong to it such as curtain rails, hobs and eye-level ovens and anything that is in or on or attached and varies from province to province. These may not be removed by the seller when he or she vacates the property. 

·         Freehold – A property where the owner has full rights to the entire property and takes on all responsibilities, like a free-standing house, whereas Sectional Title properties are units within a larger property like a block of flats which are sold individually, where an owner has full rights to his or her section and certain rights to common property.

·         Initiation Fee – The fee charged by a bank to cover the initial costs of processing a home loan application, for example, the property appraisal and a credit report.

·         Prior occupation – A buyer’s option to take occupation of a property before the transfer takes place. An agreed rental (occupational rent) is usually payable by the buyer until registration of transfer. 

·         Offer to purchase – The document setting out the proposed purchase price and conditions on which a buyer has signed and is prepared to purchase a property. If the seller accepts and signs it, the offer to purchase becomes a valid sale agreement. 

·         Pre-Approval – When the buyer has successfully completed a loan application by providing debt, income, and savings documentation which an underwriter has reviewed and approved. Once a property is chosen, it must also meet the underwriting guidelines of the financial institution before the actual bond is granted. 

·         Subject-to sale – When a sale contract will only become unconditional and binding between the parties if and when the buyer sells his own property. A certain time period is stipulated which will need to be negotiated between buyer and seller.

·         Suspensive condition – A provision in a contract which suspends the confirmation of the sale until a specific condition, such as the approval of a mortgage loan, is fulfilled.

·         Title Deed – Filed in a deeds office, this is legal proof of property ownership and contains all the details of the property, the sale agreement, and its owner. If another person or institution has rights over the property, like a bank which holds a mortgage bond over the land, it will be included in the title deed. The bank has the right to hold the original title deed while a mortgage is in place.

Geffen concludes that to create a seamless sale and purchasing processes consumers should educate themselves, but above all ensure they’re dealing with competent real estate professionals who are certified and experienced. They must also be backed by reputable, well-established brands that have extensive market reach and demonstrable partnerships with successful bond originators and highly-regarded conveyancing attorneys.

‘True industry professionals operate within a support network that offers a ‘full house’ service from start to finish, demystifying the process and making it as straightforward as possible for their clients to successfully conclude property transactions in the shortest space of time. If you’re not getting that level of service, find another realtor.”

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