As property professionals we regularly use specific terminology in our communications, often without spelling out what these terms mean, coming from a place of assumption that people just ‘know’. However, feedback indicates this is not always the case, so over the next two newsletters we have outlined a simple breakdown of some of the most common terms used in the context of real estate.
Appraisal: An estimate of a property’s market value based on comparable sales and agent opinion.
Valuation: A formal, evidence-based assessment of a property’s value undertaken by a qualified valuer.
Bank Valuation: An estimate of a property’s market value that is generally likely to be more conservative than actual market value.
Market Value: An opinion of what a property would sell for in a competitive market.
Market Price: What a willing, bank approved buyer will pay to a willing seller in an arm’s length transaction.
Offer: The price a willing purchaser would like to buy a property for.
Counter Offer: The price a willing homeowner suggests the prospective purchaser should increase to.
Private Treaty: A sale where the price is negotiated directly between the parties or their agents.
Auction: A sale, usually in public, by an auctioneer where the property is sold to the highest bidder – subject to reserve.
Open Listing: The responsibility for selling a property is shared by multiple agents. Commission is paid only to the agent that finds the buyer, but no single agent is accountable for a result.
Exclusive Listing: The responsibility for selling a property is granted to one agent. Commission is paid only when the agent finds the buyer, and the agent is fully accountable for the result.