TERMS THAT ARE COMMONLY USED IN THE REAL ESTATE BUSINESS
Purchase Price - The amount of money the seller is asking for the property.
Price per square meter - This is purchase price divided by the square meter size of the flat.
Earnest Money - A small amount of money which the purchaser leaves with the attorney to demonstrate desire to purchase the property.
Down Payment - The amount of money the buyer must give the seller (usually 10%-20%). The money is placed in the escrow account of the attorney until the Closing.
Escrow account - An attorney’s private, protected account where money is placed and cannot be touched until the time of the Closing.
Closing/ Closing Date - This is when the property is officially transferred to the new owner. At this time, the purchaser pays the balance of the purchase price.
Title/ Title Deed - The official document the new owner receives certifying ownership.
Tenant - One who pays to occupy a flat owned by someone else. It is common for a tenant to pay, in advance the first and last month’s rent plus a security charge which is usually equal to one month’s rent.
Rent or Let - The tenant pays the owner a monthly amount of money to live in the flat
for a specified period of time.
Rental Yield - The rent expressed in percentages
Capital Appreciation or Uplift - The expected increase in a property’s value over time.
Common Charge - This is money the tenant pays to the building manager for general maintenance. This is in addition to the monthly rent.
Building Fund Charge - This is a fee that some buildings have established whereby they charge the OWNER, usually annually, for major improvements or renovations.
Sale-leaseback - The seller agrees to stay in flat and pay rent to new owner of the flat.
Contract of sale - A written agreement between the seller and the buyer containing the terms and conditions of the sale such as purchase price, down-payment, closing date.
Stamp Duty - A government tax of 2%-6% imposed on the purchase price to the owner.