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.