3 REAL ESTATE TERMS SELLERS NEED TO UNDERSTAND
Category Industry News
While words like voetstoots and CMAmake perfect sense in the mind of a real estate professional, to the average Joe, they make about as much sense as algebra to a six-year-old. Below is a brief glossary to help you understand the important real estate terms involved in the selling your home:
- 1. Comparative market analysis (CMA)
A comparative market analysis is a report that qualified real estate professionals use to reach an accurate value for a property. The report shows the values for which comparable homes in the area have sold. If you disagree with the value presented to you by a real estate professional, ask to see the CMA report to find out what similar homes in your area are selling for. - 2. Qualified Buyers
A qualified buyer is someone who has been pre-approved by a financial institution or a bond originator for a home loan. These are the best kinds of buyers as the seller has less risk of the deal falling through after the initial offer has been accepted. If you have more than one offer on the table, a qualified buyers is the one to whom you ought to give preference. - 3. Voetstoots Clause
A term used by the Consumer Protection Act to describe the sale of an item 'as is', this clause exists largely to protect sellers. To understand what your rights are in relation to this, there are two secondary terms between which you need to understand the difference:
a) Patent Defect
These are clearly visible defects that can be discovered on inspection of a property. Because patent defects are visible without a professional inspection, the buyer has no recourse against these types of defects and it is their responsibility to spot patent defects before purchasing the property. To ensure you're protected, list all patent defects in the offer to purchase and state who is responsible for fixing them.
b) Latent Defect
These defects are not easily picked up by a superficial inspection, such as a leaking roof or faulty geyser. Legally, the seller is responsible for these kinds of defects for a period of up to three years from the date of discovery. But, the voetstoots clause protects the seller against all defects that are unknown to him/her. Unless the seller deliberately concealed a defect from the buyer, and the buyer can prove this, the seller cannot be held liable for the defect.
Author: Ask RE/MAX