THE LANGUAGE OF REAL ESTATE

Moving from buying and selling our first home, to repeating the process with very little understanding of the processes involved with our second buy and sell, the process unfolded according to the instruction and guidance of the various real estate agents. We were naive, we were innocent, the process, and language of real estate, outside our scope, even though we both held responsible jobs with their own intricacies of language. 

Real estate agents rely on this. They rely on a lack of knowledge, of experience, of either buyer or seller. That their words, their language, are the only words that matter. You should believe and obey to get your best outcome. This is smoke and mirrors at their finest. We have become better informed as consumers due to the wealth of information available now. However, we lack the practice, the experience, and the knowledge that we have can become dangerous when wielded with confidence and no day to day experience. There is a saying, “enough knowledge to be dangerous” (*see Ai explanation below). 

Becoming a guide in the residential real estate space means encouraging your learning, and giving the day to day experience that makes a formidable team, ensuring your best outcome. Real estate agents are not huge fans of real estate advocates because they are then faced with an opponent who has the same knowledge (often more), speaks the same language, and in my case, more experience than they have. We are a challenge, and one they would prefer not to face. 

In the spirit of encouraging consumers to pursue their own knowledge within real estate, I share information that aims to level the playing field somewhat. 

THE LANGUAGE OF LEGISLATION IN REAL ESTATE

Real estate is highly legislated. If you blink then you have probably missed the latest update. It’s a big factor as to why I remain a member of the REIV. Their role, or part of it, is to educate their members about any such changes. Common higher profile legislative changes over recent years in real estate sales concern underquoting and material facts. In property management, there have been so many changes that many left the industry rather than attempt to keep up. Another big one on the horizon is AML legislation. AML is anti money laundering and real estate agents are having to become one of the guardians of the gate to remove this practice from society. Lawyers, conveyancers, and finance professionals are the others. 

How does this impact the consumer? Underquoting should ensure that the price range on a property is somewhat accurate, that the agent believes the price to be reasonable based on comparable homes sold within the same area and within 6 months. This varies in regional Victoria. Buyers should be confident that any due diligence such as a building and/or pest inspection will not be wasted time and or money because the price guide is fairly accurate. Rental changes are supposed to protect the tenant, unfortunately, it has had the effect of many property investors exiting. This is a major problem as we have a housing crisis and social housing is inadequate. Slum lords are out, expectations of what a landlord MUST provide are high. 

THE LANGUAGE OR REAL ESTATE AGENTS IN REAL ESTATE

Real estate agents train, they role play, they are taught about the psychology of buyers and how to build rapport with sellers. They are friendly, they are trained to be. The better the connection they have with the buyer or seller, the more believable they seem to be, the more trust.  

Words used are not necessarily to mislead, but do rely on jargon that remains unexplained with few buyers or sellers asking them to explain what they mean. When I ask an agent to explain, sometimes they don’t have the right meaning or understanding themselves. It is an industry where work arounds to legislative changes are immediately explored.

THE LANGUAGE OF BUYING THROUGH AUCTION SALE IN REAL ESTATE

Buying at auction has a different language to private sale. No cooling off, no finance, no building, no pest inspections, all applicable in a private sale, are disallowed in auction. You can however, do the inspections prior, your due diligence MUST be undertaken prior to the auction. 

Passed In, the Reserve, Unconditional, Vendor bids, all common words within the auction language. 

Passed In = didn’t meet the sellers reserve price

Reserve Price = the lowest price the seller will accept

Unconditional = no conditions are placed on the contract

Vendor bid = a bid placed by the auctioneer on behalf of the seller to get the price to a more acceptable level. 

As a consumer, learn the language before you bid. Make sure you understand the difference between the rules of private sale and auction. 

THE LANGUAGE OF BUYING THROUGH PRIVATE SALE IN REAL ESTATE

Private sale does allow your purchase to have conditions placed on the sale. You may make your offer ‘subject to finance, building inspection, pest inspection’ as standard clauses. There are many other conditions you may also place on the sale. If the finance is not approved, the inspections uncover a major flaw, then as a buyer you can get out of the contract without penalty. 

There are of course rules around special conditions – time, for example. The conditions must always have a time limit, they cannot extend forever. 

Unconditional sales are loved by agents, and sellers. Once cooling off expires, the Sale is DONE, no further conditions to be met. Sometimes buyers say that it is an unconditional offer however the sale is subject to finance. The language is not clearly understood by the buyer, and what is actually meant needs to be teased out/explored before being taken to the seller. If the seller accepts your offer and then finds out it has conditions attached, then it is unlikely that your offer will continue to signed contracts as the terms of sale have changed. 

Cooling off is applicable within private sale. There are a few exceptions however they won’t impact the average consumer. As a real estate agent, I am not entitled to cooling off, which is one of the exceptions. Cooling off is 3 clear business days after you, the buyer, has signed the contract, that you may get out of the contract. You may lose 0.2% of the Contract price if you cool off. Sellers do not get cooling off. Once you have signed the contract as a seller then you are bound to it. 

THE LANGUAGE OF MONEY IN REAL ESTATE

Deposits are part of the contract. If you sign a contract then consideration is part of the deal. Does it need to be 10%, no. It has to have an impact on you as a buyer, if you don’t keep up your side of the bargain. It is generally 10% to serve real estate agents. If you buy subject to a special condition, then you may be asked to pay an initial deposit. This deposit should cover the cooling off fee. It’s a relatively small amount that holds the house waiting for your conditions to be met. 

The balance of funds are payable on Settlement. This is the full Contract price less the deposit already paid. The balance is paid when the Title of the property changes from the Sellers name to the buyers. 

If you renege on the Contract then you will most likely lose your deposit. You signed a legally binding document and are expected to cover your side of the transaction. Further fees may be payable if you do this. 

Generally, sellers care about the amount of money. Agents care about the Sale. Sellers want the most they can get for their asset. Buyers want to pay the minimum amount. Agents will get paid regardless of the Sale price. The actual amount may not make that much difference to the $$ going into the agents hip pocket. $10,000 to a seller, may only make $80 difference to an agent. 

Example: $1,000,000 sale price x 2% commission = $20,000. Agents percentage is 40% = $8,000

$990,000 sale price x 2% commission = 19800. Agents percentage is 40% = $7,920

Numbers, percentages, commission amount, agents percentage are estimates only.

Language is important, communication vital. Many a sale is lost between the lines. Being crystal clear as a buyer, fully understanding the entire contract, down to the conditions, the initial deposit, before signing is essential to both buyer and seller. Agents may gloss over aspects, as a buyer or seller you cannot afford to let the gloss overwhelm you. It’s the nuts and bolts, the nitty gritty of a Contract that is financially, emotionally, and mentally crucial, and that’s where your real estate guide steps in. 

Don’t travel the path alone. Working together makes home buying easier.

Real Estate Guide
Advise. Assist. Advocate.

*Ai explanation

Ai informs us that this expression means : “Know enough to be dangerous” means having just “enough knowledge, skill, or experience in a subject to start working or cause changes, but not enough expertise to handle complex problems safely or efficiently. It often implies a risk of breaking things, making errors, or causing trouble, though it can also signify having enough foundational knowledge to initiate action, take risks, and learn quickly in entrepreneurial or creative contexts. 

• Negative Interpretation: Refers to overconfidence (Dunning-Kruger effect) where someone thinks they know more than they do, leading to mistakes, dangerous situations, or inefficiency.
• Positive/Neutral Interpretation: Implies having enough proficiency to be functional, productive, and able to break through constraints without being slowed down by excessive, overly cautious expertise.