12 Aussie translations for buying property in USAMay 1, 2015
You say “Tomato Sauce” and I Say “Ketchup”.
America Property Source reached the 5-year milestone in April 2015. We love enabling foreign investors to safely invest in the USA real estate market – in Phoenix, Arizona and Cleveland, Ohio. While Australia and the United States both speak English and we share many of the same western cultural philosophies, our language is actually very different.
For any investor who’s ventured offshore, there’s a whole new vocabulary to learn. As an active real estate investor myself in both the USA and Australia, I’d like to share a list of the top 12 key terms that you will come across when buying property in USA. I’ve translated the Aussie to Yank for you.
- Property = Real Estate It’s called the real estate market in America
- Vendor = Seller Strait up translation
- Settlement = Closing You will also hear C.O.E. which stands for Close of Escrow
- Ernest Money = Deposit When your offer is accepted an agreed upon earnest money deposit is held in escrow with terms accepted by both the buyer and seller
- Trust Account = Escrow An escrow account is an independent account where funds are held prior to the closing of a real estate transaction
- Conveyancer = Title Agent In most states, real estate transactions are administered by an independent third party or Title Agent. Title Agents conduct title searches, provide title insurance and manage escrow accounts. In some southern States attorneys are required for real estate transactions.
- Outgoing = Expenses These are the holding costs associated with owning investment property.
- Rates = Taxes In the US, rates translate to taxes are an annual expense that investors will factor into their holing costs.
- Body Corporate = HOA (Home Owners Association) Townhouses, units and certain US housing subdivisions have HOA’s that maintain common areas, provide blanket insurance policy, pay for municipal services, certain utilities, etc.
- Estate Agent = Agent In the US, an real estate agent works under a Real Estate Brokers license.
- Officer in Effective Control (VIC) = Broker Each state has its own transaction and hours of experience requirement to qualify for a real estate brokers license.
- Private Money Lenders = Hard Money Lenders Hard money is typically private money used for real estate transactions in the US. Most loan terms are short with high interest rates up to 18% per year.
Here are two additional terms that are unique to USA real estate investment and do not translate to Aussie;
- Limited Liability Company (LLC) – a LLC is a type of company structure that doesn’t exist in Australia and is the most common way for investors to own American real estate. The LLC structure offers members (owners) limited liability and offers liability protection for an investor’s other assets and net worth.
- Multiple Listing Service (MLS) – This is a real estate agent listing database for all advertised “on market” houses for sale in America. The MLS offers the most accurate data for sales comparables of recently sold similar houses in any given market. Only licensed agents with a MLS subscription have access to this data. Unlike Australia, your USA real estate agent will provide you with the appropriate data free of charge.
Savvy Australian investors are buying up houses for sale in America at an increasing rate. The fact is the cost barrier to enter the USA real estate market will always be less than Australia allowing investors to accelerate the growth of their portfolios and multiply their cash flow. Plus there in no stamp duty or land tax in the USA!
Buying or selling real estate in the United States is slightly different than Australia so it’s always a good idea to ask questions when a term or procedure is new or different to your past experience. If you have questions about investing in USA real estate, pick up the phone and call America Property Source today, 61(3) 9111 0424. We look forward to hearing from you.