Understanding Real Estate
Real Estate 101
Types of Real Estate Transactions
Purchase and Sale
Most common transaction: a property is sold by one party and bought by another.
Involves a contract of sale, settlement process, and legal title transfer.
Leasing/Renting
- Property is rented out for a set period in exchange for rent payments.
Can be: - Residential lease (home, apartment)
- Commercial lease (office, retail, industrial)
Includes agreements on terms, duration, and responsibilities
Off-the-Plan Purchase
- Buyer agrees to purchase a property that is not yet built or completed.
- Often in new developments or apartment projects.
- Risk involves changes in value or construction delays.
Auction
A public sale where buyers bid, and the property is sold to the highest bidder.
Often has no cooling-off period.
Used in competitive markets to drive up price.
Private Treaty
- A standard sale where a property is listed at a fixed price or negotiable range.
- Buyers can make offers, and terms are negotiated privately.
Vendor Finance
- The seller acts as the lender, allowing the buyer to make payments over time.
- Useful if buyers can’t get traditional finance.
Rent-to-Own
(Lease Option)
Tenant rents the property with the option to buy it later.
A portion of rent may count toward the purchase price.
Popular with buyers who need time to build deposit or credit.
Assignment of Contract
- A buyer sells their rights under a contract to another party before settlement.
- Often seen in off-the-plan or pre-construction deals.
Short Sale / Distressed Sale
The property is sold for less than the amount owed on the mortgage, often to avoid foreclosure.
Requires lender approval and usually occurs under financial hardship.
Foreclosure / Mortgage Sale
- The lender repossesses and sells the property after the borrower defaults.
- Buyers can purchase at a discount, but conditions are strict and “as-is.”
Subdivisions &
Land Sales
Land is subdivided into smaller lots and sold individually.
Common in property development or rural-to-residential conversions.
Property Exchange / Swap
Two property owners agree to swap properties (e.g., house for apartment).
Often involves valuation and cash adjustment to match values.
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