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Real Estate Terminology Made Easy

Real Estate Terminology Made Easy

AGENT  “ A registered person employed to facilitate the sale of a property on behalf of the vendor.

ALLOTMENT “ A section of land subdivided from a larger portion of land generally referred to as a lot.

APPRAISAL “ An opinion of your properties salability and estimated market worth of sale price based on current market conditions and your properties characteristics. Not to be confused with a written valuation.

ASSETS “ What you own.

AUCTION “ The sale of a property by a bidding process on a given day. Properties usually have a reserve (minimum) price and if a bid doesnt reach this minimum, the bid is passed in�.

BREACH OF CONTRACT “ Not fulfilling any terms of the contract.

BRIDGING FINANCE “ A short term loan, usually at a higher rate of interest, which helps people to cover the purchase of a property while waiting to sell or settle on theirs. The security is usually on both properties.

BUILDING REGULATIONS “ These are designed to uphold the standards of public safety, health and construction. They are put in place by local Authorities to control the quality of buildings.

CAPITAL GAIN “ The monetary gain obtained when you sell a property for more than you paid for it.

CARAVAN “ A term used by agents when they take all the sales people from their office through a property so they can all familiarize themselves with the property for marketing to their buyers.

CAVEAT “ A document lodged by a person with a legal interest in a property, to ensure the property is not sold without their knowledge.

CAVEAT EMPTOR “ Latin for let the buyer beware, in certain cases this puts the burden on the buyer to be satisfied before purchasing a property.

CERTIFICATE OF TITLE “ A document which details the ownership of a property along with property dimensions and other details.

CHATTELS “ Any removable items which are sold with a home typically carpets, light fittings, curtains, dishwashers etc.

COMMISSION “ The fee payable to a real estate agent for selling a property.

COMMON PROPERTY “ Areas on a title which have joint ownership with another property, often common with cross-leased, strata title and unit Title properties.

CONDITIONAL CONTRACT “ A contract that is agreed to by the vendor and the buyer, but where one or more conditions need to be met, usually within a specified time period, by either the buyer or seller. For example, it is subject to the purchaser raising finance from a specific lender within a few days.

CONJUNCTIONAL SALE “ A sale which is arranged by an agent working on behalf of the buyer and the agent who has an exclusive listing to sell the property. In other words they are working in conjunction or together.

CONTRACT OF SALE “ A written document that sets out the terms and conditions for the purchase or sale of land and all improvements thereon.

CONTRACT FOR SALE OF LAND OR STRATA TITLE BY OFFER AND ACCEPTANCE “ The contract between the buyer and the purchaser.

CONVEYANCING “ The legal process transferring the ownership of property and money, making sure that everything is legally correct, as the property transfers from one owner to another. This is usually done by a settlement agent or solicitor.

COVENANTS “ Special rules and regulations which might apply to a property regarding its use.

DEPOSIT “ A defined percentage of the purchase price or an agreed amount paid by the purchaser which is held in Trust as confirmation of intention to buy.

EASEMENT - A right held by someone to use land and belonging to someone else for a specific purpose. Mains, drains and water pipes are usually covered by an easement.

ENCUMBRANCE “ An easement, mortgage, or other liability on a property which impedes its use or transfer.

EQUITY “ The value you hold in your home. The total value less any mortgage or other liabilities on a property.

ESCAPE CLAUSE “ This allows the vendors to issue notice to a conditional purchaser that unless that purchaser confirms the sales as unconditional within a short stipulated time, then the vendor can proceed with another offer from another party.

EXCLUSIVE LISTING/AGENCY “ Only the agency appointed has the right to sell the property.

INTEREST ONLY LOANS “ A loan on which only interest is paid periodically and the principal is paid at the end of the term.

INVESTMENT “ The purchase of an asset such as real estate with the ultimate goal of producing capital gain on the resale of the asset.

JOINT TENANTS “ The equal holding of property by two or more persons.

LAND TRANSFER OFFICE OR LAND TITLES OFFICE “ A Government department where all property records are held and any changes are registered. These are public records and therefore you can go there and look up any title to a property.

LEASE “ A document granting possession of a property for a stated period without transferring ownership. The lease document specifies the terms and conditions of occupancy by the tenant, including period of occupancy, rent payable etc.

LIABILITIES “ The outstanding debts you owe.

LISTING AUTHORITY “ A contract between an owner of a home and the real estate company selling the property. It is normally for a set number of days and sets out the commission rate and any additional costs. This states whether it is exclusive, general or mutli-list, tender or Auction listing.

MATURITY DATE “ The last day of the term of the home loan agreement. The home loan must be paid in full or the home loan agreement renewed.

MORTGAGE “ The security over property given to the lender for the repayment of the loan. The lender (mortgagee) has the right to take the property if the borrower (Mortgagor) fails to repay the loan.

MORTGAGEE “ One who lends money for the property.

MORTGAGOR “ One who borrows money to purchase property.

NEGATIVE GEARING “ Where the mortgage repayments exceed the income received from a rental property.

OFFER TO PURCHASE “ A formal offer for a specified property, normally made on a sale and purchase agreement.

PASSED IN “ A property is passed in at an auction if the highest bid fails to meet the vendors reserve price.

PLAN “ This shows the house design, elevation of the house, number and size of rooms, kitchen, bathroom and laundry layout and the position of the house on the land.

POSSESSION DATE “ The day the purchasers take occupancy of the home, normally when the ownership of the property transfers and the balance of the purchase price is paid to the vendor.

PRINCIPAL  1) The actual amount of money that has been borrowed to buy a property excluding interest. 2) The owner of a real estate agency.

PRIVATE TREATY SALE “ Sale of property via an agent through private negotiation and contract.

PURCHASER “ The eventual buyer of the home.

RESERVE PRICE “ The amount below which a home owner will not sell on the day of auction.

RIGHT OF WAY “ Right of access across a property.

SECURITY “ Property offered as backing for a loan. In the case of a home loan, the property itself usually acts as security.

SEMI-DETACHED “ Two buildings joined by one common wall.

SETTLEMENT “ Completion of a sale when the balance of the contract price is paid to the vendor and the buyer legally entitled to take possession of the property.

STRATA TITLE/UNIT TITLE “ A title which gives you ownership of a small piece of a larger property, including air space�. You have the sole right to a particular unit and can lease, sell or dispose of your unit as you desire. You also have undivided share of the common land and become a member of the body corporate which controls the maintenance and has stipulated rules governing occupation.

SUBJECT TO FINANCE “ A condition inserted into a contract for the benefit of the purchaser. This makes the contract subject to the purchaser, confirming that they have raised finance within a certain amount of time.

SURVEY “ Confirmation of the property boundaries and improvements.

TENDER “ A tender involves potential purchasers placing confidential bids for a property by a specific date. The bids may or may not include condition and any bid can be accepted or rejected by the vendor.

TITLE SEARCH “ The process of examining the land title to ensure the vendor has the right to sell and the therefore transfer ownership. It details the names of the owners and the information about the property, such as encumbrances or caveats on the title.

UNCONDITIONAL CONTRACT “ A contract for the sale of a specific property that the vendor and purchaser have agreed upon that has no condition or the condition have been confirmed as having been met and therefore constitutes a sale.

VACANT POSSESSION “ When the ownership is transferred from the sale of a property there will be no tenants living in the property, or leases giving someone else use of the property.

VALUATION “ Assessment of the value of a property given in a written report, by a licensed valuer.

VENDOR “ A person who owns the property for sale.

ZONING “ Control of the use of land exercised by the local authorities.

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