REAL ESTATE TERMS EXPLAINEDElders Real Estate understand that buying or selling property can be a daunting experience.
We are pleased to provide this list of Real Estate terms, explained in plain english, that you may come across when buying or selling property.
Asking price: The listed price of the property. The owner may be willing to negotiate so this may not be the selling price.
Bridging loan/bridging finance: A short-term loan used to cover the financial gap between buying and selling.
Building inspection: A thorough inspection by a licensed builder that evaluates the structural and mechanical condition of a property undertaken at the buyer's expense.
Buyer's market: When the demand for property is less than the supply of property the advantage shifts to the buyer.
Certificate of title: A description of a property that includes the name of the registered owner and any encumbrances such as mortgages and easements. This will be included in the contract of sale prepared by the vendor's solicitor.
Commission: A proportion of the sale price (generally a percentage) of a property paid to real estate agent for negotiating the sale.
Contract of sale: An agreement in writing that details the terms and conditions in regards to the sale/purchase of a property.
Conveyancing: Traditional term for the legal work involved in the purchase and sale of a property.
Deeds: Legal title documents proving ownership. The deeds will be held by the mortgage lender.
Deposit: A percentage of the purchase price given at the time of exchange or winning bid at auction to bind the sale. It's usually around 10 percent of the purchase price.
Deposit Bond: A bank guarantee which can be purchased from the bank and used as a security in leiu of cash deposit payment.
Easement: A right that someone has to use the land that belongs to another. An example is a water authority having a sewerage easement.
Exchange of contracts: The point at which signed contracts are physically exchanged, legally committing the buyer and the seller to the purchase and sale of a property at an agreed price.
Fittings: Objects that can be removed from a property without causing damage.
Fixtures: Items such as built-in cupboards, stoves, dishwashers, etc, which are fixed to the property and cannot be removed without causing damage.
Listing: A written contract between an owner and a real estate agent, authorising the agent to perform services for the sale of the owner's property.
Local authority search: Procedure whereby a buyer's solicitor makes an enquiry to the local council regarding any outstanding enforcement or future development issues which might affect the property or immediate area.
Market value: The price at which a seller is happy to sell and a buyer is willing to buy.
Off the plan: When you buy off the plan, you are buying a property before it is built, having only seen the plans. This is commonly used for apartments or units under construction or soon to be built.
Owners corporation: The administrative body made of the owners of a group of units or apartments of a strata building.
Passed in: When the highest bid at an auction doesn't meet the reserve price set on the property. In effect, the property doesn't sell at the auction.
Private treaty: A sale of a property at an advertised price that can be negotiated (also known as private sale)
Reserve price: The minimum price which a seller will accept at auction.
Section 32: A legal document provided by the seller of real estate (vendor) to an intending purchaser. Its name comes from Section 32 of the Sale of Land Act, which requires a vendor to provide certain information to a purchaser BEFORE a contract of sale is signed (also known as a Vendor Statement).
Semi-detached: A property which is joined to another house.
Settlement: The sale of a property is finalised by the legal representatives of the vendor and the purchaser and the new owner takes possession of the property.
Stamp duty: A state tax on conveyance or transfer of property calculated on the total value of the property.
Strata title: The most common title associated with townhouses and apartments. Individuals each own a portion of the title, known as a "lot" and share common property.
Studio: A flat consisting of one main room or open-plan living area incorporating cooking and sleeping facilities and a separate bathroom/shower room.
Valuation: A written analysis of the estimated value of the property prepared by a qualified valuer.
Vendor: The seller.
Zoning: Local authority guidelines for the permitted use of the land.
Story by Hannah Nicholas