Acceptance:
Usually, acceptance of an offer, according to the terms of the offer, creates
an enforceable agreement or contract.
Agent:
A person authorised to act on behalf of another person in the sale, purchase,
letting or management of property. A real estate agent must be licensed by the
relevant authority in their State.
Allotment:
When a larger area of land is subdivided into smaller pieces, these smaller
parcels of land are known as allotments. Also referred to as a "lot",
"building block" or "block of land".
Amenity:
Is a characteristic or feature of a neighborhood.
Appreciation:
The increase in the value of property caused by economic factors like inflation,
or an excess of demand over supply for that property type.
Auction:
A public sale in which property (or an article) is sold to the highest bidder.
Body Corporate:
All of the owners collectively of the common property in a block of units. The
council of the Body Corporate, which is elected by the members, meets regularly
to discuss various matters relating to the administration of the building (for
example, upkeep of common property).
Bond:
A sum of money paid by a tenant and held by the Rental Bond Board to protect
against losses from non-payment of rent and damage done to the rental property.
Boundary:
A line separating adjoining properties.
Breach of contract:
Breaking the conditions of a contract.
Bridging Finance:
Finance obtained over a short period, as a "bridge" to long-term funding.
Higher interest rates may be charged for bridging finance.
Building Regulations:
Rules of a legal or statutory nature by which local councils control the manner
and quality of the building. They are designed to ensure public safety, health
and minimum acceptable standards of construction.
Caveat:
"Beware" – if a caveat is lodged on a title to land, it warns
a person buying the property that a third party (party which lodged the caveat)
has some right or interest in the property.
Caveat Emptor:
"Let the Buyer Beware" - this principle of law requires the buyer
to be satisfied with the item they wish to buy before buying. The buyer purchases
the property "as is".
Certificate of Title:
A document identifying the ownership of land. It shows who owns it and whether
there are any mortgages or other encumbrances on it.
Chattels:
Property other than real estate. Moveable possessions which may be included
in a sale, for example. furniture.
Clear Title:
A vendor has a clear title when there are no interests (like an outstanding
mortgage) on the vendor’s title.
Cluster Housing:
Detached group of houses which share open space.
Commission:
A fee or payment made to a real estate agent for services successfully rendered
(for example, someone who hires an agent to sell his/her home pays the agent
a commission when the home is sold).
Common Area:
An area which is available for use by more than one person (for example, home
units have common areas like stairs, driveways, store rooms).
Common Law Title:
Usually referred to as "old system title", it consists of a series
of title documents called "a chain of title". A title is clear only
if every document in the chain is available and complete. Legal costs of acting
on a purchase of Old System Title land are higher than on a purchase of Torrens
Title land, because making a thorough investigation of the chain of title can
be complicated and time consuming. Old System Title may be converted to Torrens
Title, and is often automatically converted to Torrens Title following a sale.
Compulsory Acquisition (resumption):
The power of a government authority to purchase property from an owner without
the owner agreeing to sell.
Contract of Sale:
A document which sets out the terms and conditions of sale between the vendor
and the purchaser (referred to as "Contract").
Conveyance:
Conveyancing is the process of transferring the ownership of a property between
the seller and buyer. This is usually completed by a solicitor or a conveyancer,
although it is possible to purchase do-it-yourself conveyancing kits.
Covenant:
An agreement noted on the title to property requiring the property owner to
adhere to certain terms, conditions or restrictions regarding a property. The
nature of any covenant over a property should always be established before you
enter into a contract to purchase the property.
Cover Note:
A document issued by an insurance company to temporarily insure a property until
a formal policy is issued.
Deed:
A formal document including special signing requirements recording an agreement,
obligation or conveyance of property.
Deposit:
A deposit is normally paid by the buyer at the time of exchanging contracts.
It is normally between 5-10% of the total purchase price.
Dual Occupancy:
A block of land or existing dwelling which is zoned in a way which allows the
owner to erect a building which has two distinct living arrangements (for example,
a duplex or a house with a granny flat attached).
Duplex:
A two-storey block of apartments with one apartment covering each floor.
Fittings:
Goods or articles that can be removed from a property without causing damage
to it.
Fixtures:
Items like built-in cupboards, bath, toilets and stove that are intended to
form part of a property and that usually cannot be removed from a property without
causing damage to it.
Free Standing:
A dwelling which stands independently of others.
Gazumping:
Gazumping may take two forms:
The intending buyer believes that the property has been secured by payment of a holding deposit, and proceeds to arrange finance, legal and other matters. When ready to exchange contracts, the intending buyer finds that another buyer (of which he was unaware) has exchanged contracts on the same property.
The vendor or real estate agent accepts two or more deposits and then before contracts are exchanged, tells the intending purchasers that the price has gone up. The intending buyers are then left to outbid each other as if it were an auction.
Home Unit:
A residential dwelling grouped with others, having shared common areas and owned
under Strata Title, Company Title or other group title system.
Interest:
Interest is payable on a loan at a rate specified by the loan contract.
It is usually calculated daily and charged monthly on the outstanding loan balance.
Interest only loans:
Repayments consist of interest, fees and charges only. The loan balance is not
reduced over time and the amount borrowed is not repaid until the end of the
term of the loan.
Inventory:
A list of items included with a property, usually furniture, furnishings and
movable items.
Investment:
The purchase of an asset (like real estate) in order to produce capital gain
on resale or to earn income or both.
Joint Tenants:
Joint tenancy is the holding of property by two or more persons in equal shares.
Land Tax:
A State government tax payable by owners of property based on the unimproved
capital value of the property.
Lease:
A lease is a document granting possession of a property for a given period without
conferring ownership. The lease document specifies the terms and conditions
of occupancy and rent payable.
Lender’s Mortgage Insurance (LMI):
This covers the lender’s risk if a borrower defaults on their home loan
and the lender has to sell the property securing the loan for less than what
is owed on the loan. LMI is payable in full at the start of a mortgage, and
is calculated based upon the loan value and the LVR.
Lessee:
A person who obtains possession of a property under a lease.
Lessor:
A person who owns a property and allows another to occupy it under a lease.
Loan-to-Value-Ratio (LVR):
The LVR is a ratio of the total amount of money borrowed versus the total
value of all securities (properties) held. This is very important in determining
how much you can borrow. In most cases, it is possible to borrow up to 95% of
the value of the property you are purchasing. LMI is usually payable on LVR's
of 80% or higher.
Mortgage:
A legal document which gives a lender an interest over a property to secure
the payment of money, or the performance of an obligation owed, to a lender.
Mortgagee:
Someone who lends money on the security of a mortgage.
Mortgagor:
Someone who borrows money on the security of a mortgage.
Old System Title:
See Common Law Title
Option to buy:
A legal document giving a person a right to buy. The price of the option and
the period in which it must be exercised are specified in the option. Usually,
a fee is paid and if the person proceeds to buy, the amount paid for the option
is deducted from the purchase price. Where the person does not proceed to buy
the property, the option fee is not refundable.
Principal and interest loan:
The principal and interest loan is the most common form of housing loan. The
repayments through the term of the loan include both interest and principal
and reduce the balance of the loan, so it is repaid in full over the term of
the loan.
Private Sale:
The seller (vendor) does not engage an estate agent, but acts for himself or
herself and so avoids paying agent’s commission. The seller deals directly
with the buyer.
Private Treaty Sale:
Sale of property through an estate agent, other than by auction.
Progress Payments:
When a lender pays instalments to a builder as the building is constructed,
normally in five payments.
Property Management:
The management of a property on behalf of the owner.
Rates:
The amount charged by the local council or water authority to provide services
to a property.
Real Property:
Land with or without improvements on it.
Reserve Price:
This is the minimum price a seller has specified that they will accept to sell
their property at auction.
Search (title):
The process of investigating or examining title to land, to ascertain if
the vendor has the right to transfer ownership. A title search reveals the names
of the owner and other precise details of the property, like the existence of
any restrictive covenant, encumbrance or caveat on the title.
Semi-detached:
Two houses joined together by a common wall.
Settlement:
When the sale of a property is legally finalised and funds exchanged.
Stamp Duty:
A State Government Tax. Stamp duty is payable for both purchase of property,
and mortgages. For contracts of sale it is calculated according to the sale
value on the contract. For mortgages, it is calculated on the amount secured
by a mortgage. Stamp duty is also applicable for Lenders Mortgage Insurance
(LMI).
Strata Title:
A system of title similar to a Torrens Title, but allows the owner of an individual
unit, in a block of units, to have separate title for that unit. Will usually
have a sink fund associated with the block to cover possible repairs and expenses.
Survey:
Shows dimensions and boundaries of land and location of buildings.
Tenancy:
The right to occupy land or buildings as provided by the terms of a lease or
other agreement.
Tenants in Common:
This is the holding of property by two or more persons in specific shares. If
one person dies, their share passes according to the terms of their will.
Terrace:
One of a row of houses joined together with common walls.
Torrens Title:
The name given to the government system of recording ownership of land. It’s
by far the most common land title in Australia and the cheapest title to buy
or sell. Once you are registered on the title you are taken to be the owner.
Town House:
Two-storey attached dwellings usually registered under Strata Title.
Transfer:
A document registered at the Land Title Office recording the change of ownership
of a property.
Unencumbered:
Usually describes a property free of mortgage interests.
Valuation:
A written opinion of a property’s value by a professional valuer. A valuation
is usually required on all properties to be used as securities. For new purchases,
the valuation will not be more than the purchase price of the property. Valuations
obtained by one lender, or by yourself for personal use, will not be suitable
for other lenders. The process of the valuation can be a slow one, as it is
often necessary for the valuer to view the interior of a property being valued.
Accessibility issues can delay the process.
Vendor:
A person who offers a property for sale.
Villa:
Single-storey dwelling usually registered under strata or community title.
Zoning:
Description of the allowable uses of land, as set out by local councils or planning
authorities.
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