General Words Used

Agent

A person authorised to act on behalf of another person on the sale, purchase, letting or management of a property.

A real estate agent must be licensed by the relevant authority in their state.

Acceptance management of a property. A real estate agent must be licensed by the relevant authority in their state.

Auction

A public sale in which a property (or article) is sold to the highest bidder

Body Corporate

All of the owners collectively own the common property. 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)

Bridging Finance

Finance obtained over a short period, as a prelude to long-term funding. Higher interest rates may be charged for this form of 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 on construction.

Caveat

“Beware” - if a caveat is lodged on a title to land, it warns a person buying the property that a third party has some right or interest in the property.

Chattels

Property other than real estate. Moveable possessions which may be included in a sale, such as furniture and contents.

Clear Title

A vendor has a clear title when there are no restrictions (such as an outstanding mortgage) preventing a sale, and title of the vendor to the property is established.

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).

Compulsory Acquisition (resumption)

The power of a government authority to purchase property from an owner who does not wish 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

The transfer of ownership of property from the vendor’s name to the buyer’s name.

Covenant

An agreement noted in the title requiring the 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.

Deed

A document recording an agreement, obligation or conveyance of property.

Deposit

A deposit is normally paid by the buyer at the time of exchanging contracts - normally 10% of the total purchase price.

Gazumping

Gazumping may take two forms:

1. The intending buyer believes that the property has been secured by payment of a goodwill 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.

2. The vendor or real estate agent accepts two or more deposits and the intending purchasers are then left to outbid each other as if it were an auction.

Interest Only Loans

The amount borrowed is not repaid until the end of the term of the loan. Repayments consist of interest, fees and charges. No principal is repaid during the loan

Inventory

A list of items included with a property, usually furniture, furnishings, moveable items.

Investment

The purchase of an asset (such as real estate) in order to produce capital gain on resale.

Land Tax

A state government tax payable by owners of property (not their principal residence), based on the value of the property.

Lenders Mortgage Insurance

This covers the lender’s risk if you default on your home loan and they then have to sell your property for less than you owe on your loan.

Mortgage

A legal document, which expresses the terms and conditions applying to the lending of money and gives the lender certain rights over property, including real estate.

Mortgagee

One who lends money and takes the mortgage.

Mortgagor

One who borrows the money and gives the mortgage.

Option to Buy

A legal document giving a person a right to buy. In the document the price and period are specified. 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 refunded.

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 him or herself and so avoids paying agent’s commission. The seller deals directly with the buyer.

Property Management

The management of a property on behalf of the owner

Rates

The amount charged by the local council or water authority for the area in which the property is located.

Reserve Price

This is the minimum price a vendor has specified that he or she will accept at the 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, such as the existence of any restrictive covenant, encumbrance or caveat on the title.

Stamp Duty

A State Government tax. It is usually applied to documents, including a contract for sale and a mortgage. It is calculated according to the sale value for a contract of sale or the amount secured by a mortgage.

Survey

Shows dimensions and boundaries of land and location of buildings.

Transfer

A document registered at the Land Titles Office recording the change of ownership of a property.

Unencumbered

Describes a property free of encumbrances (such as covenants, restrictions, mortgages and caveats).

Valuation

A written report by a registered valuer, showing his or her opinion of the value of the property.

Zoning

Description of the allowable uses of land, as set out by local councils or planning authorities. Acceptance of an offer constitutes an agreement or contract.