Anyone that has purchased a home or thought of purchasing one, will have come across a vast amount of Real Estate Jargon. Words like Under Contract, Bridging Finance, Chattels, Conveyancing, Freehold and so many more. So what does all this mean and how important is it to be educated in these terms before taking on the task of purchasing a property? It’s important to have some knowledge of the terms and conditions you will have to full fill when embarking on a first home buying journey. Whether is be a straight forward sale of a more complicated one, it’s essential to know exactly what is expected of you, your agent and the seller. Here’s a list of some of the more commonly used terms to get you started.
Appraised value: The estimated value of a property being used as security for a loan.
Auction: A public sale where a property is sold to the highest bidder.
Breach of contract: Breaking the conditions of a contract.
Building inspection: An inspection generally carried out prior to the purchase of a property to ensure the building is structurally sound. Contracts of sale can be made subject to the satisfactory building inspection.
Caveat: A caveat lodged upon a land or property title indicates that a party, that is not the owner, claims some right over or interest in the property.
Chattels: Chattels are items of personal property, such as clothing, appliances and furniture. In real estate terms chattels are usually movable items which may be included in the sale, such as furniture.
Commission: Remuneration of a real estate agent for service rendered, eg. to effect the sale of property. The amount being a prescribed percentage based n the consideration of the contract or agreement.
Contract of Sale: A written agreement outlining the terms and conditions for the purchase or sale of a property.
Conveyancing: The legal process for the transfer of ownership of real estate.
Deposit: An amount paid by the buyer at the time of exchanging the contract for sale. It acts as a commitment to buy. Normally a minimum of 5-20% of the total purchase price is required.
First Home Owners Grant: A grant from the Federal and State Governments. It was introduced as compensation for the increased cost of housing after implementation of the Goods and Services Tax (GST) on 1 July 2000. It’s only for buyers that have not previously bought property in Australia.
Passed in: A property is ‘passed in’ at auction if the highest bid fails to meet the reserve price set by the seller.
Settlement: There are generally two types of settlement that happen with most property purchases:
- Settlement of the property is when the balance of the purchase price is paid to the seller. The buyer receives the keys and becomes the legal owner of the property.
- Settlement of a loan coincides with settlement of the property. It’s when the lender transfers the borrowed funds to the seller or the seller’s mortgage holder.
Stamp duty: A State Government tax based on the purchase price of the property. It’s also payable on mortgages in some states. Each state and territory has different rules and calculations. To estimate the amount of stamp duty you may have to pay, use our stamp duty calculator.
Title deed: Document disclosing the legal description and ownership of a property.
Under Contract
A status of a property for sale when a contract has been submitted and agreed upon by seller and buyer.
Under Offer
The status of a property for sale, when a seller has accepted an offer from a purchaser but prior to exchange of contracts.
Vendor
The legal name for a person selling a property.
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