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Learn the real estate jargon

6 NOVEMBER 2019

Learn the real estate jargon

Jargon is a language to demonstrate you belong and you know what you’re talking about. Many agents may throw around words that you don't understand. It's important to understand everything that has been said during your selling process.

These are the most common words used in our world:

Agency agreement.

The formal agreement between the vendor and the agent that sets out the specifics of the sale along with the associated costs.

Auction.

A sale usually in public, by an auctioneer, in which property is sold to the highest bidder.

Contract for sale.

An agreement relating to the sale of the property, which expresses the terms and conditions of sale.

Cooling of period.

A short statutory period (usually 5 days) after the contract is exchanged, during which the purchaser may cancel the contract. Usually does not apply in the case of auctions

Easement

The right of another person or organisation to use the land belonging to someone else. Mains, drains and water pipes are usually covered by an easement.

Exchange of contracts

A formal legal process that creates a binding contract for the sale of real property on agreed terms. This involves both parties signing the contract, the agreed deposit paid and the contracts dated. The parties are then bound to proceed to settlement, subject to any cooling-off period that may apply.

A deposit is usually also paid by the purchaser to the vendor during the exchange process. Any party that unilaterally declines to proceed to settlement may forfeit deposit monies or be subject to a damages claim.

Exclusions.

An item that is recorded on the contract for sale that is not included with the sale, i.e. a dishwasher.

Gazumping.

If a vendor agrees to sell a property to one person at an agreed price, then sells it to someone else (usually for a higher price). Unless contracts have been exchanged, agents are obligated by law to present all offers to the owner.

Inclusions.

Items found within the property that are included in the sale, ie blinds, rangehood or T.V. antenna.

Pest report.

A report that the purchaser can buy to determine if the property has any pest problems. e.g. termites.

Private treaty sale.

The sale of a property via an agent through the process of negotiation between the parties (usually through an agent).

Reserve.

The lowest acceptable price fixed by the vendor prior to an auction.

Settlement.

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

Stamp duty.

A state-based tax, paid by the purchaser based on the sale price once a property is sold. This is not paid on the sale of a property.

Strata report.

A report that a purchaser can buy to examine the history of a property under a Strata title.

Strata title.

Most commonly used for flats and units, this title gives you ownership of a small piece of a larger property including ‘air space’. You have sole right to a particular unit and can lease, sell or legally dispose of your unit as you desire. You also have an undivided share of the common land. You also become a member of the Body Corporate which controls maintenance.

Torrens title.

System of recording ownership of property, also known as Certificate of Title. Most common and simplest form of title to the property.

Vendor.

The person(s) or entity selling the property.

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