Common Home Purchase Terms
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 Office of Fair Trading.
AMENITY: Denotes a characteristic or feature of a neighbourhood.
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 â€˜lotâ€™, â€˜building blockâ€™ or â€˜block of landâ€™.
APARTMENT: See â€˜Home Unitâ€™.
APPRECIATION: The increase in the value of property caused by economic factors, such as inflation, supply and demand etc.
AUCTION: A public sale in which a property (or an article) is sold to the highest bidder.
ARCHITRAVE: A moulding surrounding a door or window opening.
BEAM: A horizontal load bearing structural member.
BEARER: A sub-floor timber supporting the floor joists.
BOUNDARY: A line separating adjoining properties.
BREACH OF CONTRACT: Breaking the conditions of a contract.
BRICK VENEER CONSTRUCTION: In housing, a system in which a structural timber frame is tied to a single brick external wall.
BRIDGING FINANCE: Finance obtained over a short period as a prelude to long-term funding. Higher interest rates are usually 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 of construction.
CAVEAT: If a caveat is lodged upon a title to land, it indicates that a third person (the person who lodged the caveat) has some right or interest in the property.
CAVEAT EMPTOR: â€˜Let the buyer bewareâ€™. This principle of law puts onus onto the buyer to be satisfied with the item before buying.
CERTIFICATE OF TITLE: A document identifying the ownership of land; it shows who owns the land and whether there are any mortgages or other encumbrances on it etc. This document is usually held by the lender as security for a loan. Details can be obtained through a search of records at the Land and Property Information NSW.Â CHATTELS: Property other than real estate, movable ossessions which may be included in a sale (ie. furniture etc).
CLEAR TITLE: A seller has a clear title when there are no restrictions (such as an outstanding mortgage) preventing a sale, and title of the seller is established.
CLUSTER HOUSING: Detached group of houses which shares open space.
COMMISSION: The fee or payment made to a real estate agent for services rendered (eg. someone who engages an agent to sell their home pays the agent a commission).
COMMON PROPERTY: An area which is available for the use by more than one person (eg. home units have common areas such as stairs, driveways, storerooms etc).
COMMON LAW TITLE:Â Explained previously.
COMMUNITY TITLE:Â Â Â Â Community Title is a form of sub-division which allows common property areas to be incorporated into a land sub-division. On registration of a community style plan, an association will be established similar to an ownersâ€™ corporation under strata schemes legislation. People purchasing into such a scheme will receive a Torrens Title for the lot they own and membership of the association. They will also share ownership of the common facilities.
COMPANY TITLE:Â Â Â Â Company Title is where unit owners are actually shareholders in a private company. Buying a certain number of shares entitles the shareholder to exclusive possession of a particular unit, and perhaps space for a car. Shareholders vote to decide company rules governing occupation, such as rights to lease, sell or transfer shareholdings. You must have the companyâ€™s approval to alter in any way the occupancy of a Company Title unit. Because you do not actually gain a title to the property but shares in a company, lending bodies are more reluctant to lend for this sort of property.
COMPULSORY ACQUISITION: (resumption):
The power of a government authority to purchase property from an owner who does not wish to sell.
CONTRACT OF SALE: (referred to as the â€˜contractâ€™): A legal document which sets out the terms and conditions the seller and the buyer enter into when a sale is to take place â€“ the contract contains a description of the property.
CONVEYANCE: The transfer of ownership of property from the sellerâ€™s name to the buyerâ€™s name.
COOLING-OFF: The period of five business days allowed after exchange of contracts during which time the contract may be cancelled.
COVENANT: An agreement by one party to adhere to certain terms, conditions or restrictions regarding a property. A covenant is not usually valid unless noted on the title to the land. The nature of the covenant should always be established and the question asked: What effect will this covenant have upon the future plans for the property?
DEPOSIT: A deposit is normally paid by the buyer at the time of exchanging contracts; normally 10% of the total purchase price. Any amount paid earlier as an initial or part deposit will usually form part of the 10%.
DEPOSIT GUARANTEE BOND: A written guarantee from an insurance company to the seller for payment of all or part of the deposit.
DISBURSEMENTS: Miscellaneous fees and charges incurred during the conveyancing process, including search fees charges by government authorities.
DUTY: A state government tax on financial transactions. For the sale of real estate, it is calculated according to the sale value.
FITTINGS: Goods or articles that can be removed from a property without causing damage to it.
FIXTURES: Items, such as built-in cupboards, bath, toilet or stove, that cannot be removed from a property without causing damage.
FREE STANDING: A dwelling which stands independently of others.
HOME UNIT: A residential dwelling grouped with others, sharing common property and registered under Strata Title or Company Title.
INTEREST ONLY LOAN: See â€˜Mortgage (fixed)â€™
INVENTORY: A list of items included with a property, usually furniture, furnishings, movable items etc.
JOINT TENANTS: Joint tenancy is the holding of property by two or more persons in equal shares. If one person dies, his/her share passes to the survivor.
MORTGAGE: A legal document which expresses the terms and conditions applying to the lending of money secured over real estate.
MORTGAGE (fixed) or interest-only loan: The amount borrowed is not repaid until the end of the term of the loan. Repayments made are only payments of interest.
MORTGAGE (amortising or reducing): The principal and interest type loan which is the most common form of housing loan. The repayments through the term of the loan include both interest and principal.
MORTGAGEE: The person(s) who lends the money.
MORTGAGOR: The person(s) who borrow the money.
OLD SYSTEM TITLE:Â Explained previously.
OPTION TO BUY: A legal document giving a person the right to buy. In the document the price and period are specified. A fee is paid and if the person proceeds to buy the property the amount comes off the purchase price. When the person does not proceed to buy the property the fee is forfeited.
OWNERSâ€™ CORPORATION: All the owners collectively of a block of units. The executive committee, which is elected by the members, meets regularly to discuss various matters relating to the administration of the building (eg. upkeep of common property).
PRINCIPAL: The amount of money owed to a lending authority.
PRIVATE SALE: The seller does not engage an estate agent but acts for himself or herself. The seller deals directly with the buyer.
PRIVATE TREATY SALE: Sale of property through an estate agent by private negotiation and contract.
REAL PROPERTY: Land with or without improvements thereon.
RESERVE PRICE: The minimum a seller has specified he/she will accept at auction.
RIGHT OF WAY: A right which gives a person access across certain land.
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 owners and the other precise details of the property, such as the existence of any restrictive covenant, mortgage or caveat on the title.
SEMI-DETACHED: Two houses joined together with a common wall or walls; usually registered under Torrens Title.
STRATA TITLE:Â Â Explained previously
TENANTS IN COMMON: This is the holding of property by two or more persons in equal or unequal shares. If one person dies, his/her share passes to the person named in his/her will.
TERRACE: One row of houses joined together with common walls, usually registered under Torrens Title.
TORRENS TITLE:Â Â Â Explained previously.
TOWNHOUSE: Two-storey attached dwellings registered under Strata Title.
TRANSFER: A document registered in the Land and Property Information NSW acknowledging the change of ownership of a property, to be noted on the Certificate of Title.
UNENCUMBERED: Describes a property free of mortgages, covenants, restrictions etc.
VENDOR: A person who offers a property for sale.
VILLA: Single-storey attached dwelling registered under Strata Title.
ZONING: Statutory description of the allowable uses of land as set out by local councils or planning authorities.