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Know your Real Estate Terms

So you're ready to buy? or ready to sell?

Are you finding the real estate jargon too technical and confusing? Here are some definitions for you that may help:

Contract: The written agreement for the sale and purchase of property, between the buyer and seller.

Caveat: A warning notice registered against a property title that a third party may have rights or an interest in the property.

Chattels: These are removable items on a property. Chattels for sale with the property should be detailed on the sale and purchase agreement.

Conveyancing: The legal work associated with transferring ownership of the property. Usually conducted by a land broker or solicitor.

Covenant / Encumberance: A restriction or condition on a title over and above the council zoning regulations. For example, its terms may restrict the height or style of a proposed building.

CV: Capital Value. Often incorrectly referred to as "Council Valuation" it is set by the valuer general.

Deposit: A portion of the purchase price paid into the agents trust account prior to the settlement of a sale.

Easement: A right to use another's property such as for vehicle access (a right of way), or drainage (a right to drain water or sewerage). An easement can be held by a neighbour or authority such as a local council, and is registered on the titles of the properties affected.

Equity: The amount of value an owner has in a property. This means the resale value minus any mortgage owed.

Letter of Offer: A written indication from the buyer that they want to form a formal contract with the vendor to purchase the property. It may be conditional (with conditions attached) or unconditional.

Possession: When a buyer gets access to and takes over the property. This usually but not always happens on the same day as settlement.

POA: If you see this term in real estate advertisements it means the price is on application. It means you must ask for the price.

Purchaser: The person, people, company or trust buying a property.

Searches: This is a report obtained from the local council, and state government containing information that they have on file concerning property, including valuation dates, rates, development, consents, encumbrances and zoning.

Settlement: When the property is paid for in full in return for the transfer of ownership to the purchaser. This is done on the settlement date, which is agreed between buyer and seller at The Lands Titles Office.

Sole Agency: When one real estate agency has exclusive rights to sell a property for a given period of time.

Stamp Duty: A state government tax, based on the sale price of a property, it is paid by the buyer when property ownership is transferred.

Subdivision: The division of land into sections with individual titles.

Torrens Title: A South Australian term used to describe an independent land holding not part of a community or STRATA complex.

Title Search: Officially records who is the legal owner of the property and whether there are any other claims on it.

Unit Title (Community / STRATA Title): A form of tenure which gives ownership of an apartment, townhouse, unit, community and Strata title while making provisions for shared ownership and administration of common areas.

Vendor: The person, people or company selling the property

Zoning: Local council rules and regulations which determine land use.