As leading Sydney buyer's agents, we have assembled this useful glossary of property terms for anyone considering buying a home or investment property.
Agent: The traditional real estate agent is a selling agent appointed by the Vendor to achieve the best possible selling price for the property. If you are a Purchaser, consider using a buyer's agent who will help you find and purchase the most suitable property at the best price. Both selling agents and buyer's agents are subject to the Property Stock and Business Agents Act 2002 and the Property Stock and Business Agents Regulation 2003.
Body Corporate: Now known as the Owners Corporation.
Breach of Contract: Where either party fails to comply with their obligations under the Contract for Sale. The Purchaser is required to purchase the property in accordance with the timeframes specified in the Contract. Failure to do so may result in the Vendor being entitled to keep the 10% deposit, sell the property to a third party and sue the Purchaser. The Vendor could be entitled to recover any difference in the sale price if the property is resold within a 12 month period, plus any other expenses for additional agents or legal fees.
Building and Pest Inspection: Before purchasing a property, you should obtain a building and pest inspection report from a qualified building and pest inspector. The report will tell you whether there are any problems with the property. If there are problems, this may affect your decision to purchase the property and the price you are willing to pay for it. It is very important to understand what the report is actually telling you. Discuss it in detail with your building and pest inspector.
By-laws: If the property is strata titled, it will be subject to strata by-laws. These are rules implemented by the Owners Corporation in respect of the property and the Common Property. For example, if you wish to keep a pet, you will need to check whether the By-Laws allow it.
Caveat: This is a form of statutory injunction outlining a third party's interest in a property. It is effectively a written warning to anyone checking the Certificate of Title that the Caveat exists and must be removed or otherwise be dealt with before the Title may be transferred.
Certificate of Title: A certificate showing proof of ownership of real property - the "deeds". This includes a record of all the current legal information relating to a property and forms an important part of the Contract for Sale. If you purchase the property with a mortgage, the bank will also be listed on the Certificate of Title as registered mortgagee. The bank will hold the original Certificate of title until you pay off the mortgage, re-finance with another lender or sell the property.
Common Property: Strata property that is owned by the Owners Corporation and identified in the strata plan which is included in the Contract for Sale. It includes items such as driveways, common entrance areas and visitor parking.
Company Title: A type of Title where, unlike Strata Title, the unit or apartment owners are shareholders in a private company. The shares entitle the owners to exclusive possession of a particular unit and perhaps a car space or garage. The company's constitution sets out restrictions governing the use of the property by the owners/ shareholders and renting out the property to tenants.
Comparable Sales: The recent sales of similar properties which are used to provide an indication of the likely selling price or market value of a particular property.
Contract for Sale: An agreement for the sale of land in NSW must be in writing and contain certain legislative documents to be valid. It contains all the terms which the Vendor and Purchaser have agreed to and is legally enforceable as soon as it has been executed by both parties and exchanged.
Cooling off Period: Following an Exchange of Contracts, this is the period of 5 business days during which the Purchaser may Rescind the Contract for Sale. If a Purchaser rescinds the Contract, before 5pm on the fifth business day following exchange, the Purchaser will forfeit 0.25% of the Purchase Price. Only the Purchaser can rescind the Contract during the Cooling off Period. The Vendor is bound by the Contract unless the Purchaser chooses to rescind.
Conveyancing: The process of transferring legal title or ownership of the property from the Vendor to the Purchaser. A conveyancer or a solicitor are usually engaged to carry out this process. Covenant: A burden or a benefit on a land owner and their successors in title to engage in or refrain from a specified action. If there is a covenant, it will be recorded on the Certificate of Title.
If you are looking for a new home or investment property in Sydney, call Buyers Domain property buyers agents today on 02 9568 6330