Glossary of Terms

This glossary of terms will help explain some of the terminology used in Real Estate in Australia.

Acceptance
Agreement with the terms and conditions of an offer or contract.

Adjustments
Apportionment of paid or unpaid rates and other charges between the vendor and purchaser at settlement. See also Statement of Adjustments below.

Agent
A Company or person who is authorised to act on behalf of the client in the sale, purchase, letting or management of real property.

Asking Price
The Asking Price is the figure at which a vendor may sell the property in accordance with the selling Authority.

Auction
A public sale where the property may be sold to the highest bidder - usually on the proviso the reserve price for the property has been met or exceeded.

Bid
To offer a particular amount of money at an auction

Body Corporate
The owners of the units/apartments within a building form a Body Corporate. These owners select a Committee which is responsible for the maintenance and insurance of the building (which includes all common areas). See also Owners Corporation.

Bond
Upon signing a Tenancy Agreement a bond needs to be paid by the Tenant to the RTBA - Residential Tenancies Bond Authority (usually equivalent to 4 weeks rent). Please check with the Managing Agent to confirm the amount. A bond is held as security by the RTBA against damage or default by the tenant.

Buyer
A person or entity who buys property using money or its equivalent.

Capital Gain
The monetary gain that you obtain when an asset is sold for a higher price than originally paid for it.

Cashflow GuaranteeTM
Guarantees that the landlord, will receive a rental payment on the due date, irrespective of whether Woodards has received payment from your tenant. This allows our landlords to plan and organise all financial undertakings in the knowledge that you will receive your rent on time, every time.

Caveat
A notification registered against a Title to a piece of land at the Land Titles Office advising that the person lodging the caveat claims some right to or interest in the land.

Certificate of Title
A document, which shows Ownership details of land and details of any mortgages and encumbrances.

Chattels
Any property not permanently attached to the land or house so as to become part of the land or house.

Common Property
An area of land and/or building which is owned by the Body Corporate (ie driveways/stairways and open areas).

Company Title
“Owners” of units are shareholders in a private company which owns the apartment building. The approval of the majority of shareholders is theoretically necessary if you wish to lease its property or sell your shares.

Condition Report
A statement prepared at the beginning of a tenancy describing the condition of the premises.

Contract of Sale
A written agreement which contains the terms and conditions of sale of a property. A signed Contract of Sale is a legally binding document if the Vendor's Statement has also been signed.

Conveyance
The legal process involved in transferring the ownership of a property.

Deadline Private Sale
Requires interested buyers to submit offers in writing prior to or on a set date. It differs from Private Sale in that there is a “fixed date” by which the sale must be completed - but is a method without the competitive bids and pressure of auctions.

Deposit
A sum of money given as part payment or security. A deposit is required when purchasing a property (at the time you sign the Contract of Sale) - usually 10% of the sale price.

Easement
An easement is a right that allows one person's land to dominate another person's land by exercising some right over the dominated or subservient land such as a drainage easement or a right of way.

Encumbrances
A claim that one person has against another person's land. An encumbrance is against the land and NOT the owner of the land. This means that if the land changes hands, the new owner may acquire both the land AND encumbrances attached to it.

Estimate of Selling Price
The Estimate of Selling Price in accordance with Section 47(A) of the Estate Agents Act 1980 is "the amount that the agent (or Agents Representative employed by the Agent) believes, on the basis of his or her experience, skills and knowledge, that a willing, but not anxious buyer would pay for the real estate". The Estimate of Selling Price is an estimate only and is not a valuation.

Fittings
Any item which is not permanently attached to a building or land.

Fixtures
Items affixed to structures or land, usually in such a manner that they cannot be easily moved without damage to themselves or the property.

Form 3 Body Corporate Certificate
A statement provided by a body corporate to any person who requires it. It contains specified information about the body corporate, including financial information.

Holding Deposit
A deposit paid to the vendor - based on the goodwill of the buyer to go ahead with the purchase of a property. It may or may not be refundable according to the Vendor's / buyers prior agreement.

Landlord
The owner of a property who leases that property to another person (or legal entity).

Land Tax
An annual tax paid to the State Government, on commercial and investment properties calculated according to the site value of the property.

Lease
A document which grants a person/s tenancy of a property for a specific period and subject to particular terms and conditions.

Lessee
A person (or legal entity) who leases a property.

Lessor
The owner of a property who leases that property to another person (or legal entity).

Mortgage
A legal document containing an agreement between a borrower and a lender for which security (usually real estate) is given by the borrower.

Mortgagee
A person who has security over property to secure a loan.

Mortgagor
The person who borrows funds (money) which are secured on his property.

MultiPhase TM
Multiphase™ is Woodards' exclusive selling system designed to achieve optimum results throughout the property marketing process. It minimises risk, costs and anxiety. Using Multiphase, consumers can make informed decisions about the marketing strategies they want to ensure a successful selling programme.

No Price Quoted
From time to time, a vendor may specifically instruct us to market the property without reference to any quoting figure. On these occasions we would refer to our Estimate of Selling Price and/or provide comparable sales evidence for your reference.

Occupancy Permit
Certifies that a home can be lived in. It is a requirement of most local governments or councils that an Occupancy Certificate be issued prior to the purchaser of a home taking occupation.

Old System Title
In Victoria, Old Law land dates back to an original Crown grant. Old Law titles require considerable time-consuming research to establish a satisfactory chain of title, which consists of the deeds of conveyance from every prior owner. Torrens title has simplified the procedures needed to prove title to land. Old Law and Torrens systems are both in operation in Victoria, although the proportion of land under Old Law titles is rapidly declining.

Owners Corporation
The owners of the units/apartments within a building form an Owners Corporation. These owners select a Committee which is responsible for the maintenance and insurance of the building (which includes all common areas). Formerly known as a Body Corporate.

Passed in
A property will be passed in at Auction if fails to meet the Reserve Price.

Purchaser
A person or entity who buys property using money or its equivalent

Real Estate
Land, including all the property on that land that cannot be moved and any attached rights

Requisitions on Title
A list of questions which a purchaser or mortgagee or solicitor puts in writing to the vendor, or mortgagor for the purpose of ascertaining any defects in title and other general information about the title.

Reserve Price
The amount, which is set by the owner of the property prior to the Auction, that they are prepared to accept for the property. After a property meets the reserve price it will be sold to the highest bidder.

Sale by Tender
The Tender selling system offers a fixed date and an invitation to interested parties to submit bids. Buyers must then submit their best price in writing for consideration.

Section 27 Statement
A Statement provided by the Vendor to the Purchaser (after contracts have been signed) disclosing mortgages and/or caveats attached to the property and the amounts secured on the property.

Section 32 Vendors Statement
The Section 32 Vendors Statement is a legal document provided by the vendor of real estate to an intending purchaser. Its name derives from Section 32 of the Sale of Land Act, which requires a vendor to disclose all material information to a purchaser BEFORE a contract of sale is signed.

Settlement
The date on which the balance of the contract price is paid and ownership of the property transfers from the vendor to the purchaser.

Stamp Duty on Mortgage
No longer applicable in Victoria.

Stamp Duty on Transfer of Land
A State Government tax applicable to the sale price which is paid by the purchaser.

Statement of Adjustments
A document detailing how rates and other outgoings have been apportioned on the day of settlement. It shows the purchase price, the deposit paid, the amount of rates paid for the rating period and the proportion of those rates to be paid by the Purchaser for the period beyond the settlement date.

Strata Title
A system of ownership of space within a block of apartments or units which you can be leased or sold. Membership of the Body Corporate is automatic. The Body Corporate owns and insures the Common Property.

Stratum Title
Similar to a Strata Title but there is a Service Company rather than a Body Corporate that owns the Common Property. Owners have a Certificate of Title to their property plus shares in the Service Company. This form of ownership predates Strata Titles.

Tenant
A person (or legal entity) who leases a property.

Title Search
Process to check ownership of a property and encumbrances usually carried out during the Conveyancing process.

Torrens Title (Certificate of title)
A system of registering land ownership in which ownership occurs when the document that transfers the property is registered at the Land Titles Office.

Transfer of Title
The passing of property from one person to another, or a document that conveys property between persons

Vendor
The party (seller) who offers a property for sale.

Vendor Bid
At auction, a bid made by, or on behalf of, the vendor of the property being offered for sale.

Vendors Statement
See Section 32 Vendors Statement above

Yield
The income derived from a property. The yield is usually expressed as a percentage of the value or cost of the investment.

Zoning
The use permitted by Local Council.

 

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