|
Appraisal or evaluation. An agent’s estimate of the reasonable or likely selling price or rental of a property. A formal “valuation” is provided only by a licensed valuer.
Auction. Public sale at an appointed place and time, under the control of an auctioneer, who calls for increasing bids from those interested in buying the property. It is a very common method of sale in inner-Sydney. Some auctions are conducted at the property, others in designated rooms, where there are usually a number of properties put up for auction at the one event.
Bidders’ register. Anyone intending to bid at auction is now required by law to register before bidding. You’ll be required to provide your name, address and identification to the selling agent’s or auctioneer’s representative and will be given a bidder’s number, which must be shown to the auctioneer each time you make a bid.
Body Corporate. Now correctly known as the Owners Corporation. This is the body that runs a strata plan. All lot owners within the plan are members and entitled to nominate as and elect members to the Executive Committee that makes decisions about the management of the strata property.
Buyers agent. A real estate professional who acts specifically on behalf of property buyers rather than sellers. Buyers agents must be licensed by the NSW Office of Fair Trading. Exclusive buyers' agents are those who only ever represent buyers and therefore don't risk conflict of interest between their selling and buying clients.
Common property. The areas in strata or community title properties, that can be used by all owners and residents. These would typically be the foyer, stairs and lifts, hallways and grounds but there may also be features such as common laundry, pool or gym facilities, or rooftop area.
Community title. This title is most common in large apartment developments, where there are multiple buildings, each with an individual strata title, but with shared facilities such as grounds, roadways, basements, BBQs, gyms or pools. The community plan will levy each of its strata plans for a contribution to the upkeep of these areas, and the strata plans will in turn include those fees in its own levies to its owners.
Company title. An older system of title for apartment buildings, that has mostly been replaced by Strata title. When you buy into the building, you don’t own the apartment itself. You own shares in the company that owns the building, and those give you the right to exclusive use of the particular apartment. Company title is more restrictive than Strata as purchases and sales must be approved by the owners’ Committee. Some Company title properties will not allow apartments to be rented, so are not suitable for investors.
Contract of Sale. The formal agreement between the vendor and buyer of a property. The form generally used is the Contract for the sale of Land 2000 Edition. Special conditions are generally added (and many of those are now ‘standard’ themselves. The exchange of contracts commits the parties to the transaction. Settlement completes the transaction. Always get the advice of a solicitor or licensed conveyancer before signing a Contract of Sale.
Conveyancer. A person licensed to represent buyers and sellers on the legal aspects and process of a property transaction. They operate specifically in this aspect of the law and will not advise other legal matters.
Cooling-off period. The standard is for 5 business days from date of signing the contract, in which time a property buyer (but not the seller) may withdraw from the purchase. Often in inner-Sydney, contracts are exchanged with the buyer waiving the cooling-off period. This can put buyers in a much stronger position in negotiating the deal, but requires that all due diligence is carried out before contracts are exchanged. The waiver can only be arranged by your solicitor or licensed conveyancer completing a "Section 66W certificate".
Cosy. You can assume this property is small (probably tiny) or dark or has low ceilings. Or all of the above.
DA. A Development Application, which is the process of applying to the local Council for required approvals for the development of a property, from exterior and structural changes, to demolition and rebuild, and particular uses. Requirements and guidelines vary from Council to Council. When the DA is submitted to Council it is referred to as having been “lodged”. When Council gives authority to proceed with the proposed plans, the DA is “approved”. You can get information about DAs from the relevant Council.
Deceased estate. Yes, it’s exactly what it sounds like – a property being sold as part of the estate of someone who has died. But selling agents really use the description as a marketing tool to suggest it could be a real bargain and usually to tell you it hasn’t been renovated for a long time.
Deposit. The standard deposit on residential property transactions is 10% of the purchase price. The buyer must provide this (generally by cheque or electronic funds transfer) as part of the exchange of contracts. The deposit is generally held in trust by the selling agent. Sometimes vendors request the release of the deposit to them, but buyers should only consider agreeing to this with the advice of your solicitor or conveyancer. The amount of deposit may be varied by negotiation between the parties and is often done for high-value transactions.
Exchange. This is the point at which a vendor and a buyer provide each other with a signed copy of the contract, and at which they become bound to the transaction. A buyer’s offer or a vendor’s acceptance of an offer is not binding on either party until the contracts are exchanged. A deposit of 10% of the agreed purchase price for the property is usually required at the time of exchange.
Expired lease. This means that a the original period of a tenant’s lease has passed and no new lease has been signed. That would generally allow the tenant to continue on in the property, with a month’s notice to leave from either the tenant or landlord. Many tenancy agreements continue on in this way for an extended period.
Fixtures. Items that are built into or connected onto the property in such a way that they are considered part of the property. This would typically include such things as carpet, light fittings and built-in wardrobes.
First-home buyers’ special. Primarily any property for sale at or under $500,000. Can also suggest small, not very good, or suitable for a single or couple only. If it’s described as “Beginner’s luck”, it probably needs renovation too.
Gazumping. Although often frowned upon, this is perfectly legitimate. It is where a vendor accepts a (usually higher) offer from a second purchaser after agreeing to an offer from a previous buyer. Be aware that neither the vendor nor the buyer are obliged to complete the agreed transaction until contracts are exchanged.
Improvements. Any building on the land is considered an “improvement” on the land.
Investors’ special. Usually an apartment. Sometimes a semi. Generally at the lower end of the price range for similar properties in that area. May also suggest that the property has an existing tenant, with a lease, so that it is not available to other occupants for some time. Also used where the vendor (usually a developer) is offering a rental guarantee or vendor finance.
Inclusions. The items to be included in a property purchase. Some may seem obvious, but they should be specified in the Contract of Sale. There is provision for this on the front page of the standard contract for such items as: blinds; built-in wardrobes; curtains; dishwasher; fixed floor coverings; light fittings; range hood; stove. Clothes dryers are also usually an inclusion, though washing machines rarely are.
In-room auctions. Generally an auction that takes place in an agent's office, hotel room or other function venue. Usually there will be several properties auctioned at the one event, sometimes through different selling agencies.
Land Titles Office. Now LPI – Land and Property Information Office. Provides land, property and valuation information on behalf of the NSW Government.
Lease. A formal agreement for the exclusive possession and use of a property or facility (eg a boat mooring). Standard property leases in Sydney are generally for 6 or 12 months. Usually at the end of the formal lease period, the lease is left to run on a ‘month-to-month’ basis.
Levies. Strata fees. The fees that owners in a strata plan must pay to the Owners Corporation for the management and upkeep of the building and common property. Levies are generally payable quarterly and are allocated into the Admin and Sinking funds. Strata levies vary considerably from one building to another, and generally reflect the buildings facilities and condition. For example, items that contribute to costs include lifts, gyms and pools. Concierges are very expensive. High levies may also point to major problems with building maintenance. Levies are most commonly in the range of $400 to $800 per quarter, but can be lower and much, much higher. Special levies are sometimes required by the Owners Corporation to cover extraordinary expenses, such as major building works, particularly when there isn’t enough money in the Funds to pay for those.
Live in now and renovate later. It really ought to be renovated now but by the time you’ve paid for the property, you won’t have the money left to renovated!
Market value. Simply, the price that a reasonable buyer might pay and a reasonable vendor might accept, at the time. People often come to us after they’ve been to property seminars, saying they only want to buy “at least 10% below market value”, but in practice this is meaningless.
Neat. Usually used to describe kitchens and bathrooms and almost certainly means the room, appliances and fittings are old, very dated and really should be replaced. Probably also small.
On-site auction. An auction that happens at the property being sold, the theory being that potential buyers who are in the property they want to buy will be more likely to push their budget and bid further. It also helps to draw a large, local crowd of onlookers, which adds to the spectacle and helps promote the selling agent.
Open for inspection. The times at which a property is open for the public to visit, without needing a prior appointment. You can just turn up and go through the property. In Sydney, most properties are open on a Saturday, for 45 minutes. (Rental properties may only be open for 15 or 20 minutes.) Some may also be open during the week – generally Wednesday or Thursday or early in the evening. Some properties will not be open at all and will be “inspection by appointment only”. You will be required by the selling agent to provide your name and contact phone number, for security purposes. Agents may also phone you after your visit to see what you thought of the property and whether you might be interested in buying it.
Original. Means original condition. This property is one strictly for the keen renovator.
Owners Corporation. This is the body that runs a strata plan. All lot owners within the plan are members and entitled to nominate as and elect members to the Executive Committee that makes decisions about the management of the strata property.
Passed-in. Where a property goes to auction but fails to get a bid high enough to meet the vendor's reserve price. The agent will then attempt to negotiate with the bidders or the property may be put on the market with a designated asking price (that is, for sale by private treaty).
Potential. Means this property needs a lot of work. At the very least be prepared to replace the kitchen and bathrooms, and paint throughout. Probably means there’s a lot more than that to do. “Enormous potential”, “huge potential” and “potential plus” indicate greater levels of work required.
Private treaty sale. Where a property is offered for sale by negotiation (rather than by auction). Usually the property will be advertised with an asking price but is increasingly common to see properties advertised for sale by "expressions of interest". Not to be confused with "private sale", which is a sale managed directly by the vendor, without a selling agent.
REI (Real Estate Institute). The peak representative body for the real estate industry. Agents are not legally obliged to be members. The REI NSW provides training, professional development and recognition (through annual Awards) for agents.
Renovator’s delight. Probably even more work to do than “enormous potential” (above). Might even be better to knock it down and start again.
Reserve price. The price set in advance by the vendor of a property being sold at auction, as the price below which he will not sell the property. The reserve is generally provided in writing to the agent and auctioneer shortly before the auction and the auctioneer cannot sell the property for any bid less than that amount without the express permission of the vendor. Agents will often encourage vendors to reduce the reserve during the course of the auction, in the hopes of reinvigorating slowing bidding.
Semi. Semi-detached house. A house that is attached to another on one side only. Most likely to be an older-style house (often early to mid-1900s).
Settlement. Settlement period. The point at which the transaction for a property purchase is completed and the new owner takes possession of the property. The standard period between exchange and settlement is 6 weeks, though settlement periods can be negotiated for both shorter and much longer timeframes.
Special conditions. Conditions added to the standard Contract of Sale. Many of these are so common now as to be ‘standard special conditions’.
Strata title. Most apartment buildings in Sydney are strata title, which simply refers to the subdivision of the land and buildings into individual lots, that are owned and can be traded independently. When you buy a strata title apartment, you own the space defined by the walls, ceilings and floors.
Torrens title. The system of title that applies to most houses in Sydney, even where they are attached to another house, where there is no common property shared by the dwellings.
Water glimpses. Yes, there’s water out there. But probably just a slither between the buildings in front, or if you lean as far as you can out the window.
.
Have you come across a real estate term you're not familiar with or seen an expression used in advertising that deserves a place on this page?
Email your question or comment to us at Finders Keepers. We'll add it here.
|
