Definitions for Common Home Purchase Terms

Definitions

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.

Business means the business of an agent.

Denotes a characteristic or feature of a neighbourhood.

When a larger area of land is sub- divided into smaller pieces, these smaller parcels of land are known as allotments. Also referred to as ‘lot’, ‘building block’ or ‘block of land’.

See ‘Home Unit’.

The increase in the value of property caused by economic factors, such as inflation, supply and demand etc.

A public sale in which a property (or an article) is sold to the highest bidder.

A moulding surrounding a door or window opening.

A horizontal load bearing structural member

A sub-floor timber supporting the floor joists.

A line separating adjoining properties.

Breaking the conditions of a contract.

In housing, a system in which a structural timber frame is tied to a single brick external wall.

Finance obtained over a short period as a prelude to long-term funding. Higher interest rates are usually charged for this form of finance.

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.

means a person whose agency business either alone or as part of or in connection with any other business, is to act as agent for consideration in money or money’s worth, as commission, reward, or remuneration, in respect of a business transaction.

Means a person who on behalf of an agent negotiates a business transaction.

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.

‘Let the buyer beware’. This principle of law puts onus onto the buyer to be satisfied with the item before buying.

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 Registry.

Property other than real estate, movable possessions which may be included in a sale (ie. furniture etc).

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.

Detached group of houses which shares open space.

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).

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).

Types of property titles.

Types of property titles

The power of a government authority to purchase property from an owner who does not wish to sell.

A legal document which sets out the terms and conditions the seller and the buyer enter into when a sale is to take place – the contract contains a description of the property.

The transfer of ownership of property from the seller’s name to the buyer’s name.

There is no cooling off period for real estate contracts made in Western Australia unless the parties agree to have one inserted into the contract

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?

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%.

A written guarantee from an insurance company to the seller for payment of all or part of the deposit.

Miscellaneous fees and charges incurred during the conveyancing process, including search fees charges by government authorities.

A state government tax on financial transactions. For the sale of real estate, it is calculated according to the sale value.

Goods or articles that can be removed from a property without causing damage to it.

Items, such as built-in cupboards

A dwelling which stands independently of others.

A residential dwelling grouped with others, sharing common property and registered under Strata Title or Company Title.

See ‘Mortgage (fixed)’

A list of items included with a property, usually furniture, furnishings, movable items etc.

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.

An agreement that represents the right of a real estate agent or Broker to handle the sale of real property and to receive a fee or commission for services. A general or open listing is a right to sell that may be given to more than one agent or broker simultaneously.

A legal document which expresses the terms and conditions applying to the lending of money secured over real estate.

The amount borrowed is not repaid until the end of the term of the loan. Repayments made are only payments of interest.

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.

The person(s) who lends the money.

The person(s) who borrow the money.

Properties that are not ‘on the market‘, that is the property owner(s) have not expressed an interest in selling the property. Agents and buyers often approach off market property owner(s) to determine their interest in selling.

NOT Types of property titles.

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.

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).

Properties sold before being listed by an agent and being advertised on a Real Estate Portal site, these properties have less visibility but are known to agents that work in a particular area. 

Purple title in western Australia refers to ownership of an undivided share in a property. The term similarly refers to the colour of the sketch on the title, which used to be shaded purple. Although not a common form of title, some retirement villages or multi storey flats (for example) offer residents an undivided share in the complex.

The seller does not engage an estate agent but acts for himself or herself. The seller deals directly with the buyer.

Sale of property through an estate agent by private negotiation and contract.

Means a person whose business either alone or as part of or in connection with any other agency business, is to act as agent for consideration in money or money’s worth, as commission, reward or remuneration, in respect of a real estate transaction.

Means a person who on behalf of an agent or a developer negotiates a real estate transaction. Commonly called a ‘Rep’

Land with or without improvements thereon.

The minimum a seller has specified he/she will accept at auction.

A right which gives a person access across certain land.

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.

Two houses joined with a common wall or walls; usually registered under Torrens Title.

Types of property titles

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.

One row of houses joined with common walls, usually registered under Torrens Title.

Types of property titles

Two-storey attached dwellings registered under Strata Title.

A document registered in the Land Registry acknowledging the change of ownership of a property, to be noted on the Certificate of Title.

Describes a property free of mortgages, covenants, restrictions etc.

A person who offers a property for sale.

Single storey attached dwelling registered under Strata Title.

Statutory description of the allowable uses of land as set out by local councils or planning authorities.