- Property Management
- Village Links
C&G’s Guide: Real Estate Terms You Should Know
When it comes to property transactions, there’s plenty of official language and industry ‘jargon’ to learn. It’s important to understand these key concepts, especially when making one of the most critical decisions of your life! To make things easier, C&G have summarised some must-know terms in our latest blog.
Buying property is a big decision, and the cooling-off period ensures you’re comfortable with your choice. Think of it as the returns policy in a retail store. In real estate transactions, a cooling-off period lasts 3 business days and incurs a termination fee of 0.20 per cent. These conditions also vary between states and do not apply to auction transactions.
Section 27 of the Sale of Land Act 1962, also known as Early Release of Deposit Authority, is a document that allows vendors to access their deposit early. When the buyer commits to a sale, the deposit is often held in a trust account by the real estate agent, lawyer or conveyancer. If the transaction conditions allow for it, the vendor can apply to receive the deposit before settlement. The reasons a vendor might request a Section 27 are various; from investing the money elsewhere to utilising as a deposit.
This may also be referred to as a vendor’s statement, and lists property information that potential buyers would not be privy to from inspection alone. It includes financial information such as mortgage contracts, covenants, easements and council restrictions. The Section 32 is a legal document that must be provided before a contract of sale is signed.
During an auction, the auctioneer may make bids on behalf of a vendor. This is often to ‘kick off’ an auction, or generate momentum if bidding has stalled. A vendor bid may also come into play if the existing bids are not meeting the seller’s asking price.
Also referred to as ‘sale and leaseback’ – this is when an owner sells their asset but remains a tenant. It’s a relatively niche transaction for investors to purchase display homes or suites, leasing the asset back to the original developer. The sale grants the developer extra cash flow, and they can continue using the display home to attract new buyers. The investor receives a steady income and a brand new asset when the lease concludes. Knowledge of this concept might just win you a trivia night in years to come!
Of course, there are plenty more terms that will inevitably show up when purchasing property. When they do, don’t hesitate to reach out to the expert team at Chisholm & Gamon. We live and breathe real estate, and would love to answer your questions!