AN AGENCY AGREEMENT An agency agreement is the contract between the seller and real estate agent. It outlines details such as the agent’s fee (commission), the length of time the agreement will last (typically three months), the estimated selling price and any marketing arrangements. There are two main types: •Exclusive Agency Agreement – your property is listed for sale with just one agent exclusively •Open Agency Agreement - your property can be listed for sale by more than one agent at once A CONTRACT OF SALE A legal document prepared in advance by the Seller (Vendor), usually prepared by their solicitor or conveyancer outlining the details of the sale of property. The contract of sale is legally binding when signed by both parties, Vendor and Purchaser. The contract of sale sets out the terms and conditions agreed between a vendor and purchaser, which include: •Agreed sale price of the property •Deposit to be paid •Settlement terms and date •A list of inclusions being sold with the property •Any special conditions required prior to the sale of the property •A cooling off period (if applicable) Once duly signed between Vendor and Purchaser, legal representatives for both parties prepare for the property transaction to be finalised. THE DIFFERENCE BETWEEN AN AGENCY AGREEMENT AND A CONTRACT OF SALE An agency agreement is the contract between the seller and real estate agent. It outlines details such as the agent’s fee (commission), the length of time the agreement will last (typically three months), the estimated selling price and any marketing arrangements. There are two main types: •Exclusive Agency Agreement – your property is listed for sale with just one agent exclusively •Open Agency Agreement - your property can be listed for sale by more than one agent at once A Contract of Sale is the agreement entered between the person selling a property and the buyer of the property. It covers things like what is included in the sale, the title, whether there is a mortgage over the property, important legal details, and the length of time between paying the deposit and the settlement (when the balance must be paid, the keys are handed over, and you can move in). A DEPOSIT BOND •A ‘Deposit Bond’ acts as a substitute for cash and you can use the bond when exchanging contracts, including at auctions. •For a small fee (several hundred dollars normally), you and your lender agree a maximum amount that you can use as a deposit to buy and you don’t need to use your cash. The Deposit Bond works like a guarantee. It’s your lender’s way of saying ‘we’ll pay this deposit at settlement, instead of now’ •It gives you the freedom to concentrate on finding the right property - and keeps your deposit savings earning interest, right up until the day of settlement. •Your Lender can arrange this as part of your pre-approval. STAMP DUTY •Stamp Duty is a tax levied by states on various types of transactions such as transfers and agreements for the sale of real estate. •The amount of stamp duty you pay is based on the price of the property you buy. The amount varies from state to state. Visit the revenue office website of your state for further information: Victoria www.sro.vic.gov.au NSW www.osr.nsw.gov.au ACT www.revenue.act.gov.au Tasmania www.treasury.tas.gov.au South Australia www.revenuesa.sa.gov.au Western Australia www.dtf.wa.gov.au Queensland www.osr.qld.gov.au Northern Territory www.nt.gov OWNERS CORPORATION OR BODY CORPORATE A ‘Body Corporate’ is a legal identity that manages the affairs of an apartment building if it is Strata Title or ‘Community Title’. The term ‘Body Corporate’ has been replaced by the more modern term - ‘Owners Corporation’. ‘Company Title’ buildings have a similar legal identity known as a ‘Board of Directors’. •The Body Corporate looks after the management and administrative services the property/properties require •A Body Corporate decides what, if any, levies are payable in order to share the costs of maintaining a building A GUARANTOR A Guarantor helps you secure a loan by mortgaging their property security for your home loan. CONVEYANCING Conveyancing is the protocol by which legal title (or ownership) of a property is transferred from one party to another. This is usually done with a solicitor or with a conveyancer. AN EASEMENT An easement allows another party to access, cross or use your land for a specified purpose. Some properties have easements such as: •Drainage easements – for sewerage, stormwater etc. •Electricity easements – for underground or overhead power lines •If you want to put in a pool and find an easement across that particular area, you will be prevented from putting the pool in. LAND TAX Land tax is an annual tax payable by owners of land. Land tax is administered by your state or territory government and is applicable everywhere except in the Northern Territory. It does not apply to your principal place of residence but does apply to every investment property you own.
What Do Real Estate Terms Mean?
Wednesday 24 Apr 2019