Glossary of Terms Appraisal – Also known as a price estimate, this is prepared by a real estate agent and used as a guide to pricing a property for sale or for rent. Body corporate – Also known as an owner’s corporation, this is the group responsible for managing the common property (shared driveways, carparks, lifts, corridors, gardens, recreational areas like pools, etc) of strata-titled properties (apartments, units, townhouses, etc). Bridging finance – If a buyer has recently sold their property and is waiting for proceeds to clear, they can apply for bridging finance to put a deposit on a new home. Buyer’s advocate – A real estate professional who helps clients buy the right property at the lowest possible price. Caveat – A notification on the title declaring a party other than the owner may have a financial interest in the property. Commission – The fee or payment made to an agent for services rendered, such as selling a property. Conveyancer – A licensed professional who ensures all legal requirements are met when buying a property, and helps with the settlement and title transfer process. Cooling-off period – The length of time given to a prospective buyer to consider their impending property purchase. This period does not apply to those buying at auction. DNSWR – Do not sell without referral. When you want the agent to know you have interest in the property and not to sell it without consulting you first. EOI – Expressions of interest. Generally a private sale campaign where agents ask buyers to place their interest and offers by a certain date. Guarantor – The person who agrees to pay your debt if you fail on the mortgage repayments. Highest and best – Where an agent says there is one opportunity to make your “highest and best offer” to try to secure a property. Home equity – The portion of your property you own that does not belong to the bank. As you pay off your mortgage, your equity increases. LMI – Lender’s mortgage insurance. A one-off insurance fee that is payable by those who lodge a deposit below 20 per cent of the property value. It gives banks security when lending to what the banks may consider as high-risk borrowers. LVI – A loan-to-value ratio is the size of your home loan, expressed as a percentage of the value of the property it was used to buy. Off market – When a property is for sale, but it has not officially been advertised. Most off-market purchases occur via buyer’s advocates or direct contact with agents. On the market – When the bidding at an auction has reached the vendor’s reserve price and will be sold to the highest bidder. Pass in – If auction bidding fails to reach the vendor’s reserve price, the property is passed in for further negotiation. The highest bidder has the first right to pay the reserve price or to continue negotiating. Pre-approval – This means the bank has given you conditional approval of your home loan and will indicate how much you can spend when you go to auction. Reserve – The minimum price the vendor will sell for at auction. It can be amended during bidding or at anytime up until the property has sold. Settlement date – The date the sale of the property will be finalised between buyer and seller. Stamp duty – A tax applied to transfers of property and mortgages. Stamp duty amounts vary from state to state, and discounts are available for certain purchasers, including first-home buyers. STCA – Subject to council approval. This signals the buyer will need council approval before carrying out the intended use to which they intend to put to the property or any significant works they intend to make to the property. Turn-key property – A property that is ready to be moved into immediately, with no further works required. Unconditional offer – Not subject to any other conditions such as building, pest inspection or financing. All auction sales are unconditional. Under offer – When an offer on a property has been accepted and the vendor and buyers are in the subject to conditions period of the purchase which means they are yet to be satisfied, such as; finance, building or pest. Under the hammer – This means a property is going to be sold during the auction process, rather than passing in and selling afterwards. Vendor bid – A bid placed by the auctioneer on behalf of the vendor to set a baseline for future bids. BEHIND THE BUZZWORDS Blank canvas – Time to start from the beginning City glimpses – You can see the city however you may need a ladder, it is somewhere in the distance Compact – Tiny Cosy – Small Functional kitchen – Original kitchen that may need to be fully renovated in the near future Lacking natural light – Dark and may need some construction works to improve natural light flow Original – Older condition, dated or specific to a circa period and architectural style Ripe for renovation – The property requires work and may only be be immediately habitable by a very relaxed occupant, you may also need to confirm that the property meets minimum rentable standards in your State or Territory Versatile floorplan – Quite often a description of a floorplan that borrows the intended use of spaces for another uses, eg, bedroom becomes a living space reducing the bedroom count or reducing the living spaces count Walking distance – This could mean a five-minute walk, but it could also mean 25 minutes
Is it better to save up more or buy now? Buy Now! It is our view at Maher Property Group that all real estate is an exhaustible resource, in fact it is a depleting resource. The longer you wait to buy most properties in sought after areas and popular property categories the more you are likely to pay. Savings and buying opportunities are unique to each buyer and dependant on how long you intend to hold a property will influence the price and time of sale value. Consider the first home buyers grant and other government incentives/initiatives, often these incentives create an opportunity for perceived “free money” however with “free money” for more creates an environment of increased competition, which in turn increases the price in competitive circumstances. You should be buying property when you can afford the repayments, holding and maintenance costs. You should also have at least 6 months worth of repayments in the ready should some unforeseen circumstance interfere with your income generating potential. A good rule of thumb is that your housing costs should not exceed 30% of your income. Other considerations are the probability of increased interest charges and other government interventions which may affect your affordability position. There is a lot to consider when buying property as apposed to renting, the security and peace of mind with home ownership generally outstrips the cons though. Home ownership is an Australian expectation, with many and varied pro’s which include wealth creation, future beneficiary opportunity, financial security and a safe harbour living environment, it really is a no brainer for most Australians.
If I am undertaking my own due diligence where should I start? Due diligence checklist What you need to know before buying a residential property Before you buy a home, you should be aware of a range of issues that may affect that property and impose restrictions or obligations on you, if you buy it. This checklist aims to help you identify whether any of these issues will affect you. The questions are a starting point only and you may need to seek professional advice to answer some of them. Rural properties Moving to the country? If you are looking at property in a rural zone, consider: Is the surrounding land use compatible with your lifestyle expectations? Farming can create noise or odour that may be at odds with your expectations of a rural lifestyle. Are you considering removing native vegetation? There are regulations which affect your ability to remove native vegetation on private property. Do you understand your obligations to manage weeds and pest animals? Urban living Moving to the inner city? High density areas are attractive for their entertainment and service areas, but these activities create increased traffic as well as noise and odours from businesses and people. Familiarising yourself with the character of the area will give you a balanced understanding of what to expect. Can you build new dwellings? Does the property adjoin crown land, have a water frontage, beach frontage, contain a disused government road, or are there any crown licences associated with the land? Is there any earth resource activity such as mining in the area? You may wish to find out more about exploration, mining and quarrying activity on or near the property and consider the issue of petroleum, geothermal and greenhouse gas sequestration permits, leases and licences, extractive industry authorisations and mineral licences. Soil and groundwater contamination Has previous land use affected the soil or groundwater? You should consider whether past activities, including the use of adjacent land, may have caused contamination at the site and whether this may prevent you from doing certain things to or on the land in the future. Land boundaries Do you know the exact boundary of the property? You should compare the measurements shown on the title document with actual fences and buildings on the property, to make sure the boundaries match. If you have concerns about this, you can speak to your lawyer or conveyancer, or commission a site survey to establish property boundaries. Planning controls Can you change how the property is used, or the buildings on it? All land is subject to a planning scheme, run by the local council. How the property is zoned and any overlays that may apply, will determine how the land can be used. This may restrict such things as whether you can build on vacant land or how you can alter or develop the land and its buildings over time. The local council can give you advice about the planning scheme, as well as details of any other restrictions that may apply, such as design guidelines or bushfire safety design. There may also be restrictions – known as encumbrances – on the property’s title, which prevent you from developing the property. You can find out about encumbrances by looking at the section 52A statement. Are there any proposed or granted planning permits? The local council can advise you if there are any proposed or issued planning permits for any properties close by. Significant developments in your area may change the local ‘character’ (predominant style of the area) and may increase noise or traffic near the property. Building permits Have any buildings or retaining walls on the property been altered, or do you plan to alter them? There are laws and regulations about how buildings and retaining walls are constructed, which you may wish to investigate to ensure any completed or proposed building work is approved. The local council may be able to give you information about any building permits issued for recent building works done to the property, and what you must do to plan new work. You can also commission a private building surveyor’s assessment. Are any recent building or renovation works covered by insurance? Ask the vendor if there is any owner-builder insurance or builder’s warranty to cover defects in the work done to the property. Utilities and essential services Does the property have working connections for water, sewerage, electricity, gas, telephone and internet? Unconnected services may not be available, or may incur a fee to connect. You may also need to choose from a range of suppliers for these services. This may be particularly important in rural areas where some services are not available. Flood and fire risk Does this property experience flooding or bushfire? Properties are sometimes subject to the risk of fire and flooding due to their location. You should properly investigate these risks and consider their implications for land management, buildings and insurance premiums. Safety Is the building safe to live in? Building laws are in place to ensure building safety. Professional building inspections can help you assess the property for electrical safety, possible illegal building work, adequate pool or spa fencing and the presence of asbestos, termites, or other potential hazards. Is the property subject to an owners corporation/strata? If the property is part of a subdivision with common property such as driveways or grounds, it may be subject to an owners corporation. You may be required to pay fees and follow rules that restrict what you can do on your property, such as a ban on pet ownership. Growth areas Are you moving to a growth area? You should investigate whether you will be required to pay a growth areas infrastructure contribution. Buyers’ rights Do you know your rights when buying a property? The contract of sale and section 52A statement contain important information about the property, so you should request to see these and read them thoroughly. Many people engage a lawyer or conveyancer to help them understand the contracts and ensure the sale goes through correctly. If you intend to hire a professional, you should consider speaking to them before you commit to the sale. There are also important rules about the way private sales and auctions are conducted. These may include a cooling-off period and specific rights associated with ‘off the plan’ sales. The important thing to remember is that, as the buyer, you have rights.
What questions should I ask the agent when buying a home? You can get advice on buying and selling property from experts such as buyer’s advocates, estate agents, conveyancers and legal practitioners. We recommend you engage your own legal practitioner or conveyancer. On this page: Buyer’s agents and estate agents Estate agents’responsibilities to buyers Legal practitioners and conveyancers Section 52A and the Contract of Sale Contract of sale and GST A buyer’s agent, also known as a buyer’s advocate, is a licensed estate agent who, for a fee, acts for a buyer instead of a seller. You can find out if a buyer’s agent is licensed by checking our Public register of licensed estate agents. An estate agent cannot act for a buyer as a buyer’s agent and for a seller on the same property transaction. If you decide to use a buyer’s agent, you will sign a buyers’ agency agreement. Carefully read the agreement before you sign it, as it is the legal document that gives the buyer’s agent authority to act for you, and sets out the fees the agent will charge for their services. What a buyer’s agent can do A buyer’s agent can help you: access data and information about the local property market that is not readily available to the public establish what criteria are most important to you in a property find, assess and shortlist properties that meet your criteria access off-market properties (that is, properties that have yet to be advertised for sale) deal with estate agents selling different properties determine a fair market price for a property inspect a property on your behalf negotiate a price, or bid at auction on your behalf follow up until a sale is finalised and liaise with related parties during the purchasing process select a property manager. Choosing a buyer’s agent Before choosing a buyer’s agent, you should think about the level of service you need. Do you only need help negotiating a price or bidding at auction, or do you want assistance with the entire purchasing process? Consider these questions: How long have they been a licensed estate agent? How long have they acted as a buyer’s agent? How many buyers have they successfully helped to buy property? Does their business exclusively represent buyers, or also act for sellers? What is their policy on acting for other buyers with the same or similar search criteria as you, during the period of the agency authority? Are they experienced in property research, price negotiation and bidding at auction? Do they have access to quality data and information about the property market? Do they have a large network of selling agent contacts, including in areas of interest to you? In what way, and how often, will they communicate with you to provide progress updates? Before signing an agency authority If you decide to engage a buyer’s agent, carefully read the agency agreement before you sign it. Make sure you fully understand the agreement’s terms and conditions, and the fees and charges you will incur for the services the buyer’s agent will perform. If there is anything you don’t understand, consider seeking legal advice. Consider these questions: What time period does the agency authority cover? What services are covered? Are any services excluded? What commissions or fees will you be charged for services performed? Will you be charged a: fixed fee, or percentage of the purchase price of any property you buy? What will you be charged if they don’t find a property you like? Can you terminate the authority if you aren’t happy with their service? Will you be charged for doing so? Do they have professional indemnity insurance? Do they receive any rebates (including discounts, commissions or other benefits) from third parties or service providers they may refer you to? Before you engage a buyer’s agent, make sure that they are a licensed estate agent by checking our Public register of licensed estate agents. You can negotiate the cost of commissions and fees, as they are not set by law. Professional conduct rules applying to buyers’ agents Buyers’ agents are subject to the same general rules of professional conduct as other estate agents. They must act in their client’s best interests, except if it would be unlawful, unreasonable, improper or against a client’s instructions to do so. Estate agents acting as buyers’ agents (and any agents’ representatives working for them) must keep the buyer informed of each stage of the negotiation of a purchase price, in accordance with the buyer’s instructions. Estate agents’ responsibilities to buyers Although an agent’s responsibility is to the seller, they are also obliged to act responsibly and ethically when dealing with you, the buyer. As a buyer, you can expect an estate agent to: take your details and provide free information advice about relevant properties for sale answer any reasonable questions you have arrange inspections give you a Statement of Information for a property for sale provide a copy of the Section 52A statement communicate genuine offers to the seller provide the contract of sale. Legal practitioners and conveyancers Transferring land ownership from the seller to the buyer is called conveyancing. This is often done with the help of a legal practitioner or conveyancer. Legal practitioners must have a current practising certificate and conveyancers must be licensed. They must both have professional indemnity insurance – this will cover any financial loss you suffer as a direct result of their information and advice. We recommend you: choose a legal practitioner or conveyancer that you feel comfortable with and who meets your needs check references and make enquiries about the standard of their services get written quotes from several, and discuss all disbursements (administrative costs). There are differences in what legal practitioners and conveyancers are allowed to do on behalf of a client. Legal practitioners A legal practitioner can: review and advise on the Section 52A statement and the contract of sale ensure that the transfer of title is done correctly advise on terms and conditions that need to be included in a contract to meet your needs advise how different types of title may affect ownership rights and responsibilities perform general legal work and provide legal advice. Conveyancers A conveyancer can: undertake property conveyancing work carry out legal work or give legal advice regarding the transfer of title. You can engage a conveyancer to: find and review property titles check the Section 52A statement advise on the terms and conditions in the contract of sale. Section 52A statement Before a property is sold, the seller must give you a ‘Section 52A statement’ as required by section 32 of the Sale of Land Act 1962. View Legislation we administer. The Section 52A statement contains information about the property’s title, including: property certificate (title search) drainage diagrams the planning certificate issued by the local council any dealings on the lot relating to an easement, profits à pendre, restrictions on the use of land or positive covenant a notice with respect to smoke alarms and loose-fill asbestos insulation (unless the notice is printed in the contract) The statement is: prepared by the seller’s legal practitioner or conveyancer signed by the seller attached to the contract of sale available to prospective buyers along with the contract of sale, before the sale or auction of sale and GST You can make an offer to buy a property by signing a contract of sale. The offer is accepted and the property is sold when the seller also signs the contract. The contract of sale contains: details of the property names of the seller and buyer details of the seller’s estate agent, if they have one details of the seller’s and buyer’s legal practitioner or conveyancer, if they have one the property price the deposit the balance owing at settlement any special conditions such as ‘subject to finance’. The contract must clearly specify whether the sale price includes or excludes the goods and services tax (GST) and, if it is included, the amount. Generally, the GST only applies to the purchase of new homes. It does not apply to established homes unless the seller is registered for GST. You can check a seller’s GST status on Australian Business Register.
What happens on auction day? Important Guidelines for Auction There are strict rules governing the conduct of a public auction in the interest of transparency and fairness. Substantial penalties may apply to anyone who breaks these rules. Before accepting a bid at an auction an auctioneer must: state that the auction will be conducted according to the auction rules state any additional conditions that apply to the auction indicate who made a bid if asked to do so state that the law prohibits an intending bidder from making a false bid, hindering another bidder, or in any way intentionally disrupting an auction state that substantial penalties apply to anyone who engages in prohibited conduct. Vendor bid A bid may be made by the Auctioneer on behalf of the vendor (seller) because the seller is not satisfied with the amount of the last bid. This is known as a ‘vendor bid’ and will be announced by the Auctioneer at the time the bid is made. Only the Auctioneer can make such a bid. Vendor bids are legal, but only if they are permitted by the auction rules. The arrangements for making vendor bids must be set out in the rules displayed before the auction starts and announced by the auctioneer at the start of the auction. Bidding at an auction Different auctioneers have different methods of conducting an auction. The Auctioneer can set the amount by which bids increase. These are called rises or bidding advances. The bidder may make a bid at the amount stated by the Auctioneer or offer an alternative amount. The Auctioneer may in turn choose to accept or reject any bid. On the market If the Vendors reserve price has been met the Auctioneer may call the property on the market. This means that the property will then be sold, at the seller’s discretion. At the fall of the hammer the property will be sold to the highest bidder and a legally binding contract of sale will be signed by both the buyer and seller. The buyer will also be required to pay the deposit specified in the contract (unless otherwise agreed). As this is an auction, the buyer cannot make the contract subject to conditions and there is no cooling-off period. Passed in If the seller’s reserve is not met, the Auctioneer will seek further bids. If the reserve is still not met, then the property may be ‘passed in’ or ‘withdrawn from auction’. The seller may then negotiate with the highest bidder who will be given the first opportunity to purchase the property at the seller’s asking price.
What do I need to know when selling a property in New South Wales? What you need to do. A residential property in New South Wales cannot be advertised for sale until a contract of sale has been prepared. The contract must contain a copy of the title documents, drainage diagram and a current Zoning Certificate (section 10.7) issued by the local council. If the property for sale has a swimming or spa pool, one of the following must also be attached to the contract from 29 April 2016: a copy of a valid certificate of compliance, or a valid occupation certificate (issued in the past 3 years) and evidence that the pool has been registered, or a valid certificate of non-compliance. This requirement does not apply: to a lot in strata or community schemes that have more than two lots, or for any off-the-plan contract. If you fail to attach one of these documents to the sales contract, the purchaser may be entitled to rescind the sales contract within 14 days of exchange, unless settlement has already occurred. To check if the property with a swimming/spa pool has a valid certificate of compliance, visit the NSW Swimming Pool Register website. Property exclusions must also be included and a statement of the buyer’s cooling-off rights must be attached. Visit the NSW Land Registry Services website for more information. Selecting the right agent The most universal questions raised with agents are generally asked in this sequence What is my property worth? How does the agent determine their opinion of worth? Will the agent be able to achieve my desired price outcome? What are the selling and marketing costs and when do I have to pay? What method of sale is best for me and my property? What is the marketing plan?How will the agent communicate with me throughout the sale process? What security measures are undertaken to keep my property and family safe? What type of inspections will take place and will the agent tell me what to expect? What will the agent say to buyers about my motivation to sell? Does the agent have local knowledge? Will the agent give advice as to how best present the property for sale? Who will prepare my contract of sale and what will I need to provide the legal or conveyancing company? What needs to be signed in order to take the property to sale?
What Rights and Obligations do both a Landlord and a Tenant have when renting in New South Wales? All of the Rights and Obligations when providing rental accomodation and when renting in New South Wales.