In Nomini Maximus Officium

In the Name of Great Service Your Local Realtor

Glossary of Real Estate Terms

48-hour clause: Where an offer is subject to the sale of your home the seller may want to include a ’48-hour clause’. Should the seller then receive an unconditional or subject to finance only offer you will have 48 hours to make your offer unconditional or your contract will be cancelled. This leaves the seller free to accept the unconditional offer from the other buyer.

It is important that the clause says when the 48 hours begins and ends (for example, 48 hours begins when buyer is notified and does not include weekends or public holidays).

Buyer’s agent: When the buyer makes an agreement for a real estate agent to represent them exclusively.

Certificate of Title: A page of the Register book specifying the ownership of a defined land parcel, and the lodged or registered interests or claims (encumbrances) against that ownership.

Chattels: Is an item that can be moved and not considered to be part of the structure, for example, dishwasher, clothes dryer, rugs, mats and pot plants.
If there is any confusion between the buyer and the seller about what stays and what goes these can be identified as a special condition in the offer and acceptance document.

Cooling off period: Once the contract has been signed, there is NO cooling off period in Western Australia, that is, there is no time option to reconsider the offer – it is legal and binding immediately upon signing.

Counter offer: Is a rejection of an offer – it is a new offer which may be accepted or rejected.

Deposit: The agent holds the deposit and must not release the money without the consent of both the seller and the buyer.

Deposit – Breach of contract: It is considered a breach of contract if the deposit is not paid as agreed.

Deposit – Disputed: If the seller considers a contract has been terminated and retains the buyer’s deposit, they must tell the buyer and the person holding the deposit. The buyer has 5 business days to dispute the seller’s claim – or the deposit remains with the seller.

Encumbrance: An encumbrance is a lodged or registered interest in land by a person who is not the registered owner.

Encumbrances – CaveatI: Means ‘beware’. It is used to warn prospective buyers that another party has registered some form of right or interest in the property. Details of a caveat are written on a property’s certificate of title (such as money is owing on a property that is for sale).

Encumbrances – Easement: Gives a person or a company ‘rights of use or engagement’ over land owned by another. Usual easements are rights of way, easements for the flow of water over and through another’s land, and easements of support (for example, Water Corporation, Western Power, Main Roads WA, telecommunication companies).

Encumbrances – Memorial: Is a document lodged with Landgate under one of a number of statutes. When noted on a certificate of title, places some form of notice/restriction on a property (such as notification that the land is reclaimed swamp).

Encumbrances – Restrictive covenant: This places some type of restriction on the use of the land. Examples – the land must be landscaped or buildings to be constructed only of brick. For it to be lifted, consent must be obtained from the party named in the covenant or by a court order.

Encumbrances – Right of way: Is a strip of land either for use by the general public, or a restricted section of the community. It may be created by subdivision, specific transfer, or continued use over a period of years.

Error or misdescription: Refers to an error in how certain details of the land are recorded in a contract, for example, property boundaries and/or the area of the land. If this occurs, it is recommended to the buyer that they seek legal advice.

Fixtures: An item that is fixed or part of the property, for example, carpets, down lights and built in robes.
If there is any confusion between the buyer and the seller about what stays and what goes these can be identified as a special condition in the offer and acceptance document.

Forfeiture: Describes the act of the State taking back an interest in Crown land, due to the interest holder’s failure to comply with a condition.

General Conditions: Cover important contractual obligations for both buyer and seller including such matters as the paying and holding of a deposit, settlement, adjustment of outgoings, and other payment responsibilities such as underground power and sewerage connections. It is possible to vary the contractual obligations.
You can for instance, delete or amend existing contractual obligations that form the General Conditions should you choose. The seller would have to agree with the changes if the contract is to be binding.

Joint Form of General Conditions for the Sale of Land The General Conditions: (sometimes called the ‘Yellow form’) A standard part of any contract to sell a property and deal with many issues that arise between a buyer and seller entering into a contract. When an offer is made, a printed set of General Conditions is presented to both the buyer and seller.

Joint Tenancy: The ownership of land in common by more than one person where there is a right of survivorship, that is where on the death of one joint owner, the share of the interest of the deceased goes to the surviving owner(s).

Offer: A definite undertaking – a proposition that will become an undertaking on its acceptance.

Offer and acceptance document: Together with the Joint Form of General Conditions for the Sale of Land, it is a legally binding contract that details the terms and conditions under which the purchase and sale will take place.
Most properties in Western Australia are sold through an offer and acceptance process. A person makes a formal offer in writing to buy a property, and the seller either accepts or rejects the offer.

Pre-approval of a home loan: When your bank of finance broker approve in writing a home loan in principle for a specified sum.

Property title: Proof of a person’s right to land.

Special Conditions: Special conditions can be added to the O & A to meet the particular needs of both buyer and seller. Special conditions may cover issues about property inspections (eg building and timber pest inspections), who pays for necessary repairs (eg the repair of a broken window, fixing plumbing, etc), or anything else important for either buyer or seller.
Any special conditions made to the O & A should be as precisely worded as possible and you may wish to seek legal advice to ensure this.
If the seller agrees to all conditions and the offer is accepted, there is a legal obligation to satisfy every condition or the sale may not be completed. However, before signing the O & A, you should carefully consider your financial situation and thoroughly inspect the property.

Transfer of Land document Certificates of Title: Otherwise known as Title Deeds, these are issued by Landgate with one original and one duplicate copy. The original is always kept at Landgate. The duplicate copy is normally held by the registered proprietor (owner) or by a lending institution as security for a loan. The important difference between these two Title Deeds is that the duplicate Certificate of Title does not include all encumbrances such as caveats and property (seizure and sale) orders. They are, however, always listed on the original Certificate of Title that is kept at Landgate.

Tenants in Common: Where there are two or more people to hold the land in undivided shares. For example X has 1/3 share and Y has a 2/3 share of the land. Both X and Y can transfer their shares to another or others. On the death of one party the land does not automatically go to the remaining partner unless stated in the will.

Vacant possession: A buyer can take possession of the property at noon on the day after settlement or, if the property is vacant, as soon as the settlement process is complete.

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