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A jargon-busting guide for first home buyers

Real estate and legal jargon can be overwhelming for first home buyers. Here's a handy guide to some commonly used terms.

Vendor The seller (current owner) of the property, whether it’s one person, multiple people or a company.

Conveyancer The person who oversees the conveyancing process (the legal change of ownership of the property). A lawyer/solicitor can perform the same job as a conveyancer, but only a lawyer/solicitor can provide legal advice.

Vendor Statement / Section 32 A compilation of documents setting out information legally required to be provided about a property for sale, as set out in Section 32 of the Sale of Land Act (Victoria). 

Subject to Finance Approval A special condition in the contract, requiring the purchaser’s finance application to be approved by a certain date (usually within two weeks of the date of sale), in order for the transaction to proceed. 

Mortgage A legal encumbrance or control over the title of a property, held by a bank as security for its loan to the owner of the property. The bank is the mortgagee, and the property owner is the mortgagor.

Unconditional The contract has reached the legal status of proceeding to settlement (which is automatic, if the property was sold under auction rules).

Settlement The legal process for transferring ownership of a property, conducted via the online PEXA e-conveyancing platform. Settlement usually takes 30-45 minutes to complete, shorter if there are no banks involved. Settlement occurs on the settlement date listed in the contract, or on another date that the parties subsequently agree to.

Trust Account A strictly regulated and audited bank account, operated by lawyers/solicitors, conveyancers and real estate agents.

Owners Corporation The legal owner and manager of shared, or common, property in a plan of subdivision (formerly known as a body corporate).  

Statement of Adjustments An itemised summary of the total funds owing to the vendor at settlement, including pro rata apportioned outgoings (such as Council rates). 

Arrears Overdue outgoings (such as Council rates) which are paid off in full by the vendor (without any apportionment) at settlement.

Shortfall The gap between the total amount required for settlement (including stamp duty and government charges) and any mortgage/loan funds being provided.

Electronic Shortfall Authority  The bank account with the incoming mortgagee bank, from which the purchaser’s savings money will be electronically deducted at settlement.

Note: the above is general information and should not be considered as legal advice.

Have you seen our earlier sister'blog? The three biggest mistakes first home buyers make

Photo via Pixabay

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