Closing a deal on a property can be an exciting time, but it can be watered down by the jargons that comes with property settlement. Unless if you work in the real estate side of things or you happen to be a lawyer who deals with such things, it can get a bit confusing. To ease the furrow in your brows when closing on a property settlement we have put together 7 jargons you need to know.
1. Contract of sale
This is a process that will happen before you reach settlement. A contract of sale is a document that outlines the terms and conditions under which you agree to buy, and the vendor agrees to sell a property. It will contain important documents such as the copy of the title documents. This is a process that will give the essential property information such as the offer you made, the agreed amount of deposit, and the settlement date.
First things first, you need to understand what settlement means. Thankfully for you as the soon to be property owner, this is the final step of property buying process. This is the activity which will occur between the seller and buyers legal and financial representatives to legally close off the deal. The property settlement period usually takes 30 to 90 days. Your role as a buyer during this process is to pay the seller all outstanding amounts that are needed to settle the purchase. Once this has been completed the seller will provide the buyer with a signed form which is also known as a transfer. You will need a legal practitioner or a conveyancer to help you complete the transaction.
3. The cooling off period
This can be seen as the final step when it comes to the exchanging and processing of all legal documents to legally transfer the house to you. This is also the time frame where a seller can choose to cancel the contract. This will differ from state to state. This is also limited to properties that were purchased outside of Auctions, rural areas, and commercial real estate. The buyer can also choose to terminate the contract the person who chooses to walk away doesn’t get to walk away without paying a fee. This means they could forfeit 0.25% of the purchase price which will go to the seller.
4. Torren and Strata Tiles
This pertains to land ownership. The most common type is Torrens Tile which refers to the ownership of both land and property, which is will be the house and the land that your house stands on. Strata Tile refers to the purchasing of villas, units, and townhouses. It essentially means that you along with the people you share a common area with in a building will be responsible to paying the strata fees and maintenance through a Body Corporate.
5. Certificate of title
This is a document that is the evidence that you are know the owner of the property. This is an important document that identifies the person who is registered for the property, leases, mortgages and more.
6. Stamp duty
Stamp duty is one of the large expenses you will have to deal with when transferring land or property. It is a charge that is applied by the state and varies from state to state. Stamp duty needs to be paid by the buyer within 30 days of the exchange. The amount you will pay on your stamp duty will differ and will also depend on the market value of your property.