If you’ve ever wondered what all those real estate terms really mean, here we’ve compiled a useful glossary to help you decipher ‘agent speak’ and navigate the real estate landscape.
Agent: A registered person contracted to act for another in the selling, buying, renting or management of property.
Appraisal: An opinion of the potential saleability of a property by a licenced real estate agent.
Auction: A sale, usually in public, of a property sold to the highest bidder.
Body Corporate or Owners Corporation: The collective ownership of common property such as a block of apartments or multi–dwelling complexes. It is responsible for the administration and upkeep of common areas.
Bridging Finance: A short-term loan, usually at a higher rate of interest, taken out by people who have bought a house while waiting for theirs to be sold, or when a normal mortgage and/or their savings fall below the asking price.
Buyer’s Advocate or Buyer’s Agent: Represents a property buyer in negotiations with a vendor or his/her agent. The buyer’s agent is paid by the buyer. Buyer’s agents should be licensed and certified to act as a buyer’s agent.
Capital Gains Tax: A Commonwealth Tax payable on the capital gain made on the sale of an investment property. Refer to the current requirements of the Australian Taxation Office (ATO).
Certificate of Title: A document issued under the Torrens Title System of Title, showing ownership and interest in a parcel of land.
Commission: A negotiable percentage or agreed amount of the selling price of a property, paid by the seller to the property agent, normally after the property is sold.
Community Title: Similar to Strata Title but applicable to developments combining a variety of dwelling styles and communal facilities where an overall style and theme must be adhered to.
Contract or Agreement of Sale: A legal document relating to the sale of a property which expresses the terms and conditions of the sale.
Conveyancer: A person (not a legal practitioner) who, for a fee, handles the process of transferring property.
Cooling-Off Period: A period of time during which a buyer can withdraw from the sale of a home (if not purchased at auction). Duration varies from state to state. The duration must be outlined in the Agreement of Sale.
Deposit: Percentage of the total consideration, or an agreed amount, paid on exchange of a contract for purchase of an asset.
Depreciation: Is a non-cash allowance that you may be able to claim on your tax which reflects the limited life of an asset.
Equity: The difference between the market value of the property and any loans outstanding on the property.
Gazumping: If someone has agreed to sell you a property and then sells it to someone else for a higher price, you have been gazumped!
Investment: The purchase of an asset, such as real estate, with the ultimate goal of producing capital gain on the resale of the asset.
Land Tax: Value-based levy applied to some property (exemptions include principal place of residence).
Landlord: The owner of property being rented.
Lease or Lease Agreement: The lease (also known as a tenancy agreement) is a legal contract between the tenant, landlord and agent. This covers the amount of rent to be paid, the method of payment, term of the agreement, security bond amount and other conditions and rules.
Lessee: One who leases/rents a property from a lessor/owner.
Mortgage: A written contract giving a lender security over a property.
Mortgagee: One who lends the money for the property.
Mortgagor: One who borrows the money to purchase property.
Negative Gearing: Where the costs associated with your property investment exceed the income received over the tax year.
Off the plan: Buying a property based on architect’s plans, before it has been built.
Principal: The actual amount of money that has been borrowed to buy a property.
Private Sale: The seller does not engage an estate agent but acts on his own behalf, dealing directly with the buyer.
Private Treaty Sale: The sale of property via an agent through private negotiation and contract.
Reserve Price: The lowest acceptable price set by the vendor.
Semi-detached: Two buildings joined by a common wall.
Settlement: The occasion when ownership of a property passes from the vendor to the buyer and the balance of the sale price is paid to the vendor.
Stamp Duty: A government tax imposed on contracts with the amount usually calculated as a percentage of the contract value.
Strata Title: Applies to more than one property on a single piece of land, such as an apartment block. Each unit will have a separate strata title, organised under a ‘strata plan’.
Tenant: One who leases/rents a property from a lessor/owner.
Title Search: A check of public records to make sure that the vendor has the right to sell and transfer ownership of a property.
Torrens Title: The standard certificate recognising land owned by the person registered on that document.
Townhouse: Two storey attached building, usually strata-titled.
Valuation: The estimation of the value of a property by a qualified and registered valuer.
Vendor: A person selling a property.