Real Estate Terms

A B C D E F G I J L M O P Q R S T U V Z

Adjustment

The apportioning of expenses such as rates between a buyer and vendor.

Allotment

A lot or block subdivided from a larger land area.

Amortisation period

The full term of a loan; the number of years it is expected it will take to completely repay a home loan. 25 years is usually the maximum amortisation period.

Appraised value

An estimation of the market value of a property pledged as security for a home loan.

Assets

Things owned.

Auction

Public sale of a property to the highest bidder.

Breach of contract

When one party does not honour a contract's terms.

Brick Veneer

A single external wall of brick tied to a wooden frame.

Bridging finance

A loan that can be taken over a short period when buying a home before selling a current one, usually at a high rate of interest.

Building regulations

Standards, usualy enforced by local councils, which ensure the safety of buildings.

Caveat

A warning to potential dealers in a property that the person who lodged the caveat has some right or interest in the land.

Caveat Emptor

Latin for "Let the Buyer Beware"; i.e. a buyer should be satisfied with a property before purchasing it.

Certificate of Title

A legal document issued by the Registrar of Titles to detail the ownership of land.

Chattels

"Real" chattels are things that can't easily be removed or things that are attached to a property, while personal chattels are things that are easily moved, like furniture.

Cluster housing

Houses located close together with a common open space for use by all residents.

Cluster Title

Similar to a Certificate of Title specifying a particular area of land which the owner is responsible for. A Cluster Title also specifies the common property, but does not subdivide airspace.

Commission

A fee paid to a real estate agent, usually by the person selling the property. Often a percentage of the selling price.

Common Property

Areas of land that are not owned by individuals, but by all owners of Strata Titles.

Company title

A property title that applies when a company owns the whole property. A company consists of owners of units in the same block who all own shares in that company. The company approves any change of occupancy in the property. It is a good idea to consult a solicitor before buying.

Contract Note

A document detailing the terms and copnditions of a property sale.

Contract of Sale

A contract note signed by both the seller and the buyer. When signed it becomes legally binding and must be accompanied by a vendor statement.

Conveyancing

The legal transfer of property ownership from one person to another.

Covenant

Terms and conditions noted on the title which may affect future use of the property.

Deposit

A guarantee put forward by the buyer towards the purchase of a property. Usually 10% of the purchase price.

Dual occupancy

Two (usually separate) residences built on the same block.

Easement

A right to use a part of land owned by another person for a specific purpose.

Encroachment

An intrusion of a structure onto another person's land, e.g. a fence over the property line.

Encumbrance

A liability which impedes a property's transfer, such as a mortgage or other charge.

Equity

The value of a property after mortgages and other charges have been deducted from the market value.

Expression of Interest

A method to publicly sell property by seeking public interest in a written format. Interested parties specify their level of interest, preferred settlement period and deposit amount by a closing date. Neither the vendor nor the highest interest party are bound by the Expression of Interest. Commonly known as EOI.

Fittings and Fixtures

Items which cannot be removed easily or without causing damage to property, such as stoves, wardrobes, etc.

Flat Interest Rate

An Interest rate which is only calculated using the original amout of the mortgage.

Freehold

Complete ownership of both a property and the land it stands on.

Gazumping

Where a seller agrees to sell a property to one buyer but then sells it to another buyer for a higher price.

General Law Title

Of historic interest - an old form of land ownership using a chain of documents.

Interest-only Loans

A loan where the amount borrowed is not paid back until the end of the term of the loan and interest only payments are made for the rest of the loan period.

Inventory

A lits of chattels which are included with a property when it is sold.

Investment

The purchase of a property in order to make more monetary gain on resale of the property.

Joint Tenants

When two or more people hold a property in equal shares. If one person dies their share is passed on the the suvivor/s.

Land Tax

A State Government tax based on the value of the land. It is charged to owners of any property unless the property is their principal place of residence.

Lease

A document granting temporary tenancy for a specified time under specific terms and conditions. It does not grant ownership.

Leasehold

When someone buys the right to own a property but still leases the land off the freeholder.

Liabilities

Outstanding debts.

Limited Title

A form of "Torrens title" applying to a property when the land has not been fully defined by survey.

Maturity date

The due date of the final payment on a loan. The loan must be payed on this date, unless the loan agreement can be renewed.

Mortgage

A financial agreement where a property is used as security for repayment of a loan.

Mortgagee

The lender of the money for purcahse of a property.

Mortgagor

The borrower of money for purchase of a property.

Multiple Listing

When one listing is shared between multiple agents, all of whom are able to look for potential buyers. The commission is shared between the first agent who listed the property and the agent who finds a buyer.

Offer to purchase

A legal contract offering a specific price for the purchase of a specific property. It can also set out the terms under which the buyer is willing to buy. An offer is conditional if there are certain terms in the document, or firm if there are no specific terms and conditions.

Old System Title

Also called the Common Law Title. This is another old and complicated form of land title which is based on a series of documents called a "chain of title".

Option fee

A fee, usually 1% of the price, payed by a buyer if they terminate a real estate contract.

Option to Buy

A legal document which gives a person the right to buy. The document usually contains a specified time frame and price for the purchase of the property.

Party Wall

A wall or fence built on the boundary line between two adjoining properties which is shared by both owners.

Plan

A scale drawing of a building showing the position of the house on the land, the elevation of the house and the number of rooms and their sizes, among other things.

Principal

The original amount of money borrowed to purchase a property.

Private Sale

Conducted by a seller acting on their own behalf, dealing directly with a buyer.

Private Treaty Sale

The sale of a property through an agent where the buyer and seller negotiate a price and sign a contract affecting the sale.

Qualified Title

Old System Titles converted to Torrens Titles which have not been fully investigated.

Real Property

Land, including all structures affixed to the land and other improvements made.

Requisition of Title

Written information about the title of a property that a buyer askes the seller for in addition to the Contract of Sale.

Reserve price

The lowest price an owner will sell for at auction.

Right of Way

The right to pass over land owned by another.

Rise and Fall Clause

A clause containd in a building contract which allows the final price to move up or down depending on the movement of wages or other specified factors.

Security

Property or money pledged as backing for a loan.

Semi-detached

Two houses joined together by a common wall.

Settlement

When the buyer pays the seller the agreed amount for the property and the buyer legally gains ownership of the property.

Sole agency

Where the exclusive rights to sell a property are given to only one agent.

Stamp duty

A real estate tax imposed by the State Government determined by the total value of the property, including chatells.

Strata Title

Grants ownership of a small piece of a larger property, such as a unit or townhouse. The owner becomes part of the body corporate and can also sell, lease of transfer the unit at their discretion. It includes airspace.

Stratum Title

Also grants ownership of a smaller piece of a larger property, but unlike a Strata Title, the owner becomes a shareholder in the company that manages the common area of the property. It does not include airspace.

Survey

A plan detailing property boundaries and improvements.

Tenants in Common

An arrangement where two or more persons have joint ownership of a property.

Tender

The sale of property through seeking written bids by a specific closing date. The interested party is bound by the written bid (if it is accepted by the vendor) and generally a deposit is paid when the written bid is submitted.

Term

The period of time the borrower has to pay back a loan, set by the lender.

Title search

The process of checking title records to determine whether the seller has the right to sell a property. It also identifies any encumberances or caveats on the title.

Torrens Title

The most common system of recording ownership of property in Australia. Also known as Certificate of Title.

Transfer

A document which records the change of ownership of a property, registered with the Land Titles Office.

Tri occupancy

Three residences built on the same block.

Unencumbered

A property which is free of mortgages and other restrictions.

Unimproved Value (UV)

Unimproved land value is the dollar figure a block of land is deemed worth without any buildings or structures on it. Currently, it is calculated based on its location and comparable vacant land sales. It is also the basis on which state land taxes and council rates are calculated.

Unit-title

Ownership of a small piece of a larger property, such as a unit or townhouse. The owner becomes part of the body corporate and can also sell, lease of transfer the unit at their discretion.

Valuation

A professionals estimation of the value of a property.

Variable rate loan

The interest rate on the home loan will change as the money market changes.

Vendor

A person offering a property for sale.

Vendor Statement

A statement by the Vendor of a property which details particulars regarding the property.

Villa

A detached or semi-detached single storey dwelling.

Zoning

Regulations that control how land is used.