Real Estate Jargon

Agent: A real estate agent can act on behalf of a landlord or owner when leasing or selling a property. They can be appointed as a Buyer’s Agent or a Seller’s Agent.

Appraisal: The estimated price at which an agent thinks the property will sell based on recent sales and local knowledge.

Asking price: The listed price of the property. The owner may be willing to negotiate so this may not be the selling price.

Auction: A public sale where a property is sold to the highest bidder. A property is Passed In at auction if the highest bid fails to meet the reserve price set by the seller. At an auction, the Reserve Price is the minimum price acceptable to the seller of a property.

Body corporate: All the unit owners within a strata building. The owners elect a council responsible for the management of the building and its common areas.

Building inspection: An inspection generally carried out prior to the purchase of a property to ensure the building is structurally sound. Contracts of sale can be made subject to the satisfactory building inspection.

Capital gains tax: A federal tax on the monetary gain made on the sale of an asset bought after September 1985. The tax does not apply to the gains made on the sale of an owner-occupied residence, so it generally applies only to investment properties. Always wise to check with the ATO or your Financial Adviser

Caveat: A caveat lodged upon a land or property title indicates that a party, that is not the owner, claims some right over or interest in the property.

Certificate of Title: A record of all current information relevant to a particular property or piece of land. Also known as a Title Deed.

Chattels: In real estate terms chattels are usually movable items which may be included in the sale, for example dishwasher, pool equipment, items of furniture.

CMA – Comparative Market Analysis: used to estimate a price for a property using recent sales and current properties on the market similar to the property being assessed.

Commission: The fee or payment made to a real estate agent for their services.

Contract of Sale: A written agreement outlining the terms and conditions for the purchase or sale of a property.

Contract Date: Once agreement is reached and a contract is signed by the buyer and seller the contract is dated.

Conjunction: A non-listing agent can arrange with listing agent to take a potential buyer through a property and the two agents/agencies can then share the commission on a percentage basis.

Conveyancing: The legal process for the transfer of ownership of real estate.

Deposit: An initial deposit may be paid by the buyer when a contract is signed and dated (with Direct Deposit it is advisable to allow a few days to enable money transfers to be made). This may be followed by a further deposit at some point of time during the contract period (often when the contract goes unconditional). It indicates a commitment to buy.

Disbursements: Miscellaneous fees and charges incurred during the conveyancing process, including search fees and charges paid to government authorities.

Easement: A right to use a part of land owned by another person or organisation, for example, to access another property. Usually listed on the Title.

Encroachment: When a building overhangs someone else’s property, or a fence is built over the dividing line between two properties.

Encumbrance: An outstanding liability or charge on a property. May be listed on the Title.

Equity: The amount of a property actually “owned” by the owner. It’s the current value of a property less the amount still owed on its mortgage.

Fittings: Items not intended to be removed from a property when it’s sold, for example fixed carpets, lights and curtains.

Joint tenants: Equal holding of a property between two or more people. If one party dies, their share normally passes to the survivor or survivors.

Lease: An agreement between a property owner and a tenant. It allows the tenant to occupy and use a property for a set period in exchange for a set rent.

Listing types (Authority to Sell): An Open Listing is the system of selling the property through more than one agent. The buyer pays only one commission. An Exclusive Listing is where only one agent is given the opportunity to sell the property – there is a fixed period of up to 90 days which can be renewed. A Joint Exclusive is where more than one agent is given the property and the commission is to be shared on an agreed percentage basis. Sole Agency is where agent/s are given the listing but the owner retains the right to find their own buyer without having to pay the agent/s a commission.

Property management: A real estate agent manages properties for landlords ensuring the property complies with legislation and regulations at all times, selecting tenants, collecting rents, arranging maintenance and so on.

Searches: Research carried out, prior to the settlement of the property, to confirm information about the property. Searches are usually arranged by a solicitor.

Settlement: Completion of sale. When the balance of the contract price is paid to the vendor and the buyer is legally entitled to take possession of the property.

Stamp duty: A State Government tax based on the purchase price of the property.

Strata title: The most common title associated with townhouses and home units. It acts as evidence of a unit’s ownership. In a strata plan, individuals each own a small portion of a strata building such as a unit – which is identified as ‘lot’ on the title. All owners in a strata plan share common property such as external walls, windows, roof, driveways, foyers, fences, lawns and gardens.

Tenants in common: A form of agreement often used when friends or family purchase a property together. It details the equal or unequal holding of property by two or more people. If one person dies, their share passes according to their Will or the law, rather than to the owner of the other share.

Valuation: A written analysis of the estimated value of the property prepared by a qualified valuer.

Zoning: Local authority guidelines for the permitted use of the land.