GLOSSARY OF TERMS

At TJS Agency Real Estate, we try to use as little real estate jargon as possible. We’ve given simple, brief explanations of what terms mean and you’ll find more details once you go through the relevant pages. If you do come across terms that you may not understand – or you can’t see here – feel free to ask us.

 


A
Apportionment of rates, taxes, body corporate, rent, insurances etc. Up to the date of possession or settlement on a sale.

Agency Agreement-
The contract between the seller and the Real Estate agent including how the property will be marketed, sales commission and term of the agreement.

Agent’s Exchange
This is where the agent conducts the exchange of contracts and involves a cooling-off period.

Amenity –
A feature of a property that enhances its attractiveness and increases the occupant’s or user’s satisfaction although the feature is not essential to the property’s use.
e.g. Proximity to public transport or shopping centre.

Apartment-
A dwelling that is self contained, attached and forms part of a strata complex. A generic name for a flat or apartment within a complex.

Appraisal –
An opinion of the saleability of a property and its value without carrying out a full scale valuation.

Appreciation –
An increase in the value of a property due to the changes in market conditions, or supply and demand.

Architrave –
A decorative moulding around doors and windows.

Asking Price –
The listed price of a property, but may not always be the sale price. The owner may be willing to negotiate.

Assets –
Real and personal property in which a person has unencumbered ownership (free from a mortgage or any debt owing) or equity and which has value.

Assessed Value –
The valuation placed on a property for the purposes of taxation by an authority.

Auction –
A public sale of a property or real estate that is sold to the highest bidder.

Auctioneer –
One who sells or offers for sale real estate where persons become purchasers by competition, being the highest bidder.

Authority of Exchange or Sale Note-
A form, signed by both buyer and seller, which authorises the agent to exchange contracts on their behalf.


 B

Balance of Deposit
When the deposit is agreed to paid in two parts, this is the amount left to pay (after the initial payment) prior to the end of the cooling-off period.

Bank Valuation-
This is a written estimation of the value of the property, carried out by a qualified Bank Valuer.

Bid-
To offer a certain price at an auction.

Body Corporate –
An administrative body made up of all the owners within a group  of units or apartments of a strata building. The owners elect a  committee which handles administration and upkeep of the site.

Bond –
A sum of money paid by a tenant and held by the Rental Bond Board to ensure against defaulting on payment and damage to the property.

Breach of Contract –
The breaking of the obligation which a contract imposes. E.g. If a buyer has not paid the required deposit prior to a Cooling-off-period expiring

Brick Veneer –
A type of construction in which the exterior walls of the property are brick and the interior walls of the property are not (usually gyprock or plaster)

Bridging Loan –
A short-term loan (usually at a higher interest rate) taken out to cover the financial gap between buying a new property and selling an existing property.

Building Code –
Local regulations that control design, construction and materials used in construction.

Building Inspection
A thorough inspection of the property’s structure and its general condition, performed by a certified Building Inspector.

Building Inspector
A certified person who conducts a thorough inspection of a property’s structure and its general condition for a fee.

Built in
A wardrobe that is permanently attached to the wall

Buyer (or Purchaser)-
The person buying a property.

Buyer’s Market –
When the demand for property is less than supply so the advantages shifts to the buyer.

 


C

Capital Gains –
The difference between purchase price and selling price in the sale of an asset. Used primarily in income tax calculations.

Capital Gains Tax –
Is the tax you pay on any capital gain you make and include on your annual income tax return. There is no separate tax on capital gains, it is merely a component of your income tax. You are taxed on your net capital gain at your marginal tax rate.

Carport –
An open-ended, roofed car shelter, usually created by extending the roof from the side of a building along a driveway.

Caveat –
A warning on a title to a purchaser that a third party might have some interest or right in the property.

Certificate of Occupancy– 
A document issued by a local government to the owner of the property permitting the structure to be occupied. This generally indicates that the building is in compliance with public health and building codes.

Certificate of Title –
A description of a property with the name of the registered owner, encumbrances, i.e. mortgages or easements on the property. It must be produced by the vendor before the sale of the property.

Chattels –
Movable items of personal property such as furniture that may be included in a sale.

Circa –
About; around; an approximation (age)

Cladding-
Thin sheets or slabs used to enclose a framework and provides further protection and easier maintenance to a property.
E.g. imitation brick, aluminium or permalum cladding.

Client-
The seller or vendor is the client of their appointed real estate agent. The buyer is the client of the agency that they buy through.

Cluster housing-
Detached group of houses which share common open space.

Commission –
A proportion (usually a percentage) of the sale price of a property paid to a real estate agent for negotiating a real estate transaction.

Common Property –
Areas of a building, land or amenities within a strata title property that are shared by all owners, e.g. a driveway.

Commercial Property –
Property intended for use by all types of retail and wholesale stores, office buildings, hotels and service establishments.

Common Area –
In multi-unit dwellings, the total area, including access space that may be used by tenants of two or more flats or units.

Conditional Offer-
An offer to buy a property, subject to something else happening – such as obtaining loan approval.

Contract of Sale-
Legal document containing the full details and terms and conditions of sale.

Conveyance
An instrument (i.e. document) which transfers property or a right in property from one person to another.

Conveyancer
A professional person who attends to the legal aspects of buying or selling property.

Cooling-Off Period-
The period after contracts have been signed and exchanged – generally 5 business days – during which time buyers can withdraw from the purchase. Begins the next day after contracts have exchanged and excludes public holidays

Cooling-off Period Extension-
The buyer may request an extension to the normal 5-day period, but this has to be agreed to by the seller. E.g. If a buyer is waiting for the loan to be finalised with their lender

Completion date-
When the buyer can move into the property they are buying. Also called settlement time or settlement date.

Cornice-
The top course or ornamental crowning member of a wall located between ceiling and wall.

Counter Offer-
A new offer as to price, terms and conditions, made, in reply to a prior offer that has not been unaccepted. Normally the counter offer overrides all previous offers made.

Covenant-
In real property law, the term real covenants is used for conditions tied to the use of land. A “covenant running with the land

also called a covenant appurtenant, imposes duties or restrictions upon the use of that land regardless of the owner. Covenants for title are covenants which come with a deed or title to the property, in which the guarantor of the title makes certain guarantees to the guarantee.

Crown Land-
Land which is government owned.

Cul-de-sac-
An access street with a blind end in the form of a turning space for vehicles.

 


D

Deed-
A legal document conveying title to a property.

Deposit –
A percentage of the purchase price given to bind the sale of real estate.

DP or Deposited Plan-
A plan of land deposited in LPI, which was not attached to a or deed nor lodged for the purposes of a strata scheme. The Registrar General may, for convenience, number or re-number other plans as deposited plans or prepare deposited plans of his own motion.

Depreciation –
A decrease in price or value.

Developer –
A person who attempts to put land to its highest and best use by the construction of improvements upon it. One who, for profit, subdivides land into building allotments.

Duplex-
A type of building construction where two dwellings are attached to each other by a common wall.

Dual Occupancy –
A block of land which is zoned so that two distinct dwellings are permitted to be constructed.


 E

Easement –
A right that someone has to use the land belonging to another, e.g. a water authority may have a sewerage easement across part of your property.

Eaves –
The lower or outer edge of a roof which projects over the side walls of a structure.

Encroachment
An unlawful gaining upon the possession of a neighbour. An encroachment is usually in the form of a fence, or portion of a building, erected by one person upon land of his neighbour.

Encumbrance –
An impediment to use or transfer of the property in the form of an interest or right in the property, e.g. easement, mortgage or caveat.

Equity –
The amount of an asset actually owned. Equity is the difference between the market value of the property and the amount still owed on its mortgage.

Estate Agent-
One who deals on behalf of clients in negotiating the sale, purchase or leasing of land and buildings, in arranging mortgages, and in advising on market values and other aspects of property.

Evaluation-
To find, or fix the value; to estimate.

Exchange-
After a buyer and seller sign their identical copy of the contact, the agent or solicitor dates them both. They then simply swap their signed copy. The buyer’s signed contract is given to the seller’s solicitor and the seller’s signed copy is given to the buyer’s solicitor.

66W Certificate Exchange-  A contract signed by the buyer, which waives their right toa cooling-off period. The buyer’s solicitor or conveyancer must also sign it.

Exclusions-
Items that are not included with the sale of a property

Exclusive Agreement –
A written contract that gives one real estate agent the exclusive right to sell a property in a specified time period.

Executor-
A man appointed under the terms of a will to execute provisions and dispose of the property as written or implied. (A woman appointed under a will is referred to as executrix)

Extension-
An increase in the length of time or a section forming an addition to a building. e.g. a family room that has been added and attached to an existing part of a property.


 F

Facade-
The exterior face of a house or other building.

Family Room-
An informal living room, usually the centre of family activities.

Fee Simple-
The fullest and highest possible estate one can posses in real estate. Ownership of unlimited duration. Upon the owner’s death, real estate will pass to their heirs.

Fence-
A wall like barrier around an allotment, yard or farm, usually of wood or steel wire or colorbond, but may be of brick or other material.

Final Inspection-
The Buyer’s final inspection of the property prior to settlement taking place. This takes place usually the day before settlement and is the buyer’s last chance to confirm that the property is in the same state as when they agreed to purchase it.

Finance Pre-Approval-
This means having your loan approved in principle by a bank or finance broker. By having Pre-approval, gives you an idea of  how much you can borrow to buy a property.

Finance Approval in Writing-
This is written notification provided to a buyer, advising that their bank or financial institution has agreed to lend them money to purchase a certain property. Sometimes known as unconditional loan approval.

Fibro Cement –
Building material made of compressed fibres cemented into rigid sheets.

Fittings –
Objects that can be removed from a property without causing damage to it. Fixtures – Fixed items that cannot be removed without damaging either the property or the fixture itself, e.g. cupboards.

Fixed floor coverings-
Fixed to the floor – wall to wall carpet, kitchen lino, laminate flooring etc. This term does not cover loose rugs.

Floor Area-
Total horizontal surface of a specific floor, or the total area of all floors in a multi storey building.

Footing-
A flange-like part at the base of the foundation wall which ties or locks the foundation into the ground, preventing shifting or settling. Footings also assist in distributing the load of the superstructure over a greater area.

Forced Sale-
The act of selling real estate, normally by court order. Usually sales like this are made at auction. A forced sale may be as a  result of a breach under a mortgage or unpaid taxes.

Foreclosure-
A legal action instituted by a mortgagee, when a mortgagor defaults, to end all rights and possession of the mortgagor. The asset then becomes the property of the mortgagee.

Forfeit-
The loss of anything of value because of failure to act or otherwise do that which was agreed upon. A purchaser under an unconditional contract of sale may forfeit his deposit if he fails to effect settlement by the due date.

Frame-
(i) In joinery, the name given to the frame around a door or window opening.
(ii) In carpentry, the main timbers of a structure when fitted and joined together.

Frontage-
The distance land or a building extends on a street, where a building faces.


 G

Gazumping-
When an offer has been accepted by the seller and another buyer makes a higher offer, which the seller takes.

Gables –
The triangular part of a building’s end wall which extends up to meet the two slopes of a roof.

Guarantor –
A person who agrees to indemnify the holder of a loan, all or a portion of the unpaid principal balance, in case of default by the borrower.

Gutter-
(i) A channel running the length of the eaves of a building which carries off rain water, usually by means of downpipes.
(ii) The ridge formed by the edge of a street and raised footpath or a depressed ridge in a road’s shoulder which is a control for the flowage of storm water.

 


H

Hectare-
The metric measure for an area of land measuring 10,000 square metres (approximately 2.47 acres)

House-
A single dwelling, usually Torrens Title.

Holding Deposit –
An initial (goodwill) sum of money given to show interest in or bind the sale of real estate before the full deposit is paid. For example, if a property is purchased on Saturday, the agent may take a holding deposit of a few hundred dollars until the buyer can arrange for the full deposit to be paid on Monday.


 I

Improvements-
Anything that is constructed or built on land to increase its original value. e.g. such as a house.

Inclusions-
Items included with the sale of property.

Instruct-
Have someone act for you on their behalf. e.g. solicitor or agent.

Insulation-
A heat-retarding material in outside walls, top flooring ceiling or in roof to prevent passage of heat and cold into or out of the house.

Investor-
A person who invests money into a business, enterprise or real estate with the intention of obtaining a satisfactory financial return on the capital invested.

Interest –
(i) A right, claim or share in some specific property. E.g. real estate.
(ii)  A sum of money paid or agreed to be paid for money lent, calculated in proportion to the amount lent

 


J

Joint Tenancy –
A form of co-ownership that gives each tenant equal shares and rights in the property including the right of survivorship
E.g.Ownership of a property passes to the surviving owners.

Joists-
Horizontal wood structural members to which boards of a floor and the laths of a ceiling are nailed.

Junction Box-
A box in the electrical system where one main circuit is connected to another. Also, the box where the smaller circuits join the main circuit.

 


L

Land Tax –
A tax payable annually based on the value of a property that is not where the owner lives or what is known as their principal place of residence.

Landlord –
A person who rents their property to another (tenant) for a specific time in exchange for the receipt of rent.

Lease –
A written agreement between a landlord and a tenant granting a period of tenancy of a property under specific terms and conditions.

Legal Fees-
Money paid to a solicitor or conveyancer.

Listing –
A written contract between an owner and a real estate agent, authorising the agent to perform services for the principal involving the owner’s property.

Lessee –
A person leasing a property.

Lessor –
The owner of a property that is leased to another person.

Lien –
A legal claim against a property that must be paid off when the property is sold.

Lot –
A portion or piece of land forming part of a subdivision described by reference to a recorded plot or by definite boundaries.

 


M

Managing Agent –
A real estate authorised to manage the business affairs in connection with the property of another.

Market Appraisal –
An opinion of the saleability of a property and its value without carrying out a full scale valuation.

Market Value-
The price that a property may achieve given the market at that time (also known as ‘market price’) and which may be higher or lower than the asking price.  

Moving in Under  Licence- 
When the seller allows the buyer to take legal occupation of their property before settlement has occurred, usually for an agreed fee.

Mortgage-
Property held as security against a loan.

Mortgagee-
The lender who holds the mortgage against a loan.

Mortgagor-
The property owner who takes out the loan.

Multi-Listing-
When property is listed with a number of agents and they share the sale commission.

Mortgage Insurance
A policy that insures the lender against the borrower defaulting on a loan. Most lenders generally require insurance when borrowing more than 80% of the property value.


 N

Negotiation-
The process of discussions between buyer and seller, which are usually handled by the agent.

Negative Gearing –
Where the return on investment is not sufficient to cover the costs on the investment, e.g. property maintenance and interest on the loan.

Nominee –
A person who, in a limited sense, acts for or represents another.

Notice to Vacate-
A notice given to a tenant to vacate the property they are leasing.


 O

Occupancy –
Having possession of property. Physically taking and holding it and residing there as a tenant or owner.

Off-street Parking-
Parking space provided in an area that is not part of a road.

Off the Plan –
To purchase a property before it is completed after having only seen the plans.

Offer-
A price offered from a prospective buyer for the purchase of a certain property at a certain price.

Open Listing –
A type of listing agreement in which more than one real estate agent may be employed to sell the property. The owner pays a commission only to the agent who finds the buyer.

Option-
A right for a consideration to purchase a property on or before a fixed date, on terms previously agreed upon. An option entitles but doesn’t oblige, the person having the option to make the purchase. The owner is bound to sell at a particular price if the prospective purchaser wishes him to be bound, providing that the purchaser makes up his mind within the term of the option.

Order on the Agent-
A letter from the buyer’s solicitor instructing the real estate agent to draw a cheque for outstanding funds due to the seller.

Ownership –
The right to possess and use property to the exclusion of others.

 


P

Passed In –
The highest bid fails to meet the reserve price of a property at an auction and consequently does not sell.

Pest Inspection-
A thorough inspection by a certified Pest Inspector to check for current or prior presence of pests such as termites.

Principal –
(i) The head of a real estate firm
(ii) A party to a transaction, as distinguished to the agent. E.g. a vendor
(iii) The original amount (as of a loan) of the total due and payable at a certain date.

Probate-
The official grant of the court to an executor of the right to deal with property of a deceased person. The executor proves the will and receives a grant of probate.

Probate Duty-
A stamp duty that is payable on a deceased estate.

Property Management-
A division of a real estate office composed of leasing of space, collection of rents, selection of tenants and generally the overall maintaining and managing of real estate properties for clients.

Private Treaty –
The sale of a property, through an estate agent, by negotiation usually with a set asking or advertised price.

Private Sale –
The sale of a property by the owner without the services of a real estate agent.

Promotion-
Advertising the property for sale.

Purchase-
To buy; to acquire by lawful means except by gift or inheritance.To obtain by paying money.

Purchaser (or Buyer)-
The person buying the property.

 


Q

Qualified Buyer –
A buyer who has satisfied a lender that he or she is financially able to qualify for a loan. Qualifying the buyer is one of the primary steps taken by the lender as part of the loan process.

 


R

Real Estate Market-
The buying and selling of real property that creates supply and demand resulting in the setting of market values and prices.

Real Property-
This refers to the interests, benefits and rights inherent in the ownership of the physical real estate. It is the bundle of rights with which the ownership of real estate is endowed.

Recission-
A procedure by which the parties to a contract mutually agree to release each other. A contract may also be rescinded by action of one party against another who fails to meet one or more of the  conditions of the agreement.

Redraw Facility –
A loan where the borrower can make additional payments and then access those funds when required. There may be a minimum redraw amount.

Refinance –
The process of paying off one loan with the proceeds from a new loan using the same property as security.

Release of Deposit-
If the buyer is agreeable, their deposit may be released to the seller prior to settlement taking place. (Usually when a seller needs the funds for a property they are purchasing.)

Rent –
Payment for the use of property.

Requisitions or Requisitions on Title-
Formal requests from the buyer for information, such as details  of the property ownership or title, caveats or conditions or any other issues which need clarification.

Rescission Notice-
Written confirmation that the buyer is pulling out (or ‘rescinding’) from the sale, during the cooling-off period.

Reserve Price –
The minimum price which a seller will accept at auction.

Residence –
The place where one lives; a person’s home.

Retaining Wall-
A wall used to hold back some solid material such has earth.

Rezoning-
The change of land use by the responsible authority or local municipality from one zone to another, e.g. residential to commercial etc.

Right of First Refusal –
A provision in an agreement that gives a party the first opportunity to purchase or lease the property before it is offered for sale or lease to others.

Right of Way –
The right to come and go across land belonging to another person or public.

Roof Pitch –
The slope of the roof.


 S

Seller’s Market –
When the demand for property is more than supply so the advantage shifts to the seller.

Seller (or Vendor)-
The person selling the property.

Semi-detached –
A type of construction where two buildings are attached together by a common wall. E.g. a duplex

Service Fee-
Money paid to professionals for their work, e.g. agent or solicitor.

Settlement –
The sale of a property is finalised by the legal representatives of the vendor (seller) and the purchaser (buyer), mortgage documents come into effect, costs are paid and the new owner takes possession of the property.

Sewerage – 
System of sewage disposal; a pipe or closed channel for carrying away sewage or waste water from premises for sanitary purposes.

Sewerage Line–     
A diagram showing the property and the location of the house- service line, the building and the wastewater.

Sole Agency-
When the seller lists with one agent, but can still sell the property themselves.

Solicitor-
Member of legal profession, qualified to advise clients, and act on their behalf

Solicitor’s Exchange-
The purchaser (buyer) carries out all appropriate inspections and obtains formal loan approval prior to exchange of contracts taking place. When their solicitor exchanges contracts there is no cooling-off-period. The purchaser’s solicitor hands over a section‘66w Certificate’ to the vendor’s (seller’s) solicitor with the full10% deposit. The sale becomes unconditional – which means both buyer and seller are legally bound to proceed with the sale.

Stakeholder-
Person who holds the deposit that the buyer has paid to purchase a property – usually the agent or solicitor.

Stamp Duty –
A State tax on conveyance or transfer of real property calculated on the total value of the property (including chattels). This calculation varies from state to state.

Special Condition –
A condition that must be met before the contract is legally binding. For example, if buying a home the purchaser may specify that the contract is not legally binding until the purchaser has obtained a building inspection.

Square –
A square is a measurement of home area.
One square = 9.3 square metres approximately.

Sub-Division-
Literally a division into parts. The term is generally used in the sense of dividing land into building lots. Before the land can be sold, it must be approved by the council, other statutory authorities and the Land Titles Office.

Survey-
The process of establishing boundaries of a piece of land and may include the gradients, contours, grades and structures on  the land.

 


T

Tenant –
Any person in possession of real property with the owner’s permission.

Tenancy –
The right to occupy a property under agreed terms and conditions.

Title-
This can refer to either the ownership of the property, or the actual documents which provide proof of ownership.

Types of Title-

Old System-
The system of passing title from one person to the next, using a series of documents showing the history of the property and its lawful owner.  

Torrens Title-
The modern method and most common, where each transaction on a property is registered on the ‘Certificate of Title’ with the Land Titles office.

Company Title- 
Usually applies to a block of units owned by a company and run by a board of directors.You purchase shares in the company rather than owning a title or deed.  

Community Title- Where there’s a group of homes, which share things like a driveway and drainage.

Strata Title-
Usually on home units, run by a body corporate. You actually buy the right to occupy designated air space in that complex.

Tenants in Common-
Tenants in Common are one of the ways to hold title, to own property, by two or more individuals. There is no limit to the number of individuals who can hold title to one piece of real estate. A property held by tenants in common can be owned by two owners or 100+ owners.

Townhouse-
A dwelling unit, generally with two or more floors, attached to other units by common walls.

Transfer –
A document registered at the Land Titles Office and noted on the Certificate of Title which verifies the change of ownership of a property.

Trustee –
A fiduciary who holds or controls property for the benefit of another.

Trust Account-
A bank account relating to monies received or held by an agent for or on behalf of any other person, e.g., deposit, rental etc.


 U

Unconditional Exchange/Sale- 
The point when seller and buyer are legally bound to complete the sale.

Unit-
A dwelling that is self contained, attached and forms part of a strata complex. A generic name for a flat or apartment within a complex.

Utilities –
The private or public service facilities such as gas, electricity,telephone, water and sewer that are provided as part of the development of the land.


 V

Vacant possession- 
When the seller is willing to provide an empty or property that is vacant on the day of settlement.

Valuer-
A registered and qualified person who estimates the value of what a property is worth.

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

Vendor (or seller) –
The person selling the property.

Villa-
A single-storey attached dwelling.


 W

Wear and Tear-
The depreciation of an asset (property) due to the effects of everyday use.

Waiver-
The passing-by of an occasion to enforce a legal right, whereby the right to enforce the same is lost. It may be expressed or implied; expressed as a statement that a right is waived; implied, but conduct indicating an intention to abandon the right.

Wall Cavity –
The space between the inner and outer sections of a wall.

Water Closet-
A room equipped with toilet fixtures and facilities.

Weatherboard-
External wall sheeting formed with overlapping pieces of timber.

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

 


Z

Zoning-
Local Government or Planning Authority control of the use of land, such as business, residential, light or heavy industrial etc. As well as regulating the type and density of the improvements upon it.

149 Certificate or Zoning Certificate- 
Section 149 Planning Certificates are issued in accordance with Section 149 of the Environmental Planning and Assessment Act. Section 149 Planning Certificates provide information, including the statutory planning controls that apply to a parcel of land on the date the certificate is issued. There are 2 types of Section 149 Planning Certificates, 149(2) and 149(2) & (5).