Real Estate Glossary

A

Adjustment: The apportion between buyer and vendor for expenses such as council and water rates

Allotment: A lot or block subdivided from a larger portion of land Amortisation period: The full term of the loan, in other words, the number of years it will take to repay a home loan completely. Maximum amortisation period is usually 25 years

Appraised value: An estimate of the value of the property offered as security for a home loan. This appraisal is for financial lending purposes and may not reflect the actual market value

Assets: What you own

Auction: Sale of a property in public to the highest bidder

B

Breach of contract: Breaking the terms of a contract

Brick veneer: A system of building in which a structural timber frame is tied to a single brick external wall

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 their savings fall below the asking price

Building regulations: Designed to uphold the standards of public safety, health and construction, these regulations are in place and have been formulated by local councils to control the quality of buildings

C

Caveat: Is a document any person with a legal interest in a property can lodge with the titles office to ensure the property is not sold without their knowledge

Caveat emptor: Latin for let the buyer beware. This puts the burden on to the buyer to be satisfied with the property before purchasing

Certificate of title: Legal proof of ownership of a property carrying the owners name and other information

Chattels: Chattels are personal property. There are two types. Real chattels are buildings and fixtures. Personal chattels are clothes, furniture etc

Cluster housing: Detached group of houses which share an open space

Cluster title: Each cluster title holder has a certificate of title which specifies ownership in terms of a particular area for which the owner is responsible, and defines the common property. Unlike a strata title, it does not subdivide airspace

Commission: Fee payable to real estate agent for selling a property by the person authorising the sale. It is usually a percentage of the sale price

Common property: Areas in strata title properties shared by all owners

Company title: This title applies when owners of flats in a block form a company. Each has shares in the company which owns the land and buildings. The owner of the shares is entitled to exclusive occupation of a flat. However, if you want to alter occupancy in any way, you must have the company’s approval to do so. See your solicitor before buying

Contract Note: The first document signed on buying a house is sometimes a contract note, instead of a contract of sale. This document, when signed by both parties, is as legally binding as a contract of sale and the buyer and seller should treat it with the same importance. It must be accompanied by a vendor statement.

D

Deposit: Usually 10 per cent of the purchase price of a property placed in trust as evidence of intention to buy. Non-refundable, after the contract becomes unconditional (i.e. all conditions such as finance, building and pest control have been met), it goes towards the purchase price when the sale goes through

E

Easement: A right held by someone to use land belonging to someone else for a specific purpose. Mains, drains and water pipes are usually covered by an easement

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

Encumbrance: An easement, mortgage, or other liability on a property which impedes its use or transfer

Equity: The difference or charge on a particular property. For example, an easement as described above, or a mortgage

F

Fitments, fittings and fixtures: a) Items such as baths or stoves, b) light and other fittings, and c) kitchen, linen, or storage cupboards or wardrobes. Fittings are not normally included in a contract if they can be removed without causing damage

Flat interest rate: Is calculated on the original amount of the mortgage for the whole term of the loan

Freehold: An owner’s interest in land where the property and the land on which it stands both belong to their owner indefinitely

G

General law title: Old, complicated form of land ownership in the form of a chain of documents. Can be more than 100 years old and of historic interest

I

Interest-only loans: Loan on which interest only is paid periodically and the principle paid at the end of the term

Inventory: List of items included with a property for sale; usually furniture, furnishings and other removable items

Investment: The purchase of an asset, such as real estate, with the ultimate goal of producing capital gain on the resale of the asset

J

Joint tenants: Joint tenancy is the equal holding of property by two or more persons. If one person dies, his/her share passes to the survivor/s

L

Land tax: Value-based levy applied to some property (exemptions include principle place of residence).

Lease: A document granting possession of a property for a given period without conferring ownership. The lease document specifies the terms and conditions of occupancy by the tenant, including period of occupancy, rent payable, etc

Leasehold: The interest in land of a person who owns a lease granted by a freeholder

Liabilities: Your outstanding debts or what you owe

Limited title: Form or torrens title which applies to a property before it has been adequately surveyed