Confused about real estate jargon when it comes to buying or selling? Here are important terms you need to know.
It’s easy to be bamboozled by the words and phrases used in the real estate industry when buying or selling a house. We’ve compiled a list of terms to help you understand the “lingo�? used in advertisements and by real estate agents. This list is not exhaustive. We have not included words you will come across in the Contract of Sale or your mortgage documents, as those are best explained by your lawyer and mortgage broker, respectively.
At RPN Global Sales, we will take the time to explain unfamiliar words to you to remove the confusion when buying or selling your home.
If there is a word that has you totally baffled and we have not listed it here, contact us on 0434 056 728 and speak to one of our approachable, friendly agents.
Appreciation: An increase in the value of a property.
Asking price: The listed price of the property. This may not be the final price as the owner may negotiate.
Auction: A public sale where real estate is sold to the highest bidder.
Auctioneer: The person who manages and conducts an auction.
Adjoining: Two pieces of land that have a common boundary.
Amenities: The property’s features that make it desirable to live in, for example, walking distance to a train station.
As is: A property sold “as is�? means it is sold in its current state, with all its existing faults and issues.
Building inspection: An inspection by a licensed builder that checks for defects in the property. It is done at the buyer’s expense.
Buyer’s market: A situation where there are too many properties for sale and not enough people buying property. Buyers will then have the advantage as it drives property prices down.
Buyer’s advocate: A real estate agent who acts solely in the buyer’s interest by sourcing suitable properties and representing the buyer throughout the buying process.
CGT: Capital gains tax. This is a tax payable on profit made from the sale of an investment property (not your home).
Cooling off period: A specified period after signing the contract on a property where you can back out of the sale without attracting penalties.
Conveyancer: A licensed professional who ensures all legal requirements are met in transferring property from one person to another. A conveyancer may also be a solicitor.
Counteroffer: A response given to a proposal that replaces the original offer. Another word for this is negotiation.
Disbursements: Costs incurred by an agent on your behalf. For example, advertising expenses.
Easement: A “right of way�? that allows a person to access your land for a specific purpose. An example is when your neighbour needs to access your driveway to get to their block, where a property has been divided into a front and a rear property.
Exchange of contracts: The point when the buyer and seller have signed their contracts and swapped them, and the buyer has paid a deposit. At this point, both buyer and seller are legally committed to the purchase and sale of a property at an agreed price.
Exclusive listing: When a vendor has signed an agreement to give an agent or agency the right to sell their property.
Expression of interest (EOI): Potential buyers submit their best offer in writing on a property before a specified date. The vendor will then choose the highest offer or decide not to sell their property at all if they don’t get the price they’re after.
Fittings: Objects that are not attached to the property and can be removed without damaging the property, such as carpets and blinds.
Fixtures: Objects that are permanently attached to a property that cannot be removed without causing damage, such as cupboards.
Garden apartments: A low-rise apartment development with plenty of lawn and garden spaces.
Gazumping: Where an agent accepts your offer to buy a property at a specified price but then sells it to someone else at a higher price.
Holding deposit: An amount of money given by a buyer to the real estate agent acting for the seller. It is a sign of the buyer’s serious commitment to buy the property and is refundable if the sale doesn’t go ahead.
Household Insurance: Insurance to protect a homeowner from risks such as theft, weather damage, and fire. As soon as the exchange of contracts happens, the purchaser becomes legally responsible for the house, so household insurance should be taken out at this point.
Joint tenants: A form of co-ownership where two or more people have equal rights over the property.
Lean-to: A small building sharing a wall with a larger building, with the small building leaning against the larger building.
Lease: An agreement between a tenant and the property owner (the landlord), giving the tenant temporary possession (but not ownership) of a property for a set period.
Lessee: The tenant who has the right to temporary possession of a property under an agreement.
Lessor: The property owner who rents out the property.
Listing: A contract between an owner of the property and a real estate agent, giving the agent the right to sell the property and to be paid for their services.
Market value: The amount of money that the buyer is prepared to spend, and the seller is ready to accept to sell the property.
Multiple Listing: A multiple listing agreement is when a seller signs up with an agent, but the property is also advertised by other agents in their network. When the property is sold, the commission is shared between the original agent the seller had an agreement with and the agent who ends up selling the property.
Negative Gearing: An investment property is negatively geared when the income received from the investment property is less than the mortgage repayments and other property costs. This amount is deducted from the taxable income, reducing the total tax bill.
Occupancy permit or occupancy certificate: A document issued by a private or council building surveyor that shows that the building or part of it is suitable for occupation.
Off-market – When a property is for sale but has not been officially advertised. Most off-market purchases are made through buyer’s advocates.
Off the plan: When you buy off the plan, you buy a property that has not been built or is soon to be built.
On-site auction: An auction sale held at the property being sold.
Open listing: An open listing agreement is when multiple agents are responsible for selling the property. The commission for the sale goes only to the agent who sells the property.
Owners corporation: A group made up of the owners of the units or apartments in a strata building.
Parcel: A piece of land.
Passed in: When property at an auction sale is “passed in,�? it means the highest bid doesn’t meet the seller’s expected price, and the property doesn’t sell. The highest bidder will then be asked to negotiate directly with the seller’s real estate agent.
Prefabricated house (prefab): A house that has been constructed elsewhere and installed on the owner’s land.
Private treaty: A property sale where the buyer can negotiate privately with the seller or their agent.
Purchase and leaseback: Where an investor buys a property and allows the seller to remain in the property as a tenant.
Reserve price: The minimum amount that a seller is willing to accept at auction.
Semi-detached: A property that is joined to another house.
Settlement: When the sale of a property is finalised by the legal representatives of the seller and the buyer, and the buyer takes possession of the property.
Siting: The placement and orientation of a house or building on a piece of land.
Stamp duty: A tax you pay when buying a house. The price depends on which state you live in and the cost of the property.
STCA (Subject to council approval): This means the property owner will need council approval before carrying out demolition or renovation.
Strata title: When your property is part of a strata title, it means you own the individual unit or townhouse, as well as the shared or common property such as a driveway, garden, foyer, and lifts.
Survey: The measurement of a property to confirm its boundaries and what improvements have been made to it.
Surveyor: A person qualified to measure and check the land, including formation, slopes, and heights, and create a detailed map of the land.
Title: The type of property ownership, such as Torrens title, strata title, or company title.
Torrens title: This term refers to ownership of property where the property owner owns the land and building on it. With a Torrens title, you are the sole owner of the property, and you secure your ownership by registration of your title with the Land Titles Office. When you buy property under the Torrens title system, the registrar will give you a Certificate of Title showing you as the owner.
Trust account: A bank account managed by the real estate agency where they hold money (such as deposits and rental income) on behalf of someone else.
Turn-key property: A property that is ready to be moved straight into, with no further work required.
Unconditional offer: Where the buyer agrees to enter into a contract to buy the property without conditions, such as building or pest inspection or financing. This occurs in auction sales, where the buyer is expected to take the home they won, regardless of the condition it’s in.
Under offer: When a seller accepts an offer on a property subject to conditions, such as the buyer receiving finance approval.
Vendor: The seller.
Water closet: A room containing a flush toilet.
Without reserve: An auction sale where the property will be sold to the highest bidder, whatever that bid may be.
Yield: The property’s rental income after deducting the property’s costs and expenses. It is expressed as a percentage.
Zoning: Refers to the local council’s guidelines on the permitted use of the property and the type of operations allowed there.
