Useful Real Estate Terminology

A quick guide below of terminology used by Real Estate Agents 

Real Estate Terminology Explained

Acceptance: An acceptance of an offer according to its terms which usually leads to a binding agreement or contract.

Acreage: Usually 4,000 to 8,000 m2 (1-2 acre) property with town water and on-site waste treatment, such as a Biocycle or Talex system.

Agent: A person authorised to act on behalf of a client in the sale, purchase, letting or management of real estate. All real estate agents must be licensed.

Appreciation: The increase in the value of real estate caused by supply and demand.

Architrave: A moulding surrounding a door or window opening.

Auction: A public sale in which property is offered for sale through a competitive bidding process.

Bearer: A sub-floor timber or steel beam that supports floor joists.

Body Corporate: A group of owners in a block of units. The council of the body corporate – elected by property owners in the block – meets at regular intervals to discuss various matters of administration, including repairs, maintenance and security.

Boundary: A line separating adjoining properties.

Breach of contract: Breaking the conditions of a contract, usually has financial penalties.

Brick Veneer: The most common building method on the Gold Coast; a timber frame supports the roof and an outer brick wall provides protection from weather.

Bridging Finance: Finance that is obtained for a short period of time as a ‘bridge’ to long term finance. This funding may be required if a home purchase completes before the owner’s sale.

Building Regulations: Rules which are designed to maintain public safety, health and minimum acceptable standards of construction.

Caveat: Warns a person buying real estate that a third party has some right or interest in the property.

Caveat Emptor: This principle of law requires that the buyer is satisfied with the property they wish to buy before completing the transaction.

Certificate of Title: A document that confirms the ownership of land. It shows who owns it and whether there are any outstanding mortgages or loans against it.

Chattels: Property other than real estate that is included in a sale, including items of furniture.

Clear Title: A title that isn’t encumbered with outstanding mortgages or loans.

Commission: A fee or payment made to a real estate agent on completion of the sale of a property.

Common Area: A shared area that is available for use by more than one person, which might include the stairwell of an apartment block.

Consumer Protection Laws:  The Competition and Consumer Act 2010 prescribes the way real estate agents can interact with customers and clients. It replaces the old Trade Practices Act 1974.

Contract of Sale: A document that lists the terms and conditions of a property sale between the vendor and the purchaser.

Conveyance: The legal process of transferring the ownership of property from the seller’s name to the purchaser’s name.

Covenant: A requirement noted on the title of a property that forces the property’s owner to adhere to named terms, conditions and restrictions regarding the property.

Deed: A legal document that is a record of an agreement, obligation or conveyance of property.

Deposit: The sum of money normally paid by the buyer when they sign a contract and held in the real estate agent’s trust account. It is typically between five and ten percent of the final purchase price.

Dual occupancy or Dual living: A dwelling that has two separate living arrangements.

Duplex: A residential property with two apartments, both of which have separate entrances.

Fittings: Goods or articles that can be removed from a property without causing damage or an obvious reduction in its value. Fittings aren’t usually included with a sale, eg. furniture, lampshades, ride on mower.

Fixtures: Items that form part of the property and cannot be removed without causing damage. Fixtures usually remain with a property upon sale, eg. bath, air conditioner.

Free Standing: A property that stands independently of others.

Gazumping: The withdrawal from a verbally agreed sale by the vendor in favour of a quicker or more profitable sale. Common in NSW but unlikely to happen in Queensland.

Interest only loans: The principal is not repaid until the end of the loan. Usually limited to five years.

Joint Tenants: Joint tenancy is the holding of property in equal shares by two or more persons.

Land Tax: A State government tax payable by owners of property based on the unimproved capital value of the property.

Listing Agreement: Form 6 in Queensland. A contract between a property owner and a real estate agent that sets out the terms, conditions and commission for the sale of a property.

Mortgage: A legal document that gives a lender an interest over a property to secure the repayment of a loan.

Mortgagee: An entity that lends money on the security of a mortgage. A mortgagee sale occurs when a bank takes over the property to recover money that is owing.

Mortgagor: An entity that borrows money offering the security of a mortgage.

Option to buy: A legal document giving a person a right to buy according to an option price and predetermined terms and conditions. Sometimes used for development sites.

Principal and interest loan: A loan whereby the lender repays a combination of interest and the principal borrowed throughout the term of the loan.

Private Treaty Sale: Sale of property through a real estate agent on the open market. Not an auction sale.

Property Management: The management of a property on behalf of the owner, including finding a suitable tenant, collecting rent, doing inspections every three months, organising maintenance, and paying the owner.

Rates: The amount charged by the local council or water authority to provide services to a property.

Reserve Price: This is the minimum price a seller will accept to sell their property at auction.

Search: The process of investigating title to land in order to ascertain if the vendor has the right to transfer ownership.

Settlement: When the sale of a property is legally finalised.

 

Skirting board:  a narrow length of wood which goes along the bottom of a wall in a room and makes a border between the walls and the floor.

Stamp Duty: A government tax administered by individual states. It is calculated according to the sale value on the contract of sale.

Strata Title: A system of title that allows the owner of a property to have separate title for that specific part of the complex. Can apply to apartments, duplexes and houses in a gated community.

Survey: Shows the dimensions and boundaries of land and the exact location of buildings.

Tenancy: The right to occupy land or buildings as provided by the terms of a lease or other agreement.

Tenants in Common: The holding of property by two or more owners.

Torrens Title: The name of the government system of recording ownership of land.

Townhouse: Two-storey attached dwellings usually registered under a strata title.

Transfer: A document registered at the Land Title Office recording the change of ownership to a property.

Unencumbered: Usually describes a property free of secured loans and mortgages.

Valuation: A written opinion of a property’s value – usually by a real estate agent.

Vendor: A legal property owner who offers the property for sale.

Villa: Single-storey dwelling usually registered under strata or community title.

Zoning: Description of the allowable uses of land, as set out by Gold Coast City Council.