Glossary: Real estate terms

Acceptance
The agreement of the terms and conditions of the offer by the person receiving the offer.

Administrator
The person to administer the estate of a person who died without a will (intestate). Appointed by a Probate court.

Appreciation
The increase in the value of a property over time.

Architrave
The moulding above and around windows and doors.

Asking Price
The price of a property that a owner may be willing to negotiate at.

Assignment
The transfer of property from one person to another.

Assignment of Lease
The transfer of the interest of a tenant to another.

Auction
The selling of any property in public by a licensed auctioneer endeavoring to persuade buyers to make offers until it is knocked down to the highest bidder.

Beam
A principal load-supporting member of a building; can be timber, steel or concrete.

Bearer
Timber that carries the floor joists.

Beneficiary
The person receiving the income from the trust, deed of trust or estate.

Body Corporate
The administrative body made up of the registered proprietors of the units that handle administration and upkeep of the property.

Bond
A sum of money paid by tenants as an assurance that they will not breach the term and conditions of the tenancy.

Brick Veneer
A construction type in which a single brick external wall is tied to the timber frame.

Capital Gain
The increase in the value of property.

Capital Improvement
An addition that is built as a permanent improvement to add value to the property.

Carport
An open or semi-enclosed roofed structure for sheltering cars.

Caveat
It is a warning on the title that a third party has some right or interest in the land.

Caveat Emptor
“Let the buyer beware”. It is up to the buyer to satisfy any specific items and make their own enquiries before purchasing.

Certificate of Occupancy
A document that permits the building to be occupied that is issued by local government to the developer.

Certificate of Title
The document of title to land held under the Torrens System. One is kept in the Titles Office and the other is held by the registered proprietor.

Chattels
Personal property that is movable that can be included in the sale.

Common Property
Land considered as the property of the public in which all persons enjoy equal rights.

Contract Note (Vic. Only)
The agreement that sets out in writing the terms and conditions of the offer to buy the property.

Cooling Off Period
Refers to the time during which a buyer can terminate the contract. This differs from state to state and in Western Australia there is no cooling off period at all. It was introduced to allow buyers to quickly make an offer and secure the property before seeking legal advice, financial approval or undertaking a professional property inspection.

Covenant
Restrictions placed on the title; these invariably can affect future plans with the property.

Cul De Sac
A street with only one way in or out sometimes referred to as a court.

Deposit
A percentage of the purchase price as part of the terms and conditions of the sale.

Depreciation
Due to usage and wear and tear the reduction in the value of an asset.

Dual Occupancy
A single residential site split or shared with two dwellings.

Easement
An area of land reserved by law for a specific purpose i.e. water sewer.

Encumbrance
An impediment to the use or transfer of the property in the form of an interest or right in the property.

Eviction
The removal of a tenant or occupant legally from a property.

Exclusive Authority
The contract giving the real estate agent the authority to sell your property.

Executor
The person named in the will to handle and administer the estate.

Extension
An addition to a building to increase the size of the floor area.

Fee Simple
The representation of the greatest interest in land that can be enjoyed.

Fibro Cement
Building material made of asbestos fibres that are cement bound into sheets.

Fittings
Objects not intended to be removed from the property when selling.

Fixtures
Something tangible that is attached or fixed to the building so it becomes part of the structure.

Foreclosure
The legal process involved in selling the property by auction to settle the mortgage debt. This is due to the borrower defaulting on payments.

Freehold
The owner owns the land and dwelling until they choose to sell it.

Gable
The triangular portion of a wall between the lines of two sloped roofs.

Gazumping
Occurs when a seller accepts a higher offer after agreeing to a sale with someone else before exchanging contracts.

Gearing
Borrowing funds to invest.

Guarantor
A party who agrees to repay a loan using their own assets in case the borrower defaults.
Investment Property
A property that is produced to income and not owner occupied.

Joint Tenancy
Joint ownership by two or more persons that includes the right of survivorship.

Key Tenant
The major tenant in an office building or shopping centre.

Land Tax
A state tax based on the value of the property, paid by the owner but doesn’t include the principal place of residence.

Landlord
The property owner who leases it to another.

Lease
The agreement between a tenant and the landlord that outlines the terms of the tenancy.

Lessee
The person leasing the property.

Lessor
The owner of the property who leases out that property.

Lien
The legal claim upon a property that is paid off when the property is sold.

Market Value
The price at which a buyer is willing to buy and a seller is willing to accept.

Mortgage
The document that gives security for payment of debt over a property.

Mortgagee
The lender.

Mortgagor
The borrower.

Negative Gearing
Is when an investment property is purchased with borrowed funds and the rental income is less than the interest charged over the course of the year.

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

Notice to Quit
A notice to a tenant advising them to vacate the property.

Off the Plan
Purchasing a property before completion and from a plan.

Offer
The price conveyed by one party to another to form a contract.

Open Listing
A property in which multiple real estate agents are employed to sell. Commission is paid to the agent who finds the buyer.

Passed In
Is when the highest bid at an auction fails to meet the selling price the seller has set.
Power of Attorney
The person who has the capacity or authority of another party to act on their behalf.

Private Sale
The owner selling the property without an estate agent.

Private Treaty Sale
The owner selling the property utilising the services of an estate agent.

Property Management
The act of managing the property on behalf of its owner including collecting the rent and finding the tenant.

Rafters
The beams supporting the roof system.
Requisitions on Title
The requests made from a buyer for additional information about the title of the property from the seller.

Reserve Price
The price at which the owner of a property is prepared to sell at auction.

Right of Way
The right to cross another property or for the general public to cross another’s property.

Rise and Fall Clause
The building contract clause that allows for the final price to be increased or decreased according to material prices or wages fluctuations.

Roof Pitch
The angle at which the roof slopes.

Sash
The frame that holds the glass panes in the window.

Sellers Market
When demand for property outstrips supply and as a result prices move upwards.

Semi Detached
Two properties that share a common wall or walls.

Settlement Date
The date when the new assumes possession after finalising payment.

Shingles
Small rectangular shaped pieces of timber used instead of concrete tiles on roofs.

Skillion
A roof sloping in the one direction not attached to another roof surface.

Special Condition
Conditions specified by the purchaser must be met before the contract can become legally binding i.e. the contract can be made subject to the purchaser getting finance.

Stamp Duty
The State Government tax on the purchase price payable at time of settlement by the purchaser.

Strata Title
A title used for units and townhouses. It gives the owner ownership of a defined part of the building including air space as well as membership to the owners’ corporation.

Stratum Title
Different to a strata title in that the owner purchases a shareholding in the company that manages the common area. Lenders sometimes can be reluctant to lend more than 80% of the property value.

Studs
The upright framing in the wall of a building.

Subdivision
The act of dividing land into individual lots to develop.

Tenancy
Persons living in a property under agreed terms and conditions on a non-ownership basis.
Tenants in Common
Joint ownership of real estate that may be in equal or unequal shares. Different from Joint Tenancy in that shares don’t automatically pass onto the other owners in the event of death.

Terrace
A row of homes built in a similar style that have common dividing walls.

Title Search
A check on whether the owner has the right to sell and transfer the property.

Torrens Title
Most common form of title to property.

Townhouse
A two storey dwelling attached to similar buildings.

Transfer
Document registered at the Land Titles Office recording entries of change of ownership.

Trustee
Legal term referring to the holder of property on behalf of another.

Underpinning
Support provided for added strength under an existing wall.

Unencumbered
A property free from covenants or any other restriction.

Valuation
The estimated value of a property prepared by a qualified registered valuer.

Vendor
Seller.

Vendor Statement
The legal statement made by the seller setting out certain particulars of the property.

Villa
A dwelling that is single storey and usually attached.

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

Yield
The percentage of the amount earned over the amount invested.

Zoning
The guidelines as to the permitted uses of land by local authorities.