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Tuesday 06 Nov 2018

Amortisation Period – the number of years it will take to fully pay off a home loan.

Appreciation – A specific increase in the value of a property over a given time

Auction – the public sale of a property where interested buyers meet at a specific place and time to bid for the property.

Bank Valuation – A bank’s estimation of a property’s value.

Bridging Finance – A shorter termed loan that enables buyers to purchase a new property whilst waiting on the proceeds of a property sold to clear.

Capital Gains – The difference between the purchase price and the selling price of a property.

Capital Gains Tax – The tax levied on profit from the sale of an investment property.

Capital Growth – The actual increase in the value of a property

Caveat – An announcement on the title declaring that a party other than the owner may have an interest in the property.

Caveat Emptor – Is Latin for “buyer beware”, a notification in the property transaction that informs the purchaser that they carry the risk.

Comparison Rate – An indicative interest rate that enables the identification of accurate costs associated with setting up the loan.

Conveyancing – Is the legal process for the transfer of ownership of real estate.

Counter Offer – A new offer, made after a previous offer has been rejected.

Depreciation – A reduction in the value of an asset over time.

Disbursements – Costs that a real estate agent has incurred to which can be passed onward to the client E.g. Marketing costs.

Equity – The difference between the debt owed and the value of a property.

Exchange Of Contracts – The legal process that creates a binding agreement for the sale of a property.

Exclusive Listing – Where the seller has signed an agreement for the agent to solely be responsible for the sale of the property during a specific period.

Fittings – The items in a property to which can be taken out without damaging the space.

Fixtures – The items in a property that are built-in and cannot be removed.

Gross Rental Yield – An equation that is used to compare rental returns.

Guarantor – A person who agrees to fulfil a contract should the main party of the loan default.

Interest – The amount paid by a borrower to a lender in addition to the principal amount borrowed.

Investment Return – The combination of capital growth and the net income from the property ownership.

Lenders Mortgage Insurance – often referred to as LMI, is normally payable when a borrower doesn’t have the amount needed for a deposit.

Median Price – The median price is the middle point for a range of property values.

Negative Gearing – When the earnings from an investment property are – in the short term – less than the cost associated with the investment.

Offset Account – In a mortgage offset account or home loan offset account, the credit within the account is offset daily against the home loan balance, normally reducing the interest charged. For more specific information regarding this speak to your home loan expert.

Private Sale/Treaty – This is the process where you determine the sale of your property and buyers put offers forward ot purchase it.

Reserve Price – The lowest price a vendor will accept.

Settlement – Occurs when the balance of the purchase price has been paid to the seller. The buyer then receives the keys to the property and becomes the legal owner.

Settlement Date – The date on which the property is set to be finalised.

Stamp Duty – Tax levied on a contract, calculated as a percentage of the contract value.

Strata Title – A form of ownership created for multi-level apartment blocks and horizontal subdivisions with shared areas.

Tender – The formal sales process which requires interested buyers to submit proposals, bids and offers.

Title – The ownership of a property.

Trust Account – A bank account managed by a real estate where funds such as deposits are held on behalf of someone else.

Vacancy Rate – Refers to the number of unoccupied rental properties in a market.

Yield – The annual rental income of an investment property, expressed as a proportion of the property’s value.

Zoning – Used by local governments to determine how land is going to be used.



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