Do you know your Amortisation Period from your chattels? Or how about Caveat Emptor?
Every industry has its own terminology and lingo – and the property industry is no different. For the first time buyer, or property investor, some of the terms can take a bit of getting used to. We admit, the above examples are pretty extreme because most people know about mortgages (an Amortisation period is the length of time it takes to pay off your mortgage) and we usually refer to the owner’s belongs (such as furniture) rather than chattels.
Also usually use the phrase ‘buyer beware’ rather than the Latin Caveat Emptor.
Whether you’re looking to invest in property in the Newcastle area, or you’re after a new home in Cardiff, here is some property lingo explained:
ABSENTEE LANDLORD – An owner or sub-lessor who does not reside in the place or area in which he/she owns real estate from which he/she derives rental income.
APPRECIATION – An increase in value.
AUCTION AGENCY AGREEMENT – An agreement that the vendor must sign when a property is listed for auction. Details the reserve price and the costs of the auction, including advertising and the agent’s commission. Usually includes a condition that one agent will have the exclusive right to sell the property for a period during and after the auction. (See our top tips for buying at auction)
BUILDING LINE – The setback from the site boundary required by statutory authorities for buildings.
CERTIFICATE OF TITLE – A document issued under the Torrens System of Title, showing ownership and interest in a parcel of land.
COMPOUND INTEREST – Where interest is calculated on a sum that includes previous interest payments.
COOLING OFF PERIOD – A short statutory period after the contract is made, during which the purchaser may cancel the contract unconditionally. Usually does not apply in the case of auctions.
EASEMENT – A right to use the land of another (not involving the taking of any part of the natural produce of that land, or any part of its soil) or a right to prevent the owner of that land from using that land in a particular manner. Most commonly used where Government authorities have the right to run, for example, electrical mains or drainage through private property. Some form of compensation may be payable.
EFFECTIVE AGE – The age of an item, such as a building, as indicated by its physical condition and utility compared to its useful life, in contrast to its chronological age. The amount of maintenance and care given to the building will help determine its effective age. A 5-year old building may have an effective age of 10 years due to poor maintenance of the building.
EGRESS – The exit point from a property.
GEARING – See our article on Gearing
GUARANTOR – A person who undertakes to fulfil a contract if the main party defaults.
DEPOSIT – An amount given by a buyer to the estate agent acting for the seller. It shows the buyer’s serious commitment to the property and is commonly 10% of the purchase price.
LEASE TERM – The period of the lease.
NOTICE TO QUIT – A legal notice served on tenants requiring them to vacate real estate due to a breach of lease terms.
RIGHT OF ENTRY – Where a landlord may inspect the premises, provided reasonable notice is given to the tenant.
SETTLEMENT – This is the final stage of the sale when the purchaser completes the payment of the contract price to the vendor and takes legal possession of the property.
To see more property terms explained, you can download the list compiled by the Real Estate Institute of Australia (REIA)’s property glossary list: https://reia.asn.au/consumers/glossary-of-terms/
We always aim to explain everything in plain English, so don’t be afraid to ask if you don’t understand something. We’d love to see you in our office or hear from you on 02 4954 8833 to answer your questions and help you with your property needs.
* Taken from the list compiled by the Real Estate Institute of Australia (REIA). The REIA is the national professional association for Australia’s real estate sector. It is a politically non-aligned organisation that provides research and well-informed advice to the Federal Government, Opposition, professional members of the real estate sector, media and the public on a range of issues affecting the property market.