When it’s your first time buying or selling real estate, figuring out what all insider language means can be confusing and leave you feeling on the outside. Here’s a starting point to understanding real estate jargon:
Authority to sell
The official contract detailing an agent’s fees, any advertising costs and giving permission by a vendor to sell a property on their behalf.
A short-term loan which allows the costs of selling one property and buying another to be covered.
This is the time period a buyer has to withdraw from a property sale if they change their mind. Auction sales usually don’t have cooling-off periods, and different states and territories have different regulations around them, some still incurring a fee if the buyer withdraws during this time.
The weathering or ravages over time to a building or fixture that deplete the value of a property. This can be claimed on income tax for investment properties built after July 1985, which requires a quantity surveyor to calculate how much can be claimed.
When the rights of a property owner are violated by a neighbouring building on their land, e.g. an obstruction of view due to a second storey on the neighbour’s house.
The amount left when any money owed is deducted from the accumulative value of a property.
Lenders’ mortgage insurance (LMI)
The cost incurred when borrowing more than 80% of the money to purchase a property. The insurance protects the lender in the case of the property’s value falling, despite it being paid by the borrower.
Making a loss on an investment property by making less on rent than is spent on the expenses, such as mortgage repayments, utilities and up-keep, of owning that property. The loss is then claimed on income tax.
Researches the past and present usage and owner of the title of a property.
Used by local councils or authorising figures. The categorisation of plots of land, according to how the land is deemed authorised to be used e.g. for residential housing or business properties.