Let’s Talk Sales Lingo – 50 Plus Terms Defined

Navigating the real estate market can be daunting, especially with the industry’s many specific terms and jargon. For those looking to buy or sell, it’s crucial to understand the sales lingo that frequently arises in property sales. Below is a guide to some key residential sale terms to help make the process a little easier.

Residential Sales Lingo

Agent
A licensed professional who helps people buy, sell, or rent real estate.

Appraisal
An estimate of a property’s value, usually its market value

Auction
A public sale of property when the highest bidder is normally the successful buyer.

Auctioneer
A person who conducts auctions by accepting bids and declaring goods sold.

Authority to Sell
A legally binding document signed by the seller detailing the agreement between the seller and the agent. Many aspects of the authority to sell, such as commission and advertising costs, are negotiable between the parties.

Break of Contract
The breaking of one or more of the terms or conditions of a contract.

Bridging Finance
A short-term loan (about six to 12 months) used to fill the time gap between buying another property and either selling the one you own or obtaining a long-term loan. This type of borrowing is usually at a higher interest rate.

Building Inspector
A person registered with the Building Practitioners Board (at the Victorian Building Authority) as a building inspector. This person may operate as a private or council building inspector and is qualified to inspect buildings to ensure compliance with the Building Act and building regulations.

Buyer’s Advocate
An estate agent acting solely for the buyer by sourcing suitable properties and representing the buyer throughout the buying process.

Buyer’s Market
An environment in which buyers have an advantage over sellers. This usually happens when demand exceeds supply.

Capital Gain
Profits made from the sale of property.

Caveat
A note on the title that an interest in the land is claimed by a third party.

Certificate of Occupancy
A document issued by a building surveyor stating the building is suitable for occupation. It is not evidence that the building complies with the Building Act or building regulations.

Commercial Property
Property zoned and used as office buildings, shops and retail premises.

Contract of Sale
A legal document prepared by the seller, usually with the aid of a solicitor or a conveyancer, outlining the details of the sale. The contract of sale is legally binding when signed by both parties.

Conveyancer
A person or company licensed to conduct conveyancing business. This means any business where conveyancing work is undertaken for a fee or reward.

Cooling Off Period
A legally mandated time frame that allows a buyer to cancel a contract after signing it. The period is three clear business days, starting the day after the contract is signed. 

Deposit
A percentage of the purchase price paid by the buyer when contracts are signed. It is usually 10 per cent. The deposit must be held in a trust account by an estate agency, by the seller’s solicitor or conveyancer or jointly in a trust account by the seller and buyer.

Disbursements
Additional charges by some solicitors and conveyancers on top of their fee for extras such as postage, phone calls and government charges.

Easement
A right held by one person to make use of the land of another. Drainage and sewerage pipes are examples.

Equity
Having ‘equity in your own house’ refers to the difference between the market value of a property and what is still owing on a mortgage. This will increase as the loan is repaid or as the property’s market value increases.

Fixed Interest Rate
An interest rate that remains unchanged for a set period.

Fixtures
Items that are attached to the property and cannot be removed without causing damage to the property such as bathroom suites, built-in wardrobes and kitchen stoves. They are usually included in the sale.

Goods
In relation to a sale of a property, goods include personal items, chattels and fittings.

Interest Only Loan
Throughout the term of the loan, only the interest is paid off. The loan itself (the principal) is repaid at the end of the time limit of the loan.

Joint Tenants
The form of ownership where two or more people purchase a property in equal shares. If one dies, their share of the property passes to the surviving owner/s. (See also tenants in common)

Land Tax
Calculated on the value of a block of land and payable by the owner/s.

Market Price
The price at which a property can be sold.

Market Value
The estimated price at which the property would sell. 

Mortgage
A written contract giving the lender of finance certain rights over specific property. For example, the house bought by the borrower is used as security for the loan.

Mortgagee
An organisation lending money to a borrower by a mortgage agreement.

Mortgage Guarantee Insurance
Paid by the borrower to protect the lender against failure by the borrower to keep up mortgage repayments or to pay back the loan in full when it is due. Such insurance normally applies where the borrower’s loan exceeds 80 per cent of the value of the property. This type of insurance is taken out by the lender, with the cost passed on to the borrower. The borrower remains liable for any shortfall; for example, if the property is sold and the proceeds do not cover what is owed to the lender.

Net Income
Your income after income tax and mandatory levies have been deducted.

Off The Plan
Purchasing off the plan involves buying a property before it has been built. Such purchases are usually based on the architect’s plans and models.

Outgoings
Any costs incurred by the seller on top of the agent’s commission, such as advertising costs. All outgoings are negotiable.

Owners Corporation
Formerly known as a body corporate. An owners corporation has the collective ownership of the common area in a subdivision of land or buildings. It is responsible for the administration, upkeep and insurance of the common area shared by all the owners (the common property).

Off-Market
A property that is for sale but is not officially advertised.

Passed-In
The circumstance where a property for auction is not sold, usually because it has not reached the seller’s reserve price.

Pre-approval
Is a lender’s agreement to lend a buyer a specific amount of money for a home purchase. It’s also known as conditional approval or approval in principle. 

Principal
A person who manages or owns a real estate agency.

Private Sale
In a private sale, the sale is negotiated between the buyer and seller usually with the assistance of an agent.

Reserve Bank of Australia
Australia’s central bank with responsibility for regulating monetary policy including the official interest rate

Reserve Price
A seller’s minimum sale price for the property. It may be recorded on the authority to sell.

Section 32 Statement 
Information that the seller must provide to the buyer advising of restrictions such as covenants and easements, outgoings such as rates and any other notices such as compulsory acquisition. Also known as a vendor’s statement.

Seller’s Market
Is when there are more people looking to buy homes than there are homes available for sale. 

Settlement
When ownership of a property passes from the seller to the buyer and the balance of the sale price is paid to the seller.

Sold
A property that has been sold and all conditions of the sale contract have been met.

Stamp Duty
A state government tax, based on the sale price of a property, paid by the buyer when property ownership is transferred. Also known as duty.

Strata Title
Each unit in a block or multi-unit complex is individually owned by the resident. In addition, all the owners in the building or complex have shared ownership of the common property, which is managed by an owners corporation.

Tenants in Common
A form of joint ownership of a property when each person owns a share of the property, equally or unequally. On the death of one owner, the deceased’s share passes to their heirs, who assume the role of tenant in common with the other existing owner/s.

Title
A legal document identifying who has a right to the ownership of a property.

Trust Account
Is a bank account used to hold money for clients in real estate transactions. Trust accounts are also known as escrow accounts. 

Unconditional Offer
A sales agreement with no conditions, meaning the buyer and seller are legally obligated to complete the sale.

Under Contract
A seller has accepted an offer on a property, but the sale is not yet final.

Valuation
An estimate of the value of a property by a registered valuer, usually for a fee.

Vendor
The person selling the property.

Vendor’s Statement 
Information that the seller must provide to the buyer advising of restrictions such as covenants and easements, outgoings such as rates and any other notices such as compulsory acquisition. Also known as a Section 32 statement.

Zoning
The permissible uses of an area of land as stipulated by the council.

Understanding these fundamental residential sales lingo can significantly enhance your experience. Whether buying or selling, taking the time to familiarise yourself with these definitions will empower you. Always consult with legal and real estate professionals when navigating property transactions to ensure you fully know your rights and obligations. Happy house hunting!

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