Buying or selling a home can feel like learning a new language, but we’re here to help you get fluent. This glossary breaks down the most common real estate terms into simple, easy-to-understand language. Think of it as your personal dictionary for a smooth and stress-free property journey.
Adjustment: This is the process of fairly dividing property-related expenses, like water and council rates, between the seller and the buyer on the settlement date.
Agreement: A legally binding written contract between the seller and the buyer for the sale and purchase of a property.
Allotment: A smaller piece of land (a lot, block, or section) that has been divided from a larger area.
Appraisal: A real estate agent’s written estimate of a property’s value, based on recent comparable sales in the area.
Appreciation: The increase in a property’s value over time due to market changes like supply and demand or inflation.
Asset: Any item of monetary value that is owned by a person or business.
Auction: A public sale where a property is sold to the highest bidder once a m inimum vendor-set price (the reserve) is met. This method is often used to get the best possible price on a property.
Body Corporate: A legal committee made up of all the owners within a strata-titled property (like an apartment complex). They are responsible for the upkeep and maintenance of the common areas.
Bridging Finance / Bridging Loan: A short-term loan (often at a higher interest rate) that helps a buyer purchase a new property while they are still waiting for their current property to sell.
Building Regulations: Rules set by local councils to control the quality and safety of buildings under construction or renovation.
Buyer’s Market: A market condition where there are more properties available than there are buyers. This gives buyers more power to negotiate on price.
Capital: The money or property you use to invest in something, like an income-generating property.
Capital Gain: The profit you make when you sell your property for more than you originally paid for it.
Cash-Out Clause: A clause in a contract that forces a conditional offer to become unconditional within a set time, should the seller receive a cash offer from another buyer.
Caveat: A document lodged at the Titles Office by someone with a legal interest in a property to prevent it from being sold without their knowledge.
Certificate of Title: A legal document that proves ownership of a property, including a description of the property and any registered ownership details or interests.
Chattels: Non-fixed items that are included in the sale of a home. This can include carpets, curtains, blinds, the stove, or light fittings, but only if they are specifically listed in the sale agreement.
Commission / Service Fee: The fee (usually a percentage of the sale price) that a property seller pays to a real estate agent for their services.
Common Property: Areas of a property that are shared by all owners in a strata title or unit title, such as driveways, gardens, or stairwells.
Conditions: The terms that must be met or satisfied before a property sale can be finalized. Common conditions include a building inspection or finance approval.
Conditional Agreement: A legally binding contract that is subject to certain conditions being met before the sale can be finalized.
Contract of Sale: A written legal agreement that states all the terms and conditions of a property sale.
Conveyancing: The legal process of transferring ownership of a property from one party to another.
Cross Lease: A form of land ownership where multiple homes are built on one piece of land. The land is owned collectively by all the residents, and each resident leases, and has exclusive use of, a specific area.
Covenant: Terms and restrictions written into a property’s title that can affect the future use or sale of the land. For example, a covenant may prevent you from building a second dwelling or a specific type of fence.
Deed: A legal document that officially transfers the title of a property from one owner to another.
Deposit: A percentage of the purchase price that is paid in advance and held in trust to secure the property sale.
Depreciation: A decline in the value of a property over time due to a change in the market.
Drawdown: The final payment of the loan proceeds from the buyer’s bank to the seller on settlement day.
Easement: A legal right that gives another person or entity (like a local council) the right to use a specific part of your property, for example, for a sewerage or water line.
Equity: The portion of a property that you actually own. It’s the difference between the property’s market value and the amount you still owe on your mortgage.
Escape Clause: A clause in a contract that allows the seller to accept another offer, forcing the current buyer to either fulfill their conditions immediately or terminate the contract.
Exclusive Agency / Sole Agency: A contract that gives a single real estate agent the exclusive right to sell a property for a set period of time.
Fixed Rate Mortgage: A home loan where the interest rate stays the same for a set period, giving you stable repayments.
Fixtures: Items that are permanently attached to the property and cannot be removed without causing considerable damage, such as built-in cupboards or shelves.
Freehold: A type of ownership where you own both the house and the land it sits on indefinitely. This is also known as Fee Simple.
Gross Income: Your total income before any taxes or other deductions are taken out.
Guarantor: A person who agrees to guarantee a loan for someone else. If the borrower defaults, the guarantor becomes legally obligated to repay the debt.
Habitable: A property that is suitable for people to live in and complies with all local building codes and safety regulations.
Interest Only Loan: A loan where you only pay the interest on the principal amount for a set period, with the principal being paid at the end of the term.
Investment Property: A property that is not occupied by the owner, but instead is used to generate a return through letting or leasing it to tenants.
Joint Tenancy: A form of ownership where two or more people own a property wholly and equally. If one owner passes away, their share automatically goes to the surviving owner(s).
Land Information Memorandum (LIM): A report from the local council that provides everything they know about a property, including any drainage issues, permits, or rates owing.
Lease: A legal, written agreement that gives a tenant the right to occupy a property for a set period of time.
Leasehold: The right to own a home but lease the land it sits on for a specific period of time. You pay rent to the landlord for the land.
Liabilities: A list of all the outstanding debts that a person or business owes.
Liquid Asset: A cash asset, or an asset that can be easily and quickly converted into cash.
Listing: A written contract between a property owner and a real estate agent, giving the agent permission to market the property for sale.
Loan: A sum of money that is borrowed and is generally repaid with interest over a set period of time.
Market Value: The price at which a seller is happy to sell a property and a buyer is willing to buy it. An appraisal aims to determine this value.
Median Sale Price: The middle sale price in a specific area, after all recent sales are ranked from lowest to highest. It’s a key indicator of market performance.
Maturity Date: The date on which a home loan agreement becomes due and payable, or the date it is set to be renewed.
Mortgage: A legal agreement on the terms of a loan used to buy real estate, where the property itself acts as security for the loan.
Mortgagee: The person or entity (the lender) who loans the money in a mortgage agreement.
Mortgagor: The person or entity (the borrower) who receives the money in a mortgage agreement.
MREINZ: Member Real Estate Institute of New Zealand. This institute provides training and sets the standards under which all agents in New Zealand are expected to operate.
Negotiation: The process of attempting to reach a mutually agreeable contract between two parties after an initial offer is made.
Off the Plan: The process of purchasing a property before it has been built, based only on the architectural plans.
Offer: A legal agreement which offers a specific price for a property. It may be conditional (subject to certain terms) or firm (unconditional).
Option to Buy: A legal agreement that gives a buyer the right to purchase a property at a specific price and time. A fee is usually paid and is non-refundable if the buyer doesn’t complete the transaction.
Passed In: When the highest bid for a property at auction fails to reach the vendor’s reserve price, and the property therefore does not sell.
POA: An abbreviation for “Price on Application.” This means the vendor has not set a public price and a potential buyer must contact the agent for details.
Pre-Qualification: The process of determining how much money you are eligible to borrow before you formally apply for a home loan.
Principal: The total amount of money borrowed for a property purchase, or the amount that still remains to be paid on the loan.
Private Sale: When a seller deals directly with a buyer, without the use of a real estate agent. The seller takes on all responsibility for the sale and legal matters.
Private Treaty Sale: The sale of a property through a real estate agent, using a process of private negotiation rather than an auction.
Real Estate Agent / Consultant: A licensed professional who negotiates real estate transactions on behalf of a property owner.
Requisition of Title: A request made by the buyer to the seller for additional information about the property’s title.
Reserve Price: The minimum price that a seller will accept for their property at an auction.
Sale and Purchase Agreement: A legally binding contract between the buyer and seller that sets out all the agreed terms and conditions for a property sale.
Seller’s Market: A market condition where the demand for property is greater than the supply. This is a beneficial time for sellers as they have more power in negotiations.
Semi-Detached: A type of construction where two separate buildings are attached by a single, shared common wall.
Settlement: The final step in a property transaction. This is when the legal representatives of both parties finalize the sale, and the new owner receives the keys to the property.
Sole Agency / Exclusive Agency: A written contract that gives a single real estate agent the exclusive right to sell a property for a set period of time.
Strata Title / Unit Title: A form of ownership most common for flats and units. It gives you ownership of a specific unit and a shared interest in any common land and areas.
Subdivision: A large area of land that has been divided into smaller, individual lots for a housing development.
Survey: A detailed map or diagram showing the precise legal boundaries of a property, including the location of all buildings and other features.
Tenancy: The right to occupy a property under terms and conditions agreed upon by the tenant and the property owner.
Tenant: A person who is legally permitted to occupy a property under a tenancy agreement.
Tender: A process where prospective buyers submit their best offers confidentially and in writing by a set deadline. The vendor then chooses the most favorable offer without disclosing the amounts to other buyers.
Term: The total length of time for a home loan.
Title: A legal document that proves a person’s right to or ownership of a property.
Title Search: The process of checking the title records to ensure the seller has the legal right to sell the property and that there are no other claims or caveats against it.
Transfer: A legal document that records a change of ownership for a property.
Unconditional Agreement: A legal contract that binds both the buyer and seller to a mutually agreed upon settlement price and date. All conditions have already been met.
Unencumbered: A property that is completely free of any mortgages, caveats, or other legal restrictions.
Utilities: Services provided as part of the land’s development, such as gas, electricity, water, and sewerage.
Valuation: A written report, prepared by a qualified valuer, that provides an official estimate of a property’s value.
Variable Rate Loan: A loan where the interest rate changes over time, based on the money market. This means your repayments can go up or down.
Vendor: The person who is legally authorized to sell a property.
Zoning: Guidelines from the local authority that control the permitted use of a specific land area, such as residential, commercial, or industrial.