Real Estate Jargon

Buying or selling property comes with its own language. This plain-English glossary explains common New Zealand real estate terms used during appraisals, marketing, offers, auctions and settlement.

A

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 professional’s market assessment supported by comparable sales and other relevant evidence. It is different from a registered valuation.

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 through competitive bidding. The auctioneer completes the sale when the reserve is met and the property is knocked down to the successful bidder. A property may be passed in if it does not sell.

B

Body Corporate: The collective of owners in a unit title development, responsible for managing common property and meeting the requirements applying to the development.

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: New Zealand building requirements include the Building Act, Building Code and related regulations. Councils administer building consents and inspections; planning and resource-consent rules may also apply.

Buyer’s Market: A market condition in which the number of properties for sale is high relative to buyer demand. Buyers may have more options, but the negotiating position on any property depends on its price, condition, location and level of interest.

C

Capital: The money or property you use to invest in something, like an income-generating property.

Capital Gain: An increase between a property’s purchase price and its sale price. Costs and any tax obligations affect the financial outcome; ask your accountant about your circumstances.

Cash-Out Clause: A contractual provision dealing with another offer while an existing agreement is conditional. Its effect, notice requirements and time limits depend on the wording. Ask your solicitor to explain the actual clause.

Caveat: A notice recorded against a title by someone claiming an interest in the land. It can prevent registration of dealings that affect that claimed interest, subject to the law and its removal or lapse. Obtain legal advice about its effect.

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: Moveable items included in a property sale. Check the sale and purchase agreement for the items included, any excluded fixtures and their agreed condition; do not rely on assumptions about what stays.

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 finalised. 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 finalised.

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 ownership combining a share of the freehold land with a leasehold interest in a particular home and area. The lease and plans describe exclusive and shared areas and may restrict changes; ask your lawyer to check them.

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.

D

Deed: A formal legal document executed as a deed. Deeds can record different rights or obligations; a modern New Zealand property transfer is registered in the land title system.

Deposit: An amount paid towards the purchase price under the sale and purchase agreement. Check the amount, due date and how it will be held with your lawyer; it is different from the deposit a lender requires for a home loan.

Depreciation: A reduction in the value of an asset over time, which can reflect wear, age or other factors. Accounting and tax treatment have specific rules; ask your accountant how they apply.

Drawdown: The release of loan funds by the lender, usually to the buyer’s solicitor for settlement in a property purchase.

E

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 difference between a property’s market value and the amount owing on the mortgage. For example, a $700,000 property with $400,000 owing has $300,000 in equity before selling costs and other liabilities. If the debt exceeds the value, equity is negative.

Escape Clause: A contractual provision that may allow a party to end an agreement in specified circumstances. Do not assume an immediate deadline or automatic right to accept another offer; the exact wording matters.

Exclusive Agency / Sole Agency: A written agreement giving one agency the exclusive right to market and sell the property for the agreed period. Commission may still be payable if the owner sells privately during that period; check the agreement with your lawyer.

F

Fixed Rate Mortgage: A home loan with an interest rate fixed for an agreed period. Repayment amounts and any early repayment charges depend on the loan terms.

Fixtures: Items fixed to a property, such as fitted cupboards. Whether an item is a fixture can depend on how it is attached and its purpose. Check the sale agreement for any items to be excluded and ask your lawyer if unsure.

Freehold: Also called fee simple, ownership of the land and generally the buildings on it, subject to any interests or restrictions affecting the property.

G

Gross Income: Your total income before any taxes or other deductions are taken out.

Guarantor: A person who agrees to guarantee someone else’s borrowing. If the borrower does not meet their obligations, the guarantor may have to pay some or all of the debt, depending on the guarantee. Obtain independent legal advice before signing.

H

Habitable: Suitable for people to live in. The word alone does not confirm that a property has the required consents or meets all applicable standards; have its condition and council records checked.

I

Interest Only Loan: A loan where regular repayments cover interest rather than reducing the amount borrowed for an agreed period. After that, repayments may include principal and interest; check your loan terms with your lender. See Sorted’s guide to mortgage types.

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.

J

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).

L

Land Information Memorandum (LIM): A report from the council containing relevant information it holds about a property. It does not replace a building inspection, title review or advice about information the council does not hold.

Lease: An agreement giving a tenant the right to occupy a property on agreed terms. A tenancy may be fixed-term or periodic; check the agreement and the applicable tenancy rules.

Leasehold: A right to occupy land and buildings for a period under a lease while someone else owns the land. Ground rent, reviews and other rights depend on the lease; in some cases the leaseholder owns the buildings.

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 property offered for sale or rent through an agency. The agency agreement is the separate contract that authorises the agency to market a seller’s property.

Loan: A sum of money that is borrowed and is generally repaid with interest over a set period of time.

M

Market Value: An indication of what a property might sell for in the market at a particular time. An agent’s appraisal uses comparable sales and property information to estimate a likely selling range; it is not a guaranteed sale price. See Settled’s guide to assessing property value.

Median Sale Price: The middle value when sale prices for a defined area and period are ordered. If there is an even number of sales, it is the average of the two middle prices. A median can change with the mix of properties sold, so it does not tell you the value of an individual home.

Maturity Date: The date a loan or a loan period ends. What the borrower must repay or may arrange next depends on the loan agreement and the lender’s terms.

Mortgage: A security interest over property that helps secure a loan. The loan agreement sets out the borrowing terms; the mortgage gives the lender rights if obligations are not met.

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 of the Real Estate Institute of New Zealand. REINZ is a voluntary membership organisation. The Real Estate Authority (REA) is the government regulator of the real estate profession.

N

Negotiation: The process of attempting to reach a mutually agreeable contract between two parties after an initial offer is made.

O

Off the Plan: Buying a property before construction is complete, using the plans, specifications and contract documents to understand what is proposed. Ask your lawyer to review the agreement, timing, changes and other conditions before signing.

Offer: A proposal to buy a property at a stated price and on stated terms. An offer may include conditions. It normally becomes a binding sale and purchase agreement when accepted and signed by both parties; ask your solicitor to explain when you become committed.

Option to Buy: An agreement giving someone a right to buy a property on specified terms within a stated period. Any fee, conditions and consequences depend on the agreement; seek legal advice before signing.

P

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: An initial indication of potential borrowing based on information provided to a lender or adviser. It is not final approval for a particular property; ask the lender what checks and conditions remain.

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: A sale arranged directly by the owner without an agent managing the sale. The seller should engage a lawyer or conveyancer for the agreement and settlement, and check whether an existing or previous agency agreement could still give rise to commission.

Private Treaty Sale: The sale of a property through a real estate agent, using a process of private negotiation rather than an auction.

R

Real Estate Agent / Consultant: A licensed professional who negotiates real estate transactions on behalf of a property owner.

Requisition of Title: A formal objection or requirement concerning the title, made under the sale and purchase agreement. Whether a buyer can raise one, and the deadlines and consequences, depend on the agreement. Ask your solicitor to check the title and any requisition rights promptly.

Reserve Price: The minimum price that a seller will accept for their property at an auction.

S

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 in which buyer demand is high relative to the number of properties for sale. This can create more competition between buyers, although the negotiating position on an individual property still depends on its price, condition, location and buyer interest.

Semi-Detached: A type of construction where two separate buildings are attached by a single, shared common wall.

Settlement: The completion of the transaction when the balance of the price is paid and ownership is transferred. Your lawyer or conveyancer coordinates settlement; confirm when and how keys will be released.

Sole Agency / Exclusive Agency: A written agreement giving one agency the exclusive right to market and sell the property for the agreed period. Commission may still be payable if the owner sells privately during that period; check the agreement with your lawyer.

Subdivision: The legal process of dividing land or a building into separate sites or units, or changing existing boundaries. Whether a proposed subdivision can proceed depends on applicable planning rules, infrastructure and any required approvals. See Whangārei District Council’s subdivision guidance.

Survey: A measurement and record of land and its boundaries prepared by a surveyor. The scope varies: a title plan or survey does not necessarily show every building or physical feature. Ask a licensed cadastral surveyor about any boundary uncertainty.

T

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 in which buyers submit confidential written offers using tender documents by a stated closing time. The seller may accept, reject or negotiate offers as those documents allow; the highest offer is not automatically accepted.

Term: For a home loan, the period over which the loan is to be repaid. This can differ from a fixed-rate period, which is the time an interest rate is fixed.

Title: A legal document that proves a person’s right to or ownership of a property.

Title Search: A check of the land title record for ownership and registered interests, such as mortgages, easements or caveats. A search may reveal matters that need investigation; ask your lawyer to explain their effect and what further checks are needed.

Transfer: A legal document that records a change of ownership for a property.

U

Unit Title: A form of ownership commonly used for apartments and multi-unit developments. It gives an owner title to a principal unit and an interest in common property.

Unconditional Agreement: A binding sale and purchase agreement with no outstanding conditions. Settlement still has to take place on the agreed terms and date.

Unencumbered: A property that is completely free of any mortgages, caveats, or other legal restrictions.

Utilities: Services available to a property, which may include electricity, water, wastewater, gas and telecommunications. Check which services are connected, their capacity and any connection costs for the property you are considering.

V

Valuation: An assessment of a property’s value for a stated purpose and date. A registered valuer can provide a valuation report; it is different from an agent’s appraisal or a council rating value.

Variable Rate Loan: A loan with an interest rate that the lender may change over time. Your repayments or the amount of interest you pay can rise or fall; check the lender’s terms and how a rate change would affect your budget.

Vendor: The person or entity selling a property. In a sale and purchase agreement, the vendor is the seller; your lawyer can explain the parties and obligations stated in the contract.

Z

Zoning: Rules in a district or city plan that guide how land may be used and developed. A property’s zone is only one part of the picture: overlays, precincts, consents and other restrictions may also apply. Check the Whangārei District Council’s zone and rules information for the specific address.

For independent explanations, use the Settled.govt.nz glossary. Read about the Real Estate Authority and REINZ membership. Ask your solicitor how a term operates in your particular agreement.

Have a question about buying or selling in Bream Bay? Send our team a message below or call 09 433 0334 — we are happy to help.