A-Z glossary of real estate terms to know before you begin your property search
To help you on your journey towards buying your first property, we've compiled a list of the glossary terms that will be helpful to know.
Appreciation: this is the value increase of your property over time.
Broker: a broker is someone who helps you negotiate your home loan and can be employed either through a bank or independently.
Buyers agent: a buyers agent is an advocate for the buyer, suggesting suitable properties and representing you (the buyer) in the negotiation process.
Capital gain: this is the increase in value of the property which is realised after the sale of that property.
Capital value: the value for that particular property at the time of valuation.
Comp (slang): or 'comparables' are a term used to refer to similar properties to compare values.
Configuration: the layout and number of bedrooms of a property, and this often also denotes the number of other features including bathrooms and carparks.
Conditional contract: a contract signed with conditions that must be met prior to the sale going ahead.
Debt to income ratio: a term for property investment which calculates your monthly debt payments divided by gross monthly income to assist in determining if the property purchase is financially viable.
Display suite: a show home of an off-the-plan property.
Due diligence: investigation or audit of the property you're looking at purchasing. For off-the-plan properties this can also include research about the developer, architect and builder too.
Dutiable value: the price paid for the property or its market value (whichever is greater) including GST.
Fixed-rate loan: when the interest rate applicable to the loan is locked for a certain period of time.
Floorplans: a drawing of the architectural plan of the home. Often presented as a birds-eye-view depiction of the home.
Guarantor: someone who guarantees payment of your home loan repayments if you default..
LGA: local government areas are a subdivision of a state or territory
LMI (lenders mortgage insurance): a type of insurance for the lender which borrowers are often required to pay. Typically LMI is payable if you borrow more than 80% of your home's value
LVR (loan to value ratio): the amount you're home loand, in proportion to the property's value.
Home loan: a fixed term of payments towards your property. Home loan repayments can include repayments of the original loan amount (principal) and interest. However, interest-only loans are also available.
Mortgage: the security that a lender takes over your property to protect the lender in the event of your default in repayments of your home loan.
Offer: the submission of the amount you are prepared to pay for the property which if accepted by the vendor, will win you the home.
Off-the-plan: a property for which separate legal title has not yet been created.
Principal: amount borrowed under a home loan (not including interest).
Settlement date: when you are required to pay the balance of the purchase price for the property and take legal title to the property.
Conveyancer or Settlement Agent: a licensed, qualified agent or conveyancer who handles the preparation of documentation to sell or buy a property
Sunset clause: a sunset clause in an off-the-plan purchase means the either the seller or buyer (or both) has the legal grounds to withdraw from the sale agreement should separate legal title to the property not be created by a sunset date specified in the contract.
Title: details of the property specifying ownership and other proprietary rights.
Unconditional contract: no conditions specified in the property purchase contract. In off-the-plan contracts this usually means that there are no conditions to the sale and purchase of the property other than the creation of separate legal title to the property.
Important note: The information in this article is general information only and has been prepared without taking into account your personal circumstances. While every care has been taken to ensure the accuracy of the information, Mirvac cannot be held liable for any inaccuracies, errors or omission. The information in this article does not constitute legal, tax or financial advice and you should always seek professional advice before purchasing property in relation to your individual circumstances.