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glos1.jpgAgency Agreement:
A selling or managing agreement under section 42AA of Property Stock & Business Agents Act, where the vendor or property owner (landlord) legally engages the services of an agent for a negotiated fee. This document is a compulsory document.


A real estate agent's view of the reasonable selling expectation of a property. It is not to be construed as a formal valuation in NSW.


A public sale of property in which the highest bidder purchases the property subject to a reserve price.

Authority To Sell:

A legally binding document that is executed by the vendor. It details the agreement between the vendor and the agent. Many aspects of the authority to sell, such as commission and advertising costs, are negotiable between both parties.

Body Corporate:

The collective ownership of the common areas in a block of apartments or multi-dwelling complex. This entity is responsible for the administration and upkeep of the areas shared by all the owners (common property).

Breach Of Contract:

The breaking of any term or condition of a contract.

Bridging Finance:

A short-term loan (mostly less than twelve months) that is 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 could attract a higher interest rate.

Building Certificate:

A certificate of 'non action' issued by the council under section 149D of the Environmental Planning and Assessment Act 1979.

glos2.jpgBuilding Consultant:

An expert experienced in designing or constructing a building. When employing an expert for a pre-purchase report on a property, you should ask whether he or she has indemnity insurance to cover any serious omissions about building defects not covered in any report. A building consultant is not required to be registered.

Building Inspector:

A person registered with the Building Practitioners Board as a building inspector. The 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.

Building Surveyor:

A person registered with the Building Practitioners Board as a building surveyor. This person is qualified to issue a building permit, inspect a building for compliance with the Building Act and building regulations and issue an occupancy permit or certificate of final inspection.

Buyers Agent:

A Real Estate Agent who acts solely for the buyer by sourcing suitable properties and representing the buyer throughout the buying process.

Capital Gain:

The result of selling your property at a higher price than what you paid for it.


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

Caveat Emptor:

A Latin expression that means ‘let the buyer beware’. It is the responsibility of the purchaser to ensure that the property meets with their approval prior to purchase.

Certificate Of Occupancy:

The document issued by a building surveyor, which shows that a particular building is suitable for occupation. It is not evidence that the building complies with the Building Act or building regulations.

Certificate Of Title:

A document that indicates the owner of a property, the size of the land and whether there are any limitations on the title such as mortgages, easements or encumbrances


Items of personal property that are moveable


Paid by the vendor to the Real Estate Agent, when the property is sold. It is usually a percentage of the selling price of the property. The amount of commission is negotiable between the vendor and Real Estate Agent.

Common Property:

Areas of a property that are used by and belonging jointly to all of the particular owners of a property. This applies to particular property such as apartment blocks or multi-dwelling complexes.

Company Title:

Each owner in an apartment block has shares in a company which has total ownership of the land and building of the block. The owners receive a parcel of the shares with rights attached. Each owner is entitled to exclusive occupation of a flat, but this is subject to the company’s Memoranda and Articles of Association. These should be carefully examined for any restrictions that may be in place.

Comparison Rate:

A tool that shows the true cost of a loan – interest rate, fees and charges – to be compared with other loans using a single figure percentage.

Consumer Credit Code:

Regulates all credit for personal, domestic or household purposes. To ensure fair dealing and to protect the interest of consumers, all lenders must comply with the Consumer Credit Code.

Consumer Credit Insurance:

An option for borrowers to guard against losing their property in case they default on the loan repayments. This will safeguard the loan if repayments cannot be made because of sickness, accidents or unemployment.

Contract Note:

A document given to a prospective buyer who is making an offer. The contract note is legally binding when signed by both parties. It may or may not precede a more detailed contract of sale document.

Contract Of Sale:

A legal document prepared by the vendor, usually with the aid of a solicitor, that outlines the details of the sale. The contract of sale is legally binding when signed by both parties.


A person who is not a legal practitioner, who carries out the business of conveyancing. A conveyancer may not undertake any other legal work.


Transferring the ownership of a property from the vendor to the purchaser. It is regularly performed by a solicitor or a conveyancer.

Cooling Off Period:

Usually a five business day period available to a purchaser to withdraw from a contract for the sale of residential land. This period is a default period that can possibly be waived by virtue of a purchaser completing a Sec 66W certificate or can be varied by mutual agreement between the vendor and purchaser.


An agreement that creates an obligation on the titleholder of a property to do or refrain from doing something. For example, a restrictive covenant could state that no more than one dwelling could be built on a particular parcel of land.


A non-refundable percentage of the purchase price paid by the purchaser when contracts are signed and exchanged. It is usually ten percent. The deposit is held in a trust account by a Real Estate Agency, by the vendor’s solicitor or held jointly in a trust account by the vendor and purchaser.

Deposit Bond:

A substitute for all or part of the typical 10% cash deposit required between signing contracts and settlement.


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

Dummy Bid:

A false bid made or accepted by an auctioneer at auction. Dummy bids can include bids made by a non-genuine bidder and ‘fictitious’ bids pulled out of the air by the auctioneer. Any bid made on behalf of the vendor by anyone, other than the auctioneer under the auction rules, is considered a dummy bid. Dummy bidding is illegal.

Drainage Document:

One of the essential documents provided by the vendor in the contract for sale of land. Supplied by the MWS&DB or Local Government in the area and showing the sewerage lines.


A legal right (encumbrance) over the title of the parcel of land which allows the use or control of your land by a third party for the provision of utilities such as sewerage or power, or for one entity to gain access across the land to another parcel of land.


The use of, or intrusion onto, another person’s property without consent. This usually refers to a structure.


A third party’s right that obstructs the unencumbered use or transfer of a property. Examples are easements, mortgages or caveats.

Estimated Selling Price:

The price a real estate agent estimates a property could sell for. It must be recorded on the selling agency agreement to either sell at a single figure or as a range where the difference between the high and the low figure does note exceed ten percent. Equity:

Having ‘equity in your own house’ refers to the difference between the market value of your 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.


Any item that is specifically not included in the sale.

First Home Owners Grant:

A scheme providing first home owners with a non-means tested, one off payment of $7000. This payment was introduced in July 2000.


Items that can be removed without damaging the property. For example air conditioners, lighting and garden ornaments. All items must be listed in the contract of sale if the buyer wants them to remain with the property.


Items which 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.

Fixed Interest Rate:

- An interest rate that remains unchanged for a set period.


When a borrower fails to meet mortgage repayments or repay a loan, the lender takes over the property and keeps it.


Occurs when you have a verbal agreement with an agent or seller to buy a property at an agreed price but the property is not sold to you in the end. This usually happens when the vendor has decided to sell the property to someone else, usually for a higher amount. There is no binding agreement in the purchase of land until contracts have been exchanged.

Goods And Services Tax (GST):

A consumption tax of ten percent levied on the final consumer of the goods or services. The supplier of the transaction is responsible for collecting the GST and sending it to the Australian Taxation Office (ATO).

Gross Income:

Total income before income tax and expenses are deducted.


Any removable item that the vendor has agreed will be included in the sale.

Interest Only Loan:

Throughout the term of the loan, only the interest is paid off. The loan itself 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, his or her share of the property passes to the surviving owner.

Land Tax:

Calculated on the value of a block of land and payable by the owner.


A written contract giving a finance provider certain rights over specific property. For example, the house being bought by the borrower as a security for the loan.

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% 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.


Organisation that lends money to a borrower by a mortgage agreement.

Mortgage Sale:

If the borrower defaults, the lender can seek to recover the debt by selling the property, which was the security for the loan under the mortgage.


A person who take out a mortgage on a property he or she is buying. The property is assigned to the lender as security for the loan.

Net Income:

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

Off The Plan:

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

On The Market: The point at an auction where a price is reached at or above which the vendor is prepared to sell.


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


The illegal practice of overstating the estimated selling price of a property. This is usually done to encourage a vendor to list their property for sale.

Passed In:

The circumstances where a property for auction is not sold, usually because it has not reached the vendor's reserve price.


The face value amount of a loan, on which interest is calculated.


Discounts received, usually for bulk purchases such as advertising. Any rebates received by an agent must be passed on to the vendor.

Requisitions On Title:

A set of questions about a property that the purchaser asks the vendor after the contract has been signed. This is normally undertaken with the assistance of a solicitor.

Reserve Bank Of Australia:

Australia’s central bank, combining the roles of financial system supervisor, banker and manager of monetary policy.

Reserve Price:

A vendor’s minimum sale price for a property. It may be recorded on the authority to sell.


The occasion when ownership of a property passes from the vendor to the purchaser and the balance of the sale price is paid to the vendor.


A legally qualified and licensed person who undertakes legal work and provides legal advice for a fee.

Stamp Duty:

A state government tax, based on the sale price of a property, paid by the buyer when property ownership is transferred.

Strata Title:

Individual ownership of an apartment or unit within a block or multi-unit complex. This is separate to the joint ownership of common areas shared by all the property owners in the building complex.

Tenants In Common:

A form of joint ownership of a property in which each person owns a share of the property, equally or unequally. Upon the death of one owner, their share passes to his or her heir who assumes the role of the tenant in common with the other existing owner.


A legal document that identifies who has a right to the ownership of property.

Torrens Title:

The modern simplified system of showing title to land through one document recorded at a central registry.

Transfer Of Land:

A document that records the change of ownership of a property from the vendor to the purchaser.


The illegal practice of understating the estimated selling price of a property to prospective purchasers, either directly or through advertising, to encourage greater interest in the property.

Unfair Contract Terms:

A term in a contract that is not in good faith and causes a significant imbalance in the rights and obligations of both parties.


An estimate of the value of a property by a registered valuer.

Vendor Bid:

A bid made on behalf of the vendor. Vendor bids can only be made by the auctioneer and only when the auction rules allow it. The auctioneer makes this statement before bidding starts and announces each vendor bid as, or before, it is made.

Vendor’s Statement (section 32):

Information that the vendor must provide to the purchaser advising of restrictions such as covenants and easements, outgoings such as rates, and any other notices such as compulsory acquisition.

Vendor’s Terms Of Contract:

Also known as terms contract, where finance may be supplied by the vendor rather than by an established credit provider.


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