Buying, selling, or investing in property can feel overwhelming—especially with the many terms used in the real estate industry. Understanding these key phrases can help you make informed decisions and feel confident throughout your property journey.
1. Appraisal
An appraisal is an estimate of a property’s market value, usually prepared by a real estate professional. It helps sellers determine a suitable listing price and buyers understand fair market value.
2. Auction
A public sale where buyers compete to purchase a property. The property is sold to the highest bidder, provided the reserve price (minimum price set by the seller) is met.
3. Body Corporate
For units, townhouses or apartments, the body corporate manages shared areas and building maintenance. Owners pay fees that cover insurance, upkeep, and common facilities.
4. Building and Pest Inspection
A professional assessment of a property’s structural condition and for any pest infestations—often a key step before finalising a purchase contract.
5. Conveyancing
The legal process of transferring ownership of property from the seller to the buyer. This is usually handled by a solicitor or licensed conveyancer.
6. Cooling-Off Period
A timeframe after signing a contract during which a buyer can withdraw (in most cases, excluding auctions) without major penalties. Rules vary by state.
7. Equity
The difference between the market value of a property and the amount still owed on the mortgage. Growing equity can be used to fund renovations or additional investments.
8. Fixed vs Variable Interest Rate
A fixed interest rate stays the same for a set period, while a variable rate can change as the market shifts—affecting your mortgage repayments.
9. Negative Gearing
An investment strategy where the income from a rental property is less than the expenses, potentially allowing tax deductions for investors.
10. Open Home
A scheduled time when potential buyers can view a property without booking a private inspection—often used to attract multiple interested parties.
11. Reserve Price
The minimum amount a seller will accept at auction. If bidding doesn’t reach this price, the property may be passed in.
12. Settlement
The final stage in the sale process when the property’s ownership officially transfers to the buyer, and the purchase funds are exchanged.
13. Title Search
A legal document showing who owns the property and any encumbrances such as easements, mortgages or restrictions on the land.
14. Under Offer
A property is described as “under offer” once the seller has accepted an offer but the sale hasn’t yet been finalised or settled.
15. Vendor
The legal term for the person or entity selling a property.
Final Thoughts
Understanding real estate terminology can make navigating the buying or selling process much easier. Whether you’re entering the market for the first time or building an investment portfolio, a clear grasp of these terms helps ensure confident and informed decisions.
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