Accrued Interest Interest calculated but not yet added to the loan. Amortisation  Systematic repayment of a loan through regular installments over a period of time (e.g. Weekly, Monthly or Fortnightly). The Borrower plays the interest and part of the principal in each repayment. Arrears Amount that the Loan is overdue for repayment. Auction A way to sell where all the buyers are in one place and make bids (or offers) until only one buyer is still bidding. An auctioneer runs the auction. The person selling usually sets a reserve price and doesn’t have to sell if the bids are under that amount. If you buy at auction you’re committed to going through with the purchase – so you need to check everything out first and have your finance ready, including the money for your real estate deposit which is paid on the day. Body Corporate A group that all the owners in a block of flats or apartments belongs to. It deals with the running of the building and shared areas like stairways, garages and access ways. Bridging Finance A short term Loan so that you can buy your home while waiting for other money to become available (such as money from selling another place). Once the other money becomes available it’s used to pay back the bridging loan. BBO / BEO Buyers Budget Over … Buyer Enquiry Over… The seller is usually expecting a price 5-15% over BBO/BEO amount. Capital Gain The profit you make when the value of something you own goes up. If you buy something for $100,000 and it goes up to $150,000 – the extra $50,000 is your capital gain (also known as equity). Currently there is no tax on capital gains on your own home. Capital Value  You’ll see this term on your Rating Valuation (RV). It’s the value of your property, including land and buildings but not chattels (things like light fittings, carpets and curtains). Capped interest rate Where the interest rate can go up or down – but it can’t go over a certain level for set time. Certificate of Title This is the ownership paper for your property. It shows information about the land and house as well as the legal description of the land. Chattels  The removable items that come with your house such as carpets, curtains, light fittings and sometimes furniture. Code Compliance Certificate (CCC)  A certificate from your local Authority to say the building complies with the building act. Check all buildings and alterations have a certificate before you buy. Company Title/Share  A property title where owners of units form a company. It is difficult to raise finance against this type of title because a new owner has to be approved by all the existing owners. These types of titles usually sell at a discount. Conditional Agreement  An agreement with conditions that must be met before everything becomes final. Both the buyer and the seller can put conditions in the agreement. Buyers often ask for conditions about checking the Certificate of Title, and getting finance or a builders report for example. Covenant  If a covenant is recorded on the title for your property it means there is some legal restriction or agreement you have to keep. For instance your might have to pay for fencing, protect a native tree on your land, or can only build within certain restrictions. Conveyancing  The legal process when you buy or sell property – including the checking and registration of documents to transfer the ownership over. Cross-lease This is where there are two or more homes on a cross-leased property. All the owners own the land together and each owner leases the land their home is on from the others. All owners of the common land must agree before improvements such as paths, fences or building alterations can be made. Depreciation  This means how much the value of something goes down as it gets older or more worn. It’s a term insurance companies often use. Disbursements  These are costs, due to bodies other than the lenders or solicitors, which are incurred by the purchaser/borrower. Discharge of Mortgage  This is what happens when you’ve paid everything back. The mortgage is discharged so the bank’s name is taken off the title to your property and the Certificate of Title is returned to you. Enduring Power of Attorney  A legal document that gives someone you name the power to act for you if you need them to, for instance if you are in a serious accident and not able to look after things yourself. There are two types – one that covers your care and welfare, and one for property matters. Easement If an easement is recorded on the title for your property it means someone else has a right to use your property in a certain way – such as the right to run pipes or cables under your land, or to use a drive or path. Or you may have a right over someone else’s property. Equity The amount of an Asset really owned e.g. on a home worth $230,000 with a loan of $100,000, the equity is $130,000. Fixed Interest  An interest rate set for a fixed term. Penalties usually apply if the loan is paid out before the term expires. Finance Date  Date when all conditions on the offer must be met. Floating Interest rate  Where the interest rate can go up or down as the market changes. Sometimes called a variable interest rate. Freehold  This is the most common type of ownership. It means you own the land and house with virtually no restrictions on your ownership rights. Freehold is also commonly used to mean that you don’t own any money on the home. Gearing  The ratio of your own money and borrowed funds in purchase of a home or an investment. Installments  Regular fortnightly or monthly payments off your loan. Usually some money goes towards repaying the money you owe and some towards the interest on the loan. Interest  … Continue reading Real Estate Terminology Cheat Sheet