Whether you have been searching for a property for an extended period of time or a short while,  the real estate market can be overwhelming. With a plethora of jargon and industry-specific terms, understanding real estate lingo is crucial to making informed decisions and securing your dream property. To simplify things, we have created a comprehensive guide to the essential lingo you need to know throughout the process, particularly in Victoria, and when working with McKean McGregor.

Agent
A licensed professional authorised to act in the selling or buying of a property. At McKean McGregor, we refer to our agents as a Licensed Estate Agent or a Sales Consultant.

Appraisal

An appointment with a Licensed Estate Agent or a Sales Consultant to discuss their opinion of the value and sales process of your property. During an appraisal, a Licensed Estate Agent or a Sales Consultant may also outline strategies to improve the value of a property, including updates or renovations. At McKean McGregor, an appraisal is provided at no cost. You can read our article on what to expect at an appraisal here.

Auction

A sale in public by an Auctioneer, usually (but not always) at the property for sale, where the property is sold to the highest bidder once the property has reached reserve and is on the market.

Auctioneer

An Auctioneer is a professional who conducts auctions by taking bids and facilitating the sale of the property to the highest bidder. Their role involves engaging the audience, managing the bidding process, and ensuring a fair and transparent auction environment.

Building & Pest Inspection

A Building and Pest Inspection involves assessing the condition of a property before purchase. This inspection is carried out by qualified professionals who thoroughly examine the property for structural defects, potential hazards, and pest infestations. The results of the inspection help buyers make informed decisions based on the identified issues. You can read more on why Building & Pest Inspections matter here.

Buyer’s Agent

A Buyers Agent is a real estate professional who represents and assists property buyers throughout the purchasing process, offering expertise in property search and negotiations, and ensuring the buyer's best interests are protected.

Capital Gain

The increase in the value of a capital asset when sold. A capital gain occurs when you sell an asset for more than what you originally paid for it.

Capital Gains Tax

A tax applied to the profit made from selling a property or any other asset that has increased in value since its acquisition. In the real estate industry, when a property is sold at a higher price than the original purchase price, the seller may be subject to CGT on the capital gain realised from the sale. The tax is calculated based on the difference between the property's original cost base and the selling price, after accounting for eligible deductions and exemptions.

Caveat

Is a legal notice or warning that can be lodged by a person with an interest in a property. It is registered on the property's title to indicate that someone other than the registered owner has a claim or an interest in the property.

Client Services

Valued members of our administration team, who support our Licensed Estate Agent or Sales Consultant with the facilitation of paperwork, marketing, compliance and trust accounting.

Commission

A payment provided to an agent for their services, including property sales, as outlined in the Contract of Sale. Typically, it is calculated as a percentage of the contract amount, but in some cases, it may be a predetermined fixed amount.

Conjunctional Agent

A Conjunctional Agent is a real estate agent who collaborates with another agent or agency to sell a property. They work together to market and find a buyer for the property, sharing the commission upon a successful sale. This partnership allows for broader exposure of the property to potential buyers and enhances the chances of a quick and successful transaction.

Contract Of Sale (usually referred to as the Contract)

A legal agreement relating to the sale of a property, which formalises the terms and conditions of sale.

Conveyancer

A licensed professional who administrates the transfer of ownership of common law titles from one person to another.

Counteroffer

A new offer as to price or terms and conditions, made in reply to a prior offer that was not accepted.

Deposit

A sum of money paid by a buyer to the agent as a display of their commitment to the purchase or contract. Typically a percentage of the total sales price, it generally becomes due either after the cooling-off period ends or in accordance with the auction contract.

Development Approval

Approval from the relevant planning authority, usually the local council, to construct, add, amend or change the structure of a property.

Easement

A right to use the land of another or a right to prevent the owner of that land from using that land in a particular manner. Commonly used where Government authorities have the right to run infrastructure such as electrical mains or drainage through private property.

Equity

The interest or value that an owner has in an asset over and above the debt against it.

Land Tax

Land tax in Victoria is a state tax imposed on the owners of land and certain types of property. It is an annual tax calculated based on the total taxable value of all landholdings owned by an individual or entity. The tax is levied on properties with a total taxable value above a specified threshold, and the rate of taxation increases progressively with the value of the landholdings. 

Listing

The term commonly used by agents for obtaining an instruction to sell or lease real estate.

Market Price

The price actually paid, or agreed in a contract to be paid, for an asset. It differs from market value in that it relates to a verifiable fact, whereas market value is an estimate until proven.

Market Value

Market value is an estimate of a property’s value on the date of valuation.

Mortgage

Documentation of a property loan.

Mortgagee

Financier or bank who lends money against property as security.

Offer

The consideration offered to purchase a property.

Off-market

Property sold without public advertising.

Pre-approval

In Victoria, pre-approval refers to the process of obtaining a conditional commitment from a lender for a home loan before actually making an offer to purchase a property. During this process, the lender assesses the borrower's financial situation, creditworthiness, and ability to repay the loan.

Private Treaty Sale

A sale negotiated directly between the parties or their agents.

Section 32

In Victoria, a Section 32, also known as a Vendor's Statement, is a crucial legal document provided by the seller (vendor) to potential buyers before the property is sold. It contains essential information about the property, such as title details, zoning, any encumbrances, outstanding rates, planning and building permits, and other relevant disclosures that may impact the buyer's decision to purchase the property. A Section 32 is designed to provide transparency and protect the buyer by ensuring they have access to vital information about the property's legal and financial status before proceeding with the sale.

Seller’s Market

A seller's advantage in the real estate market occurs during a period of high demand and limited property supply, creating competition among buyers and driving prices to relatively higher levels. This market trend is fueled by the scarcity of available properties and the significant interest from potential buyers.

Settlement

Completion of the sale occurs when the buyer fulfils the payment of the contract price to the vendor, the conveyancers for both parties confirm the change in title, and the buyer legally takes possession of the property. It marks the final stage of the transaction, solidifying the transfer of ownership from the seller to the buyer.

ESA (also referred to as an Exclusive Sales Authority)

An Exclusive Sales Authority in Victorian Real Estate is a legally binding agreement between a property seller (vendor) and a real estate agent. This contract grants the exclusive right to the nominated agent to market and sell the property for a specified period. During this time, the vendor cannot appoint other agents to sell the property, and the chosen agent is responsible for promoting the property, finding potential buyers, and negotiating the sale on the vendor's behalf.

Stamp Duty

In Victoria, stamp duty is a state tax imposed on various transactions, including property purchases. When buying a property, the buyer is required to pay stamp duty to the State Revenue Office (SRO). The amount of stamp duty is calculated based on the property's purchase price or market value, whichever is higher, and various factors such as property type, intended use, and the buyer's circumstances.

STCA (Subject to council approval)

A disclaimer made in advertising clarifying that potential changes or upgrades to a property require the relevant approvals.

Trust Account

A legislatively required bank account where monies are held by an agent for or on behalf of another person, such as deposits or rent monies. No interest is earned on funds held in a trust account.

Unconditional offer

An offer not subject to any other conditions (such as building inspections or finance).

Under contract

Once a contract's terms and conditions, along with the agreed-upon purchase price, are set by both parties, the deal is not considered final until the contract is fully executed by both sides. Until the contract is fully executed, the seller retains the option to accept another offer from a different buyer at any time.

Valuation

A prediction of the value of an asset, depending on the purpose for which the valuation is required. A valuation is completed by a licensed professional and typically occurs as part of the bank's process to finalise a loan.

Vendor

In real estate transactions, the legal owners of a property for sale.

Understanding real estate lingo is essential for anyone considering buying or investing in property in Australia. By decoding the commonly used terms in the Australian real estate market, you'll be better equipped to navigate the buying process confidently and make informed decisions.