A public sale where property is sold to the highest bidder. In Australia, auctions are a common method of selling residential property, especially in major cities. Unlike private treaty sales, auctions have no cooling-off period, and successful bidders must be prepared to exchange contracts and pay a deposit immediately.

An estimate of a property's value provided by a real estate agent or buyer agent. Unlike a formal valuation, an appraisal is not legally binding but offers a useful indication of market value based on comparable sales in the area.

The administrative entity made up of all owners within a strata-titled property. The body corporate (also called an "owners corporation" in some states) is responsible for managing common property, setting and collecting levies, and enforcing by-laws.

A licensed real estate professional who exclusively represents property buyers. Unlike selling agents who work for vendors, buyer agents have a fiduciary duty to their buying clients, helping them find suitable properties, conducting due diligence, and negotiating the best possible price and terms.

A short-term loan that helps buyers purchase a new property before selling their existing one. This type of finance "bridges" the gap between settlements, allowing buyers to secure their new home without having to sell first.

The legal process of transferring property ownership from one party to another. This includes preparing and reviewing contracts, conducting searches, arranging settlement, and registering the change of ownership with the relevant government authority.

A statutory timeframe (varying by state) during which a buyer can withdraw from a property contract. This period applies to private treaty sales but not to auction purchases. Withdrawing during this period may incur a small penalty (typically 0.25% of the purchase price).

An upfront payment made by the buyer when contracts are exchanged, typically 10% of the purchase price. The deposit is held in trust until settlement and forms part of the total payment for the property.

The comprehensive research and verification process undertaken before purchasing a property. This includes reviewing contracts, conducting building and pest inspections, checking zoning regulations, investigating strata records (for apartments), and researching the neighborhood and market conditions.

A right to use or access a portion of land owned by another person for a specific purpose. Common examples include access roads, shared driveways, or utility company rights to run services through a property.

Exchange of Contracts

The point at which both buyer and seller have signed identical contracts and exchanged them, making the agreement legally binding. In most states, the cooling-off period begins at exchange (except for auction purchases, which have no cooling-off period).

First Home Owner Grant (FHOG)

A government scheme that provides a one-off payment to eligible first-time home buyers. The grant amount and eligibility criteria vary by state and territory and are typically limited to new or substantially renovated properties.

A property transaction where the price is set and non-negotiable. This is common in new developments or house and land packages, where the developer establishes a fixed price for each property.

When a seller accepts a higher offer from another buyer after already verbally accepting an offer but before contracts are exchanged. This practice is legal in most Australian states but considered unethical.

A person who agrees to be legally responsible for paying a borrower's debt if they default on their loan. Parents often act as guarantors for first-time buyers, using equity in their own property to help their children secure financing.

Home Loan Pre-approval

A conditional approval from a lender indicating how much they are willing to lend you for a property purchase. Pre-approval gives buyers confidence to make offers within their budget and is particularly important when planning to bid at auction.

A property purchased primarily to generate rental income and/or capital growth rather than as a primary residence. Investment properties receive different tax treatment than owner-occupied homes, including potential tax deductions for expenses and depreciation.

A form of property ownership where two or more people own the property equally, with the right of survivorship. If one owner dies, their share automatically transfers to the surviving owner(s), regardless of what their will states.

The interest rate that influences all other interest rates in the mortgage market. Changes to the key rate (often set by the Reserve Bank of Australia) can significantly impact mortgage repayments and property affordability.

Lenders Mortgage Insurance (LMI)

Insurance that protects the lender (not the borrower) if the borrower defaults on their loan. LMI is typically required when the deposit is less than 20% of the property's value and can add thousands of dollars to the cost of buying a property.

An annual tax levied by state governments on landowners whose total land value exceeds certain thresholds. Primary residences are generally exempt, making this tax primarily applicable to investors and commercial property owners.

A legal agreement that gives a lender the right to take possession of a property if the borrower fails to repay the loan according to the agreed terms. The mortgage is registered on the property's title until the loan is fully repaid.

An investment strategy where the costs of owning a rental property (including interest payments) exceed the income it generates, resulting in a net loss. In Australia, these losses can be offset against other income for tax purposes, potentially reducing the investor's overall tax liability.

Purchasing a property before it has been built, based on architectural plans and renderings. This approach often offers price advantages but comes with risks, including construction delays, changes to specifications, and the possibility that the completed property may differ from expectations.

A person who purchases a property to live in as their primary residence, as opposed to an investor who buys property to rent out. Owner-occupiers often receive more favorable loan terms and may be eligible for certain government grants and concessions.

A property sale where the seller sets an asking price and negotiates directly with potential buyers, usually through a real estate agent. Unlike auctions, private treaty sales include a cooling-off period (except in Western Australia) and allow for conditional offers.

Principal and Interest Loan

A mortgage where repayments cover both the borrowed amount (principal) and the interest charges. Over time, the proportion of each payment going toward the principal increases, gradually building equity in the property.

A professional who specializes in construction costs and building contracts. For property investors, quantity surveyors prepare depreciation schedules that identify all depreciable items in a property, potentially leading to significant tax deductions.

The minimum price a seller is willing to accept at auction. If bidding doesn't reach the reserve, the property is "passed in" and the highest bidder typically gets first opportunity to negotiate with the seller.

A measure of the return on a rental property investment, expressed as a percentage. Gross rental yield is calculated by dividing the annual rental income by the property's purchase price and multiplying by 100. Net rental yield accounts for expenses such as management fees, maintenance, and insurance.

The final stage of a property transaction when ownership legally transfers from seller to buyer. At settlement, the buyer pays the balance of the purchase price, the seller provides the transfer documents, and the keys are handed over.

A state government tax paid by the buyer when purchasing a property. The amount varies by state and depends on the property's value, with concessions often available for first home buyers and owner-occupiers.

A form of ownership for multi-unit properties that divides the property into individual lots (apartments or units) and common property. Owners have exclusive rights to their lot and shared ownership of common areas, managed through a body corporate or owners corporation.

A legal investigation that confirms the seller's ownership rights and identifies any encumbrances on the property, such as mortgages, caveats, or easements. This is a crucial part of the conveyancing process, typically conducted before settlement.

The main land ownership system in Australia, where the government maintains a central register of all land ownership. Torrens Title provides indefeasible title to the registered proprietor, meaning their ownership cannot be challenged except in specific circumstances like fraud.

Unconditional Approval

Final loan approval from a lender, confirming they will provide the funds for a property purchase. Unlike pre-approval, unconditional approval is legally binding and is issued after the lender has assessed the specific property being purchased.

The illegal practice of deliberately advertising a property for sale at a price below what the seller is willing to accept or what the agent believes the property is worth. Laws against underquoting vary by state but generally aim to prevent agents from misleading buyers about price expectations.

A formal assessment of a property's market value conducted by a qualified valuer. Unlike an appraisal, a valuation follows a strict methodology and is often required by lenders before approving a mortgage.

The legal term for the seller of a property. In real estate transactions, the vendor is the current owner who is offering the property for sale.

A final inspection of the property by the buyer shortly before settlement to ensure it's in the agreed condition. The walkthrough allows buyers to verify that all included fixtures and fittings remain and that the property hasn't been damaged since the contract was signed.

A property that is particularly welcoming or friendly to visitors and guests, often used in the context of hospitality properties or vacation rentals. This quality can add value to investment properties in tourist areas.

See "Rental Yield." The return on investment from a property, typically expressed as a percentage of the purchase price.

Local government regulations that determine how land can be used and developed. Zoning classifications (such as residential, commercial, or industrial) restrict what can be built on a property and may affect its value and potential for future development.

Property Buyer's Glossary

Welcome to our comprehensive glossary of property buying terms. This resource is designed to help you navigate the complex terminology used in the Australian real estate market. Whether you're a first-time buyer or an experienced investor, understanding these terms will empower you to make more informed decisions.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Auction: A public sale where property is sold to the highest bidder. In Australia, auctions are a common method of selling residential property, especially in major cities. Unlike private treaty sales, auctions have no cooling-off period, and successful bidders must be prepared to exchange contracts and pay a deposit immediately.
Appraisal: An estimate of a property's value provided by a real estate agent or buyer agent. Unlike a formal valuation, an appraisal is not legally binding but offers a useful indication of market value based on comparable sales in the area.

B

Body Corporate: The administrative entity made up of all owners within a strata-titled property. The body corporate (also called an "owners corporation" in some states) is responsible for managing common property, setting and collecting levies, and enforcing by-laws.
Buyer Agent: A licensed real estate professional who exclusively represents property buyers. Unlike selling agents who work for vendors, buyer agents have a fiduciary duty to their buying clients, helping them find suitable properties, conducting due diligence, and negotiating the best possible price and terms.
Bridging Finance: A short-term loan that helps buyers purchase a new property before selling their existing one. This type of finance "bridges" the gap between settlements, allowing buyers to secure their new home without having to sell first.

C

Conveyancing: The legal process of transferring property ownership from one party to another. This includes preparing and reviewing contracts, conducting searches, arranging settlement, and registering the change of ownership with the relevant government authority.
Cooling-off Period: A statutory timeframe (varying by state) during which a buyer can withdraw from a property contract. This period applies to private treaty sales but not to auction purchases. Withdrawing during this period may incur a small penalty (typically 0.25% of the purchase price).

D

Deposit: An upfront payment made by the buyer when contracts are exchanged, typically 10% of the purchase price. The deposit is held in trust until settlement and forms part of the total payment for the property.
Due Diligence: The comprehensive research and verification process undertaken before purchasing a property. This includes reviewing contracts, conducting building and pest inspections, checking zoning regulations, investigating strata records (for apartments), and researching the neighborhood and market conditions.

E

Easement: A right to use or access a portion of land owned by another person for a specific purpose. Common examples include access roads, shared driveways, or utility company rights to run services through a property.
Exchange of Contracts: The point at which both buyer and seller have signed identical contracts and exchanged them, making the agreement legally binding. In most states, the cooling-off period begins at exchange (except for auction purchases, which have no cooling-off period).

F

First Home Owner Grant (FHOG): A government scheme that provides a one-off payment to eligible first-time home buyers. The grant amount and eligibility criteria vary by state and territory and are typically limited to new or substantially renovated properties.
Fixed-Price Purchase: A property transaction where the price is set and non-negotiable. This is common in new developments or house and land packages, where the developer establishes a fixed price for each property.

G

Gazumping: When a seller accepts a higher offer from another buyer after already verbally accepting an offer but before contracts are exchanged. This practice is legal in most Australian states but considered unethical.
Guarantor: A person who agrees to be legally responsible for paying a borrower's debt if they default on their loan. Parents often act as guarantors for first-time buyers, using equity in their own property to help their children secure financing.

H

Home Loan Pre-approval: A conditional approval from a lender indicating how much they are willing to lend you for a property purchase. Pre-approval gives buyers confidence to make offers within their budget and is particularly important when planning to bid at auction.

I

Investment Property: A property purchased primarily to generate rental income and/or capital growth rather than as a primary residence. Investment properties receive different tax treatment than owner-occupied homes, including potential tax deductions for expenses and depreciation.

J

Joint Tenancy: A form of property ownership where two or more people own the property equally, with the right of survivorship. If one owner dies, their share automatically transfers to the surviving owner(s), regardless of what their will states.

K

Key Rate: The interest rate that influences all other interest rates in the mortgage market. Changes to the key rate (often set by the Reserve Bank of Australia) can significantly impact mortgage repayments and property affordability.

L

Lenders Mortgage Insurance (LMI): Insurance that protects the lender (not the borrower) if the borrower defaults on their loan. LMI is typically required when the deposit is less than 20% of the property's value and can add thousands of dollars to the cost of buying a property.
Land Tax: An annual tax levied by state governments on landowners whose total land value exceeds certain thresholds. Primary residences are generally exempt, making this tax primarily applicable to investors and commercial property owners.

M

Mortgage: A legal agreement that gives a lender the right to take possession of a property if the borrower fails to repay the loan according to the agreed terms. The mortgage is registered on the property's title until the loan is fully repaid.

N

Negative Gearing: An investment strategy where the costs of owning a rental property (including interest payments) exceed the income it generates, resulting in a net loss. In Australia, these losses can be offset against other income for tax purposes, potentially reducing the investor's overall tax liability.

O

Off-the-Plan: Purchasing a property before it has been built, based on architectural plans and renderings. This approach often offers price advantages but comes with risks, including construction delays, changes to specifications, and the possibility that the completed property may differ from expectations.
Owner-Occupier: A person who purchases a property to live in as their primary residence, as opposed to an investor who buys property to rent out. Owner-occupiers often receive more favorable loan terms and may be eligible for certain government grants and concessions.

P

Private Treaty: A property sale where the seller sets an asking price and negotiates directly with potential buyers, usually through a real estate agent. Unlike auctions, private treaty sales include a cooling-off period (except in Western Australia) and allow for conditional offers.
Principal and Interest Loan: A mortgage where repayments cover both the borrowed amount (principal) and the interest charges. Over time, the proportion of each payment going toward the principal increases, gradually building equity in the property.

Q

Quantity Surveyor: A professional who specializes in construction costs and building contracts. For property investors, quantity surveyors prepare depreciation schedules that identify all depreciable items in a property, potentially leading to significant tax deductions.

R

Reserve Price: The minimum price a seller is willing to accept at auction. If bidding doesn't reach the reserve, the property is "passed in" and the highest bidder typically gets first opportunity to negotiate with the seller.
Rental Yield: A measure of the return on a rental property investment, expressed as a percentage. Gross rental yield is calculated by dividing the annual rental income by the property's purchase price and multiplying by 100. Net rental yield accounts for expenses such as management fees, maintenance, and insurance.

S

Settlement: The final stage of a property transaction when ownership legally transfers from seller to buyer. At settlement, the buyer pays the balance of the purchase price, the seller provides the transfer documents, and the keys are handed over.
Stamp Duty: A state government tax paid by the buyer when purchasing a property. The amount varies by state and depends on the property's value, with concessions often available for first home buyers and owner-occupiers.
Strata Title: A form of ownership for multi-unit properties that divides the property into individual lots (apartments or units) and common property. Owners have exclusive rights to their lot and shared ownership of common areas, managed through a body corporate or owners corporation.

T

Title Search: A legal investigation that confirms the seller's ownership rights and identifies any encumbrances on the property, such as mortgages, caveats, or easements. This is a crucial part of the conveyancing process, typically conducted before settlement.
Torrens Title: The main land ownership system in Australia, where the government maintains a central register of all land ownership. Torrens Title provides indefeasible title to the registered proprietor, meaning their ownership cannot be challenged except in specific circumstances like fraud.

U

Unconditional Approval: Final loan approval from a lender, confirming they will provide the funds for a property purchase. Unlike pre-approval, unconditional approval is legally binding and is issued after the lender has assessed the specific property being purchased.
Underquoting: The illegal practice of deliberately advertising a property for sale at a price below what the seller is willing to accept or what the agent believes the property is worth. Laws against underquoting vary by state but generally aim to prevent agents from misleading buyers about price expectations.

V

Valuation: A formal assessment of a property's market value conducted by a qualified valuer. Unlike an appraisal, a valuation follows a strict methodology and is often required by lenders before approving a mortgage.
Vendor: The legal term for the seller of a property. In real estate transactions, the vendor is the current owner who is offering the property for sale.

W

Walkthrough: A final inspection of the property by the buyer shortly before settlement to ensure it's in the agreed condition. The walkthrough allows buyers to verify that all included fixtures and fittings remain and that the property hasn't been damaged since the contract was signed.

X

Xenodochial Property: A property that is particularly welcoming or friendly to visitors and guests, often used in the context of hospitality properties or vacation rentals. This quality can add value to investment properties in tourist areas.

Y

Yield: See "Rental Yield." The return on investment from a property, typically expressed as a percentage of the purchase price.

Z

Zoning: Local government regulations that determine how land can be used and developed. Zoning classifications (such as residential, commercial, or industrial) restrict what can be built on a property and may affect its value and potential for future development.