It’s easy to get lost in the lingo of property investment. Caveat Emptor, equity, fittings & fixtures are just a few of the terms that can bamboozle the uninitiated. The list below contains some of the key terms you need to know. A very thorough list of real estate terms is here http://reia.asn.au/wp-content/uploads/2017/10/Glossary-of-terms-Fact-Sheets.pdf, at the Real Estate Institute of Australia website.
REAL ESTATE TERMS
This is the aim of property purchase – an increase in the value of the property.
A caveat appears on a property title to declare that a party other than the owner may have an interest in the property. This would be lodged at Land Use Victoria.
This is a Latin phrase to indicate “buyer beware”. Put simply, if you buy a property, the risk is yours – you need to do the research.
What you hope doesn’t happen with your property purchase – a decrease in the value of the property.
These are the costs incurred by a real estate agent in selling a property. They are normally passed on to the property owner, and can include photography and advertising costs. It is very important to get a clear idea of these costs before signing a contract with the real estate agent.
This is the difference between what your property is worth and how much you still owe on the property. If the property is valued at $600,000 and you owe $150,000, then the equity is $450,000. Equity is often used as a means to help buy an investment property.
Exchange of contracts
This is the part of the sale of a property when it becomes a binding agreement. It is a legal process that usually includes paying a deposit, which could be forfeited if either party backs out of the agreement.
Fittings are the items in a house that can be removed without damage – to the items themselves or the area in which they were placed. This usually includes household items that are not included in the sale of the house, such as the fridge, washing machine or mirrors.
Basically, fixtures are the opposite of fittings. It is any item ‘fixed’ to the house that if it was removed would damage the item itself or the area in which the item was placed. This might include kitchen units, carpet, the oven and light fixtures. Fixtures are usually included in the sale of a property, but if you are unsure it is wise to check prior to the sale.
The reserve price is the lowest price the person selling the property (the vendor) has agreed to accept.
This the date on which the sale of a property is finalised. At this point, final payments are made and you get possession of the property.
Property ownership within a group of properties (e.g. units, flats)
The refers to the type of property ownership you will have. A Torrens title is the name for ‘Common Law Title’ in Australia. Other examples are strata title or company title.
The person selling the property.
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