Our Jargon Buster aims to provide simple, plain English explanations of typical words and phrases used in the real estate industry. This information is updated regularly to keep it relevant.
Appraisal
An appraisal or price appraisal is the estimated market value of your property in the current market, typically undertaken by a real estate agent. You can also get independent professionals, such as a buyer’s agent, to provide a property appraisal. This is different to a more formal property valuation which is done by a licensed property valuer (view term definition further down).
Building and Pest Inspection
A building and pest inspection is crucial before finalising the purchase of a house in QLD. Building inspections are performed by licensed building Inspectors look for issues like cracks in walls, rust, dampness, mould, and potential plumbing or electrical problems. Pest inspectors look for evidence of pest (i.e termite) activity
Buyers Agent (BA)
A buyers agent is a licensed real estate professional who represents only the buyer in a real estate transaction. Providing advice, locating properties, and negotiating purchases on behalf of the property buyer without any conflict of interest from selling side.
Capital Gains Tax or CGT for short
This tax is payable on the financial gain made from the sale of an investment property, calculated as the difference between the final sale price and the original purchase price.
Cooling Off Period
This is a period after the contract is signed, during which time the purchaser has a legal right to terminate the contract without reason. The cooling off period for a standard legal property contract of sale in QLD is 5 days. Unless the cooling off period has been waived or the property has been bought at auction where there is no Cooling off period. If a contract is cancelled within this cooling off period the buyer will pay a penalty of 0.25% of the property purchase price.
Counter Offer
This happens when a prior offer to buy or sell a property is unacceptable by one side of the translation. In return rather than just declining the offer. The party who has declined the offer will come back with a proposed ‘Counter offer’ that has more suitable price, terms or conditions in order to hopefully come to an agreement.
Date of Settlement
This is the final day whereby the buyers and the sellers exchange. The buyer takes possession of the property and the seller takes possession of the agreed amount in exchange for the property.
EOI (Expressions of Interest)
An EOI is a process where usually a agent asks potential buyers to register their interest in a property before a specified time.
FIRB Approval (Foreign Investment Review Board)
Regulates acquisitions by ‘foreign persons’ when attempting to buy Australian property and businesses.
KDRB (KnockDown ReBuild)
KDRB refers to demolishing an house to build a new one in its place. (KnockDown ReBuild)
Lender’s Mortgage Insurance (LMI)
LMI is a non-refundable, one-off insurance fee added to home loans that are approved with a low deposit. Usually this is paid where more than 80% of the home’s value is borrowed.
Loan to Value Ratio (LVR)
LVR is your loan amount relative to the value of your home. For example, a $500,000 home loan on a $1,000,000 property equals a 50% LVR.
Multiple Offer Scenario
This occurs when multiple offers from different parties are made on a property at the same time, often in a seller’s market. This scenario can get complicated. Contact us if you would like to find out more about this.
Off The Plan (OTP)
Signing a contract to purchase a property that has either not been built yet or is still under construction and not yet completed.
Off-Market
Off-market properties are those that are for sale discreetly, often without public advertising.
Pre-Approval
Being pre-approved for finance means you have been pre-approved by your financier for a specific loan amount with conditions. Once an offer is made to buy a property your financier will progress this finance application from a pre-approval to a full approval in preparation for settlement.
Property Valuation
This is done by a licensed property valuer. Usually it is organised by the financier of a property purchase in order to satisfy the financier that the property they are financing holds the monetary value of the purchase price on the contract of sale.
Unconditional
When all the conditions in a contract of sale have been met, and both parties are legally obligated to settle of complete the transaction.
Vendor
The Seller (Owner) of the property.
Vendor Bid
A vendor bid is an bid at auction given by the auctioneer on behalf of the vendor during an auction. This can happen at any time during the auction.
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