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Real Estate Glossary Terms
Real Estate Glossary Terms
A lot or block subdivided from a larger portion of land.
To repay a mortgage with regular payments that cover both Principal and Interest.
A written analysis of the estimated value of a property prepared by a qualified appraiser.
Anything of monetary value that is owned by a person, eg: personal property, bank accounts.
A public sale of a property or real estate that is sold to the highest bidder when the owner’s reserve is reached
An administrative body made up of all the owners within a group of units or apartments of a strata building. The owners elect a committee, which handles administration and upkeep of the site.
Breach of Contract
Breaking the terms of a contract.
A type of construction in which a structural timber frame is tied to a non-load bearing, single-brick external wall.
A short term loan (usually at a higher rate) taken out to cover the financial gap between buying a new property and selling an existing property.
Local Council regulations that control design, construction and materials used in construction.
The gain on the sale of a capital asset.
The gain on the sale of a capital asset.
A Latin phrase for “Let the buyer beware”, i.e.: the onus is on the buyer to be satisfied with any item before purchasing.
Certificate of Title
A description of a property with the name of the registered owner, encumbrances, i.e.: mortgages or easements on the property. It must be produced by the vendor before the sale of the property.
Moveable and removable items of personal property. In real estate transactions, chattels included in the sale usually include the stove, television aerial, carpets, blinds, curtains, drapes and light fittings. However, unless chattels are specified in the agreement, they are not sold as part of the property.
A proportion (usually a percentage) of the sale price of a property paid to a real estate agent for negotiating a real estate transaction.
Area of building, land or amenities within a strata title property that are shared by all owners, eg: a driveway.
A company owner has a certificate of title and the owner automatically becomes a member of a company that administers, manages and maintains the property in which the owner’s flat is registered. The Directors of that company are elected each year at the Annual General Meeting from owners involved only with that company, i.e. owners in that block.
An agreement in writing setting out the terms and conditions relating to the sale or purchase of a property.
Contract of Sale
An agreement in wiring setting out the terms and conditions relating to the sale or purchase of a property. It is the purchase document signed at auction.
The legal process of transferring the ownership of a property and funds. In New Zealand this is usually done by your solicitor.
Terms, conditions and restrictions noted on the title. A covenant may affect future plans or resale of the property.
A percentage of the purchase price given to bind the sale of real estate.
A decline in the value of property due to changes in market conditions or other clauses.
A cash expenditure for the purpose of settling a debt.
A right that someone has to use the land belonging to another, eg: a water authority may have a sewerage easement across part of your property.
Part of a house or establishment illegally overhanging the street or a neighbour’s property.
An impediment to the use or transfer of the property in the form of an interest or right in the property.
The amount of an asset actually owned, Equity is the difference between the market value of the property and the amount still owed on its mortgage.
Any item that is specifically not included in the sale. e.g. An above ground pool, garden shed, etc.
FirstHome is home ownership initiative which helps eligible buyers to afford to buy selected properties Housing New Zealand is selling across the country.
Fixed Rate Mortgage
A mortgage in which the interest rate does not change during the term of the loan.
Fixtures (or Fittings)
Fixed items that cannot be removed without damaging either the property or the fixture itself, eg: cupboards.
An estate in real property which continues for an indefinite period of time. Freehold estates may be inheritable or non-inheritable. Inheritable estates include the fee simple absolute, the qualified fee, and the fee tail. Non-inheritable estates include various life estates which are created by acts of parties, such as an ordinary life estate, or by operation of law.
If someone has agreed to sell you a property and then sells it to someone else for a higher price, you have been gazumped!
Goods and Services Tax (GST)
A tax of 15 per cent levied on the final price of some goods or services.
Lights, curtains, blinds, ceiling fans, airconditioning units, flyscreens, TV antenna, dishwasher, rangehood, stove, fixed cupboards, clothes hoist or any other removable item that the vendor has agreed will be included in the sale.
The fee charged for borrowing money.
A loan where only the interest is repaid throughout the course of the loan. The original amount is repaid at the end of the term of the loan, rolled over by the same bank or the owner re-mortgages.
List of items included with a property for sale; usually furniture, furnishings and other removable items.
A property that is not occupied by the owner, but provides a return to the owner through letting or leasing to a tenant.
A form of co-ownership that gives each tenant equal shares and rights in the property including the right of survivorship, e.g: ownership of a property passes to the surviving owners.
A person who rents property to another, a lessor. A property owner who surrenders the right to use property for a specific time in exchange for the receipt of rent.
You buy the right to own the home and lease the land for a certain time. You pay rent to the landlord for the land. You can sell the lease if you want to move on. There may be restrictions on your use of the property.
A person leasing a property.
A list of debts owned.
LIM Report (Land Information Memorandum)
A LIM is a report prepared by the local Council at your request. It provides a summary of property information held by the Council as at the day the LIM was produced.
A LIM provides some or all of the following:
Information on special land features or characteristics including potential erosion, avulsion (removal of land by water action), falling debris, subsidence, slippage, alluvion (the deposition of silt from flooding), inundation (flooding), presence of hazardous contaminants which are likely to be relevant to land and is known to Auckland City
Information on private and public stormwater and sewerage drains as shown in Auckland City's records
Information relating to any rates owing in relation to the land
Details of approved building, plumbing/drainage and resource planning permits and consents indicating where further action is required
As required by the Building Act 1991 details are included of
Code Compliance Certificates: a final certificate of approval for building consents
Compliance Schedule: required for certain systems or features of commercial and multi-residential properties
Warrant /Statement of Fitness: in conjunction with compliance schedule -issued annually to maintain compliance standard
Details of Dangerous Goods, Liquor, Hairdressing and Health Licences (mainly refers to commercial properties)
Details of Operative and proposed zoning, road widening, height restrictions, view and tree protection, and any Historic Places Trust listing
Any outstanding requisitions or notifications from Auckland City regarding any matters on that property that do not meet Auckland City specifications and which require action within a certain time frame. Satisfying requisitions is the responsibility of the owner of the property.
A sum of borrowed money that is generally repaid with interest.
The last day of the term of the home loan agreement. The home loan must then be paid in full or the home loan agreement renewed.
A legal document that pledges a property to the lender as security for payment of a debit.
The lender in a mortgage agreement.
The borrower in a mortgage agreement.
Where the return on an investment is not sufficient to cover the costs on the investment, eg: property maintenance and interest on the loan against income from letting/leasing.
Is the income on your property less certain expenses such as rates, insurance, maintenance and body corporate levies.
Off the plan
To purchase a property before it is completed after having only seen the plans.
Offer to Purchase
A formal legal agreement which offers a specified price for a specified property. The offer may be firm (no conditions attached) or conditional (certain conditions apply).
Old System Title / Common Law Title
Another old form of land title and also known as Common Law Title. Automatically converted to Torrens Title on the sale of a property.
Wall separating two adjoining buildings and normally straddling the boundary.
This shows the ground plan design, elevation of house, number and size of rooms, kitchen, bathrooms and laundry layout, position of the house on the land.
The amount borrowed or still to be repaid. The part of the monthly payment that reduces the balance of the mortgage.
The sale of property by the owner without the services of a real estate agent
Private Treaty Sale
The sale of property, through a real estate agent, by negotiation.
Insurance policies that may cover properties, house contents, landlord, etc.
Requisitions on Title
A process where the buyer requests additional information about the title of the property from the vendor.
The minimum price which a seller will accept at auction.
Right of Way
A right of one property or the general public for access to or across another property.
Rise and Fall Clause
This clause may be contained in a building contract. It provides for an upward or downward contract price which correlates to the movement of prices, wages or other factors specified in the clause.
The property that is pledged as collateral.
Also called Duplex. A type of construction where two buildings are attached together by a common wall.
The sale of a property is finalized by the legal representatives of the vendor and the purchaser, mortgage documents come into effect, costs are paid and the new owner takes possession of the property and receives the keys.
One agent or agency has the exclusive rights to market a property.
A member of the legal profession qualified to deal with conveyancing.
New Zealand is an investment friendly country with no stamp duty.
A title to a unit or lot on a plan of subdivision associated with townhouses, units and blocks of flats and based on the horizontal and vertical subdivision of air space. Owners have a certificate of title, are absolute owners of a freehold flat and have an undivided share of the common property.
This title gives you legal ownership over a piece of property and also gives you a share in the company set up to look after the common areas of the flats or units you live in. It does not include ‘air space’.
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
A Tenancy Agreement is a legal contract between the tenant and landlord agent. This covers the amount of rent to be paid, the method of payment, term of the agreement, security bond amount and other conditions and rules.
There are two types of tenancy agreements:
A Fixed Term agreement is for a set period of time. Even though the agreement will have an end date, it is still necessary for the tenant to give notice in writing, or in the case of the landlord, to give a ‘Notice to Vacate to Tenant/s of Rented Premises’ when a tenant is required to leave at the end of the agreement.
A Periodic Term agreement is set from week-to-week, or month-to-month. In the case of neither the tenant nor landlord giving notice to end the fixed term agreement, the agreement automatically becomes a periodic tenancy agreement
A person who occupies land or property rented from a landlord.
Tenants in Common
A type of joint tenancy in a property where two or more purchasers own a property in unequal shares. If one dies, his or her shares pass to his or her beneficiaries under the terms of the will. The shares can be sold without consultation of the other owners.
A check of the title records to ensure that the seller is the legal owner of the property and that there are no other claims or outstanding.
Is the standard certificate recognising land owned by the person registered on that document.
A dwelling unit, generally having two or more floors and attached to other similar units via party walls. Can be Strata or Cross lease titled.
A document registered at the Land Titles Office and noted on the Certificate of Title which verifies the change of ownership of a property.
Property free of covenants or other restrictions.
A written analysis of the estimated value of a property prepared by a qualified valuer.
Variable Interest Rate
A floating interest rate, also known as a variable or adjustable rate, refers to any type of debt instrument, such as a loan, bond, mortgage, or credit, that does not have a fixed rate of interest over the life of the loan.
The person or entity legally authorised to sell a property.
In New Zealand the term "villa" is commonly used to describe a style of wooden weatherboard house constructed before WW1 characterised by high ceilings (often 12 ft), sash windows, and a long entrance hall.
Local authority guidelines for the permitted use of land.
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