Real estate has a language of its own, and if you’re new to buying, selling, or investing, the jargon can feel overwhelming. From legal terms to financial phrases, it’s important to understand the key words you’ll encounter along your property journey.
Here are some of the most common terms explained.
An appraisal is a report that includes an estimation of the sale price of a property. It is compiled by real estate agents, often free of charge.
Key difference: Unlike valuations, appraisals cannot be used in a court of law if there is a dispute.
Capital Gains Tax is payable when a property is sold. It’s based on the difference between the original purchase price and the sale price, including costs such as renovations, improvements, and selling expenses.
A dwelling is simply another word for home.
This type of loan requires borrowers to pay only the interest for a set period, with the principal amount remaining unchanged until later. It can reduce repayments in the short term, but the full loan balance will eventually need to be repaid.
The LVR is the value of your loan as a percentage of the property’s value.
Example: A $400,000 loan on a $500,000 property has an LVR of 80%.
Buying a property “off the plan” means signing a contract for a property that hasn’t yet been built. Buyers rely on floor plans and renders, with the finished product delivered once construction is complete.
A valuation is the definitive value of a property, carried out by a qualified valuer for a fee. It is based on comparable sales in the area and is often required for finance, legal matters, or estate settlements.
Key difference: Unlike appraisals, valuations can be used as evidence in court to resolve disputes.
Understanding real estate jargon empowers you to make informed decisions and navigate the property process with confidence. Whether you’re a first-home buyer or a seasoned investor, knowing these terms can help you read listings, speak to agents, and approach negotiations like a pro.
📩 Got a term you’re unsure about? Our team at Richardson & Wrench will happily decode it for you.