Real Estate Jargon - What does it all mean?

Acceptance
Agreement to the terms and conditions of an offer or contract.

Auction
A marketing option where you list your home without a price. The property is sold to the highest bidder on auction day, on the proviso the reserve price for the property has been met or exceeded. Note all auction bids are unconditional.

Body Corporate
A committee that manages the common property of an apartment building or townhouses, for example the gardens or foyer, including general maintenance and rubbish collection. The members are usually owners of apartments within the block.

Buyer Budget Over (BBO)
A method of marketing a property for sale. Offers are welcome to be submitted at a figure higher than the one indicated in the advertisement.

Capital Value (CV)
Also known as Government Valuation (GV) or Rating Value (RV). The valuation assessed by Quotable Value New Zealand . This is done annually in Wellington . This assessment is used principally by local authorities to calculate rates.

Caravan
Caravans are the Industry’s term for team inspections. This is where the sales staff view a property en mass.

Caveat
An official request placed on the title not to proceed with a change of ownership without notice to the person making the request.

Chattels
Items you sell with the home, i.e. carpets, light fittings, drapes, curtains etc. Any different chattels, such as glasshouse, dishwasher, etc. are noted in the contract if they are included in the sale.

Certificate of Title (CT)
A document, which shows the following: Ownership details, dimensions of the land, details of any mortgages and encumbrances (outstanding charge/liability on a property). Each individual piece of land in NZ has a CT.

Common Property
An area which is owned by all tenants of the strata property.

Company Share
Owners of these units are shareholders in a private company. The approval of the majority of shareholders is necessary if you wish to lease or sell your property.

Conditional Contract
A written contract that is signed by the seller and the buyer, but where one or more conditions need to be met, usually within a specified time period. For example “subject to the purchaser raising finance within X number of days.”

Conveyancing
The legal process involved in transferring the ownership of a property.

Deadline
When an offer is received for a property that is not being sold by closed tender all purchasers who have shown an interest in the property are notified. All other interested parties wishing to submit offers are then given a specific time period in which they too can make an offer. At the allocated time all offers that have been received, are then presented to the vendor.

Deposit
A deposit is normally paid by the buyer at the time of signing contracts. Ten percent of the purchase price is the customary deposit amount.

Due Diligence
The degree of care that a prudent person would exercise, a legally relevant standard for establishing liability. Matters that may be covered under a ‘due diligence’ clause include: valuations, builders reports, engineering reports, LIMs, rental assessments.

Easement
A limited right to make use of part of a property owned by another. For example a right of way across the property.

Encumbrance
A lien, charge, or claim on property, especially a mortgage.

Freehold or Fee Simple
A property has a clear title of ownership and is not subject to a lease and the owner has outright and unconditional disposal rights.

Government Valuation (GV)
Also known as Capital Value (CV) or Rating Value (RV). The valuation assessed by Quotable Value New Zealand . This is done annually in Wellington . This assessment is used principally by local authorities to calculate rates.

Land Information Memorandum (LIM)
Details contained on by the Local Territorial Authority (Wellington City Council) Property File relating to individual properties.

Lien
The legal right to keep or sell somebody else’s property as security for a debt.

Marketing Programme
A promotional package put together to give a home exposure to the market. It may include advertisements to be used, open days, flyer samples etc.

Mortgage
A legal document containing the terms and conditions applied to the funds (money) leant to a person (or legal entity) for the purchase of property (real estate).

Mortgagee
The lender of the funds (money) to purchase the property.

Mortgagor
The person who borrows the funds (money) to purchase the property.

Mortgage Broker
An individual who acts as a neutral party and approaches various/numerous financial institutions to secure the most favorable mortgage available that best suits your needs, whilst providing the lowest possible repayment scheme, i.e. the lowest interest rate. Mortgage Brokers as a rule do not charge a fee.

Possession Date
The date the purchaser physically takes possession of the property.

Reserve Price
The reserve price is the amount, which is set by the owner of the property prior to the Auction. After the property meets the reserve price it will be sold to the highest bidder.

Rating Valuation (RV)
Also known as Government Valuation (GV) or Capital Value (CV). The valuation assessed by Quotable Value New Zealand . This is done annually in Wellington . This assessment is used principally by local authorities to calculate rates.

Settlement
A date is set for settlement of the sale and at this point the balance of the contract price is paid and ownership of the property transfers from the vendor (seller) to the buyer.

Strata Title or Unit Title
The system of title that applies to units, apartments and some town houses. Titles are issued for each apartment and for common property, which is managed by a committee of unit owners.

Tender (Closed Tender)
A property is placed on the market with a finite date and time when all offers are presented to the vendor. A tender normally runs over a period of two to three weeks. This process usually allows ample time for all prospective purchasers to carry out any due diligence they wish.

Some companies advertise “Tender – If Not Sold Prior.” RE/MAX Leaders do not participate in these as in theory they are in theory no different to adverting the property as “Buyer Budget Over“ as an offer can be presented to the vendor at any stage.

Title
A legal document providing proof of ownership of a property.

Title Search
Usually undertaken by a solicitor on behalf of a purchaser to prove right of ownership of a property and to determine whether there are any easements, caveats or such like over the property.

Unconditional
When the conditions written into the agreement to buy a house have been met, the offer becomes unconditional. The property is now sold and both the seller and buyer must settle.

Vendor
The party (seller) who offers a property for sale.

Note: These definitions act as guide only. For further or more detailed information, please check with Tony or your solicitor.