Do you feel like you’re drowning in real estate lingo? You’re not alone, so don’t worry. The real estate industry is filled with phrases that can be confusing, and not understanding them could cost you money. Let’s break down some of the key terms used in the real estate world that every buyer needs to know.

An appraisal is an evaluation of a property’s market value, usually done by a professional appraiser. It’s essential in determining the value of a home, particularly for mortgage lending purposes.

This document provides important information regarding whether a house will be auctioned, the agent’s commission, and the exclusive period during which the agency has the sole right to sell the house before another agent can be engaged.

Also known as an owner’s corporation, this refers to the management of a connected group of homes, such as an apartment building or townhouse complex. It usually includes fees for insurance and maintenance of common property.

A lump sum paid by tenants at the start of a lease, held aside to cover any damage they cause or missed rental payments.

Parts of a unit complex that are jointly controlled by all owners, including driveways, paths, and gardens.

A period during which buyers can change their minds for private sales. This varies by state, and some states don’t offer a cooling-off period at all. Unconditional sales do not have a cooling-off period.

Also known as chattels, these are easily removed parts of a home that might not be included in the sale, like a fridge or washing machine.

Built-in features that will be included in the purchase, such as an oven.

A person who provides a financial commitment to back a loan, helping a buyer—usually a first-timer—avoid lenders mortgage insurance.

When an investment property costs more to maintain than it generates in rent. This can be used to reduce the amount of tax an investor pays.

A lender’s indication of what they are willing to lend a buyer before they purchase. This is not final loan approval, which only occurs after an offer is made and an independent valuation by the bank is completed.

The date when the balance of a home’s purchase price is due, and the title or deed changes hands. Offering to match a vendor’s preferred settlement date can make your offer more attractive without increasing your bid.

Also known as land transfer duty, this is a government tax charged on the purchase of a property. It can cost tens of thousands of dollars but varies by state and the price of the home. It can sometimes be waived or reduced for first-home buyers.

Navigating the real estate market can be challenging, but knowing these basic terms can help you speed up the process and avoid unexpected costs. At Create Real Estate, we’re here to assist you at every stage of the house-buying journey. Whether you’re an experienced investor or a first-time buyer, our team of professionals is ready to help. Visit our website, contact one of our agents, and let us confidently assist you in finding the property of your dreams!