Like any profession, the real estate industry has a language of its own. Many of these terms I’m sure you will already be aware of but there may be some you have not come across.
agreement - The written contract for the sale and purchase of property between the buyer and seller
auction - A preferred marketing option where you list your property without a price, supported by very intensive marketing leading buyers to the auction day, where they must bid against each other to successfully purchase your property in an unconditional situation.
auctioneer - Person holding an auctioneer’s license and able to conduct and call auctions.
caveat - A warning notice registered against a property title that a third party may have rights or an interest in the property.
chattels - Sometimes incorrectly referred to as fittings and fixtures. These are the removable items on a property. Chattels for sale with the property should be detailed on the sale and purchase agreement.
certificate of title - Each individual piece of land in New Zealand has a Certificate of Title which describes the type of title, its size, the name of owner(s) and any encumbrances.
CMA - Current of 'Competitive Market Analysis', is written price comparison of your property with others that are for sale or were recently sold.
commission - The fees for selling the property – payable by the seller, to the real estate company.
conditional contract - A written contract which has been signed by the seller and the buyer but has one or more conditions which need to be met, usually within a specified time period. For example, “subject to the solicitor’s approval of the title.”
conveyancing - The legal work associated with transferring ownership of the property.
covenant - A restriction or condition on a title. For example, an owner wanting to build may have to use a specified builder.
cross lease - This is where land is owned in common by more than one party and the dwellings leased from all owners. The system was established in part to avoid the costs of subdivision and pre-dates unit titles.
deposit - A portion of the purchase price paid prior to settlement of a transaction.
easement - A right to use another’s property such as for vehicle access (a right of way), or drainage (a right to drain water and sewage). An easement can be held by a neighbour or authority such as a local council, and is registered on the titles of the properties affected.
equity - The amount of value an owner has in a property. This means the resale value minus any mortgage owed.
exclusive listing - One sales consultant and their company is appointed by the seller and is responsible for managing the marketing and sale of property. All enquiries and negotiations must be conducted through the agent. Auction and tender are also forms of sole/exclusive agency. Detailed marketing programmes and buyer feedback are an essential part of sole/exclusive listings.
freehold - A freehold property has a clear title of ownership and is not subject to a lease.
general listing - Any appointed real estate agent/company can quote or sell your property. General low level of marketing and feedback. No one person is totally responsible for managing your sale.
leasehold - Sometimes land is subject to a lease. The owner of the land keases to the tenant for a fixed rental sum for a fixed period, e.g. 21, 99 or 999 years.
lim - This stands for 'Land Information Memorandum'. This is a report which you purchase from your local council containing information that they have on file concerning property, including valuation dates, rates, building and resource consents and zoning.
listing authority - A contract between the owner and the real estate company marketing the property. It details the length of the agency, commission rate and any additional costs. The type of marketing method to be used is assigned and a summary of information about the property is detailed on the Listing Authority.
marketing programme - A promotional package put together to give a property exposure to the market. It may include advertisements to be used, a calendar of dates for advertisements, open homes, buyer contact and service.
multi listing - A multi listed property is one that is on the books of more than one real estate agent. Many properties that have been multilisted have first been listed with a sole agent.
no price marketing - The price is not revealed to buyers during the marketing promotion. This type of marketing is used in Auctions, Tenders and for Sale by negotiation (NPM)
offer - A written indication from one party that they want to form a contract with the other to purchase a property. It may be conditional (with conditions attached) or unconditional.
PIM - This stands for 'Project Information Memorandum'. It is a report containing information that may affect planned construction on a site. Such matters could include contamination or drainage problems, or classifications by the Department of Conservation or the Historic Places Trust.
POA - If you see this term in real estate advertisements it means 'Price on application'. It means you need to ask for the price, which is likely to be substantial.
possession date- When the buyer gets access to and takes over the property. This usually but not always happens on the same day as settlement.
purchaser - The person, people, company or trust buying a property.
RV - rateable valuation - is the value nominal which the local authority uses to assess the rates. This used to be known as a Government Valuation and often varies from the actual current market value of the property.
reserve price - The reserve price is the minimum price the
seller will accept for their property at the auction. (Kept confidential
between the seller, listing consultant and auctioneer).
requisitions - The Sale and Purchase Agreement allows time
for the buyer’s solicitor to examine the property title. If there is a
problem with the title, or if a local authority requires special works
to be carried out, the buyer may ask (requisition) that these problems
be fixed by the vendor or they may have cause to cancel the contract.
settlement date - The date when the seller is paid the full purchase price and ownership passes to the purchaser.
sole listing - When one real estate agency has exclusive rights to sell a property for a given time.
subdivision - The division of land into sections with individual titles.
team inspection - An appointment time is scheduled with the seller for the listing agency’s team of consultants to visit the seller’ property and acquaint themselves with the property.
tender - A tender is a high profile marketing programme similar to auction, but without the auction day. Offers are submitted in writing on or before a specified day, to the seller for consideration. These offers cannot easily be withdrawn and the seller may accept, reject of negotiate with any tenderer. Any tender need not necessarily be unconditional.
title - The document or file which records the legal description of a property, its ownership, and any mortgages or other encumbrances on it.
title search - A title search, usually done by a lawyer as part of conveyancing, checks whether the seller is the legal owner of the property and whether there are any other claims on it.
unit title - A form of tenure which gives ownership of an apartment, townhouse or unit while making provision for shared ownership and administration of common areas.
unconditional - When the conditions written into the agreement to buy a property have been met, the offer becomes unconditional. The property is now sold and both the seller and buyer must settle.
zoning - Local council rules and regulations which determine land use (e.g. residential or commercial) and building density.
vendor - The person, people or company selling the property.