Like any industry, real estate has its own particular brand of jargon which is useful to know when you embark on a first home buying journey.
Many of the terms may be related to legal aspects of the property purchase, but it helps to know what is being referred to when in discussions with real estate agents.
Last month we looked at a selection of terms (A-K) from Aussie’s Jargon Buster Guide. Here we look at the remaining essential terms (L-Z) that it pays to know before diving into the house buying process.
LVR: Abbreviation for the term Loan to Value ratio. It is the percentage of the loan amount compared to the value of that property. So if a house is worth $160,000, and the mortgage is $100,000, then the LVR is 62.50%. Most lenders require a borrower to take out Lender’s Mortgage Insurance if the LVR is 80% or more.
Passed in: A property is ‘passed in’ at auction if the highest bid fails to meet the reserve price set by the seller.
Reserve price: At an auction, this is the minimum price acceptable to the seller of a property.
Searches: Research carried out, prior to the settlement of the property, to confirm information about the property. Searches are usually arranged by a solicitor.
Stamp duty: A State Government tax based on the purchase price of the property. It’s also payable on mortgages in some states. Each state and territory has different rules and calculations. To estimate the amount of stamp duty you may have to pay, use our stamp duty calculator.
Strata title: The most common title associated with townhouses and home units. It acts as evidence of a unit’s ownership. In a strata plan, individuals each own a small portion of a strata building such as a unit – which is identified as ‘lot’ on the title. All owners in a strata plan share common property such as external walls, windows, roof, driveways, foyers, fences, lawns and gardens.
Title deed: Document disclosing the legal description and ownership of a property.
Title fees: Charged by a state or territory’s Titles Office for title searches, property ownership transfers, the registration of new mortgages and the discharge of old ones.
Transfer: A document registered with the Titles Office that confirms the change of ownership or a property.
Valuation: A professional opinion of a property’s value.
Zoning: Statutory descriptions of the allowable uses of land as set out by local councils or planning authorities.