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Learn The Lingo

Learn The Lingo

Don’t be baffled by the real estate business’s technical expressions and jargon.  Avoid confusion and misunderstandings by swotting up on what those terms mean.

  • Adjustment

How property expenses such as council rates or water charges are divided up between buyer and seller.

  • Approved Guides

Your real estate agent must legally give you these consumer guides.  One is about the contract you make with your agent, and the other is about the

Residential Property Sale and Purchase Agreement Guide

Residential Property Agency Agreement Guide

  • Agreement

The written contract for the sale and purchase of property between the seller and the buyer.  In full, it is an agreement for the sale and purchase.

  • Caveat

A warning notice registered against a title that a third party might have a right to or interest in a property.

  • Chattels

Removable items on a property, such as curtains or a fridge.  Chattels for sale with the property should be detailed on the sale and purchase agreement.

  • Commission

The agent’s fee, usually charged as a percentage of the price.

  • Conveyancing

The legal work associated with transferring ownership of property.

  • Covenant

A condition or restriction on a title.  This may say, for example, that an owner may not build something that would obscure a neighbour’s view, or keep a noisy dog in the subdivision.

  • Cross Lease

This is where a property is owned in common by more than one homeowner.  The system was established to avoid the costs of subdivision and predates unit titles.

  • Disbursement

A cash payment to meet out-of-pocket expenses incurred by a lawyer on a client’s behalf

  • Deposit

A portion of the purchase price, maybe 10 per cent, paid when an agreement for sale and purchase is made.

  • Easement

A right to use another’s property, such as for vehicle access (a right-of-way), or drainage.  An easement can be held by a neighbour or authority such as a local council.

  • Equity

The amount of value an owner has in a property.  This means the resale value minus any mortgage owed.

  • LIM

Land Information Memorandum, a report purchased from your local council containing information it has on file concerning the property, including valuation data, rates, building and resource consents and zoning.

  • Mortgagee

One who lends money secured against a property

  • Mortgagor

One who borrows money secured against their property.

  • Multi-listing

A multi-listed property is one that is on the books of more than one real estate agent.  Many properties that are multi-listed have first been listed with a sole agent.

  • Offer

An indication from one party that it wants to form a contract with the other.  It may be conditional (with conditions attached) or unconditional

  • PIM

Project Information Memorandum, a report containing information that may affect planned construction on a site.  Such matters could include drainage problems or classifications by the Department of Conservation, or the Historic Places Trust.

  • POA

This term, seen in real estate advertisements, means price on application.  It means you need to ask the real estate agent what the price is.

  • Possession

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 or company buying a property.

  • Reassignment of insurance

When a policy or claim is transferred to the new buyer, more common since the earthquakes.

  • Reserve

The minimum price the seller will accept at auction.

  • RV

Rateable Valuation, or the value assessed by a valuation agency which the local authority will use to assess the rates.  This used to be known as a Government Valuation.

  • Second Mortgage

A mortgage where the lender has second claim on the proceeds of the property if the borrower stops paying.  The interest rate will be higher

  • Settlement

When the property is paid for in full.  This is done on the settlement date, which is agreed between the buyer and seller.

  • Sole listing

When a real estate agent has exclusive rights to sell a property for a given period of time.

  • Subdivision

The division of land into sections.

  • TC1, TC2, TC3

In and around Christchurch, these are the technical classifications (also known respectively as green-grey, green-yellow and green-blue) imposed by the authorities.  The higher the number, the more the land is considered prone to damage in quakes

  • Title Deed

The document which records the legal description of a property, its ownership, and any mortgages or other incumbrances 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.

  • Vendor

The person, people or company selling the property.

  • Zoning

Council rules determining land use.