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Your guide to property industry jargon

Deciding to buy property is exciting, but the actual process can often be quite overwhelming. Keeping track of finances, offers, settlement dates and paperwork can take up a lot of time. Then with all the new words and terms you need to understand, the complexity can build up very quickly. But just because buying property can be complicated, there’s no reason it needs to be confusing.

We speak your language, and we’re here to help you through the process. We’ve put together this handy glossary of property lingo. Use it as a cheat-sheet to demystify the buying process.



This is the process of dividing the periodic costs associated with the property such as council rates, water rates and other charges. Calculating adjustments on settlement ensures the buyer and seller each pay for their fair share. For example, making sure that the seller pays the water bill up until the day you’re the new official owner.



The word “Caveat” literally means, “let the person beware” so, a Caveat is a warning or notice of a legal claim over a property. The existence of a Caveat will prevent a transfer of land going through unless the caveat is withdrawn OR the owner of the caveat gives their consent.


Certificate of Title

This is what proves legal ownership of property. It’s like a car registration – whoever’s name is recorded on the certificate of title is the official owner. Depending on what state you live in, your certificate of title may be a paper certificate or an electronic extract of the land title record.



Refers to items in a property that are considered personal and aren’t fixed to the structure. Usually, chattels are the objects the seller will take with them when the property is sold – things like furniture, fridges, washing machines etc. Importantly, chattels are different from fixtures. See: fixtures.



That’s what we do! Conveyancing is the work involved in the transaction or transfer of real property. Conveyancing work is completed by properly trained and experienced professionals including lawyers, licensed conveyancers and conveyancing paralegals. In every property transaction both the seller and buyer will usually have their own conveyancing team to help make sure the process is official, fair, and legally binding.


Cooling off period

This is the period of a few days after signing and exchanging contracts where you are still able to change your mind and back out of the contract. Depending on what state you live in, this could be 3-5 business days.

Important: if you buy a property at auction there is no cooling off period. Also, some sellers ask for it to be removed in the contract, so it’s a good idea to have a conveyancing team review the contract before you sign.



A deposit must be paid for a binding contract to exist. Usually, the standard deposit is 10% of the agreed price, however, sometimes a lower amount can be agreed. The deposit must usually be paid at the time the contract is dated.


Discharge of Mortgage

This is the document from your bank or lender confirming that you’ve fully paid off your mortgage. If you are selling a property with a current mortgage, you will need a Discharge of Mortgage for settlement to go through.


Electronic Settlement

Most states across Australia now offer electronic settlement as the preferred method of completing a property transaction. This is the most efficient, safe and effective way to complete the transfer of money and change of ownership in real time, removing problems that can arise with traditional paper settlements.



An encumbrance is a right held by a person affecting the property by someone who isn’t the owner. A mortgage is a form of encumbrance because the owner cannot sell without involving the mortgagee (e.g. your bank). Other types of encumbrances may impose restrictions on how you use the land. An easement is another example of an encumbrance because it may affect who has certain rights over your property. See: easement, below.



An easement is when someone else has a right to access or benefit from your property for a specific reason (or, you have right to access or benefit from someone else’s property). Common examples of easements might include a shared driveway that your neighbour uses, or a retaining wall that is supporting a boundary fence. An easement may also allow for services (such as drainage or electricity) to pass over or under a designated area of your land. If you want to be sure if your new property is affected by any easements, ask your conveyancer, they’ll be more than happy to help.



The exchange of contracts is what creates a binding agreement between the seller and buyer. The date the contract exchanges (also known as the Contract Date) is an important date used for calculating other important terms of the contract such as the Cooling Off Period, and the Settlement Date.



Different from chattels, fixtures are generally objects in a property which are attached to the structure and are usually left behind by the seller. These often include ceiling fans, ovens, or light fittings. The contract should specify which chattels and fixtures are included in the sale.


Lenders mortgage insurance (LMI)

This is an insurance against the mortgage. When a buyer doesn’t have a large deposit, their lender may require them to take out LMI to protect the lender against the financial risk.


Off the plan

This refers to buying property that is not yet constructed or created and only exists in plans. When a company plans to build a new apartment block, they will create renders and mock-ups to sell units to buyers ‘off the plan’.


Penalty interest

If settlement is delayed and the buyer is at fault, in certain circumstances, the seller can charge them an amount of interest for late completion. The rate of interest is usually set out in the contract.



The step before being officially approved for a loan is to get pre-approval. Your bank or broker will agree in principle to an amount they would be willing to lend you, and you can then use that figure to start house-hunting. It’s important not to finalise any sale until you have full approval of the amount as pre-approval is not a full guarantee of the loan.


Pre-settlement inspection

Unlike a building and pest inspection from a third-party company, a pre-settlement inspection is one that you (the buyer) do yourself. In the week leading up to settlement day it’s a good idea to check the property one last time to make sure that it is in the condition you’re expecting. This means, any requested repairs have been completed, agreed chattels and fixtures are present (or removed) and no new damage has occurred. If you find anything wrong, contact your conveyancer immediately so they can make sure it is resolved before settlement.


Reserve price

This is the price the seller has decided is the lowest price they’re willing to accept for a property. It helps to give buyers an idea of how much to offer if they want their offer to be considered and accepted.



Sometimes referred to as “Completion”, this is the day when everything gets finalised. The buyer hands over the money and the seller hands over ownership. If you’re buying to live in the property, this is the day you get to move in, and the day the seller must be out by.


Statement of adjustments

Is a document that sets out specific costs that are divided between the buyer and seller (see: Adjustments). These could include land rates, water rates, and more. The statement of adjustments sets out who is responsible for which cost to make sure they are divided fairly.


Subject to building and pest inspection

This refers to a specific clause in the contract. If, after signing the contract, you get a building and pest inspection that shows significant damage or pest infestation, you may be able to back out of the contract. It’s important to talk with your conveyancing team to find out what your rights are, and to make sure your contract is subject to a satisfactory building and pest inspection.


Subject to finance

Similar to a subject to building and pest inspection clause, this clause, if included in the contract, means the contract only becomes binding if your lender approves your loan application. This can be a very important clause for contracts. Without it, in a worst-case scenario, you could be denied a mortgage but still be bound to buy the property. This could result in you losing the full deposit amount and having to pay additional fees if you are unable to settle. If you’re worried or unsure, make sure to talk to your conveyancing team about including this in the contract.



This refers to a contract that is not subject on anything happening, such as a cooling off period, finance approval or pest and building inspections. Once a contract goes unconditional, neither party has any rights to withdraw.


VOI – Verification of Identity

Proving your identity is now required in every state and territory of Australia when completing any property transaction. You will be asked to have your identity verified with an identity verification agent and you will need to produce important identifying documents such as your passport, drivers licence and other things.


This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.

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