Appreciation – An increase in the value of a property

Capital gains – The profit on the sale of capital asset, such as a house.

Consumer Price Index (CPI) – An index measuring the prices at various times of a selected group of goods and services which typify those bought by ordinary Australian households.  It allows comparisons of the relative cost of living over time, and is used as a measure of inflation.

Diversification – The spreading of investment funds among classes of securities and localities in order to distribute and control risk. This is a fundamental law of investing, meaning simply: Don’t put all your eggs in one basket.

Negative gearing – When the earnings from an investment property are – in the short-term, at least – less than the costs associated with the investment. The shortfall can be used to reduce tax liability in Australia, for now.

Lower Quartile – the price point below which 25 per cent of sales were recorded. If there were 100 sales in a suburb, the 25th lowest price would be the lower quartile price.

Median Price – the median house price is the middle price of all sales recorded in a particular suburb, postcode, city or state. If there were 100 sales in a particular suburb, in ascending order, the median would be number 50 on the list. It’s commonly assumed that the median price is the same as the average price, but that’s not the case. To calculate the average, you would add up the 100 sales and divide the total by 100 (the number of sales) and the number could be quite different to the medium.

Property Cycle – property values usually follow a cycle of growth, a slowdown and an upturn. History shows this occurs every seven to ten years.

Yield – The annual rental income of an investment property, expressed as a proportion of the property’s value.

Asking Price – The price of a property that a owner may be willing to negotiate at.

Assignment – The transfer of property from one person to another.

Auction – The selling of any property in public by a licensed auctioneer endeavouring to persuade buyers to make offers until it is knocked down to the highest bidder.

Body Corporate – The administrative body made up of the registered proprietors of the units that handle administration and upkeep of the property.

Building inspection – An inspection generally carried out prior to the purchase of a property to ensure the building is structurally sound. Contracts of sale can be made subject to the satisfactory building inspection.

Building regulations – Legal or statutory rules set up by a local council to control the manner and quality of buildings in it’s jurisdiction. The rules are generally designed to ensure public health and safety as well as acceptable standards of construction.

Counter Offer – A new offer, made after a previous offer has been rejected by the owner.

Cooling Off Period – Refers to the time during which a buyer can terminate the contract. This differs from state to state and in Western Australia there is no cooling off period at all. It was introduced to allow buyers to quickly make an offer and secure the property before seeking legal advice, financial approval or undertaking a professional property inspection.

Conveyance – The transfer of property ownership and changing the title of a property from the seller’s name to the buyer’s name.

Fittings – Items in a home that can be taken out without damaging the items or the space in which they were located. Includes washing machines, refrigerators and other items not usually included in a property sale.

Fixtures – Items fixed to a property in a way that would damage the item or the structure of the property if they were to be removed, such as built-in shelving or carpets. Usually included in the sale of a property.

Off the Plan – Purchasing a property before completion and from a plan.

Offer – The price conveyed by one party to another to form a contract.

Private Sale – The owner selling the property without an estate agent.

Private Treaty Sale – The owner selling the property utilising the services of an estate agent.

Reserve price – The lowest price a vendor has agreed to accept.

Settlement date – The date on which a property sale is finalised. The purchaser pays the vendor and gains possession of the home at this time.

Title – The type of property ownership, for example Torrens title, strata title or company title.

Zoning – An urban planning tool used by local governments to determined how land is to be used. Examples include low density residential, high density residential, mixed use and metropolitan centre.

Break costs – Penalty charges for ‘breaking’ or ending a fixed term loan before the agreed date.

Covenant – Restrictions placed on the title; these invariably can affect future plans with the property.

Commission – The fee or payment made to a real estate agent for services.

Exchange of Contracts – The legal process that creates a binding agreement for the sale of a property. A deposit is usually paid at this time, and may be forfeited if either party backs out of the agreement.

Exclusive Listing – When a vendor has signed an agreement to make an agent solely responsible for the sale of a property during a specified period. If another agent sells the property during that time, the original agent is entitled to any commission.

Guarantor – Someone who agrees to fulfil a contract if the main party to the loan defaults.

Reverse mortgage – A type of mortgage, usually used by older homeowners, where repayments don’t need to be made until after the property is sold, or the last homeowner dies.

Power of Attorney – The person who has the capacity or authority of another party to act on their behalf.

Strata Title – A title used for units and townhouses.  It gives the owner ownership of a defined part of the building including air space as well as membership to the owners’ corporation.

Stratum Title – Different to a strata title in that the owner purchases a shareholding in the company that manages the common area.  Lenders sometimes can be reluctant to lend more than 80% of the property value.

Transfer – Document registered at the Land Titles Office recording entries of change of ownership.

Trustee – Legal term referring to the holder of property on behalf of another.

Building Approval – The number of dwellings approved to be constructed in a given month, quarter or year.

Final Inspection Report – A certification issued by a local council or building inspector that building works for a home are complete and the home is ready to be lived in.

Right of Way – A person may have a right to cross your property to gain access to his/her own property or there may be a public pathway across the land.

Square – An old imperial unit of area measurement. 1 square = 10 feet x 10 feet in area, which in metric measure is equivalent to 9.29m².

Strata Title – System of land title based on the horizontal sub-division of air space whereby all the owners combined own the land, but have absolute right to sell / transfer their strata-titled property to a new owner. The most common form of strata title is a home unit.

Subdivision – A parcel of land divided into individual lots.

Urban Renewal – The process of rehabilitating urban (city) areas, by demolishing, remodelling or repairing existing structures and buildings, public buildings, parks, roadways and individual areas on cleared sites in accordance with a more or less comprehensive plan.