The A-Z of Real Estate

The A-Z of Real Estate

Pop in and talk to one of our Real Estate specialists who can help talk you through all of the confusing jargon used is every day Real Estate! Here are a few to get your started…


Appraisal – An appraisal, or Comparative Market Appraisal (CMA) is an examination of the prices at which similar properties in the area recently sold. Used to help determine a suitable selling price for a property and a requirement under the Real Estate rules before obtaining a listing. jargon

Auction – The fast-paced, public sale of a property, sold to the highest bidder when the reserve is reached.


Boundary – The lines that define the perimeter of a property

Building Code – All building work in New Zealand must comply with the Building Code, even if it doesn’t require a building consent. This ensures buildings are safe, healthy and durable for everyone who may use them. The Building Code is contained in regulations under the Building Act 2004.

Buyers Agent – A real estate salesperson who represents only the buyer of a property in a real estate transaction. You can find out more our our Buyers Agency here.


Capital Gains Tax – A tax levied on profit from the sale of a property or capital asset. This is currently a hot topic in New Zealand. Come and chat to one of our sales team to find out what it could mean for you and your investments.

CCC – A code compliance certificate is a formal statement issued under section 95 of the Building Act 2004, that building work carried out under a building consent complies with that building consent.

Chattels – Moveable and removable items of personal property. Usually include the stove, television aerial, carpets, blinds, curtains, drapes and light fittings. Unless specified in the agreement, chattels they are not sold as part of the property.

Commission – A proportion (usually a percentage) of the sale price of a property paid to a real estate agent for negotiating a real estate transaction.

Covenant – Terms, conditions and restrictions noted on the title. A covenant may affect future plans or resale of the property.


Depreciation – A decline in the value of property due to changes in market conditions or other causes.


Easement – A right that someone has to cross or otherwise use the land belonging to another, e.g: a water authority may have a sewerage easement across part of your property.

Equity – The amount of an asset actually owned. Equity is the difference between the home’s fair market value and the outstanding balance of all mortgages on the property.

Exclusive Listing – A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time.


Foreclosure – a legal process in which a lender (e.g. a bank) attempts to recover the balance of a loan from a borrower who has stopped making payments, by forcing the sale of the property used as the collateral for the loan.

Freehold – Otherwise known more correctly as “fee simple”. Outright ownership of the property and land on which it stands. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limit to his period of ownership


Guarantor – A person who agrees to indemnify the holder of a loan all or a portion of the unpaid principal balance in case of default by the borrower.


Home Inspection – A thorough inspection that evaluates the structural and mechanical condition of a property.


Interest – A percentage of a loan paid by the borrower to the lender in addition to the principal repayment. This is effectively the fee charged for borrowing money.


Joint Tenancy – A form of co-ownership that gives each tenant equal shares and rights in the property including the right of survivorship (the share of each passing to the other or others on death).


Leasehold – You own the buildings and any other improvements on the site, but you lease or rent the land from a land owner

LIM – A Land Information Memorandum (LIM) is a factual report summarising information that the council hold on a particular property. This will include approved building and resource consents, land hazards and utility information if known, current rates and rating valuation, District Plan information, heritage or archaeological items and other useful information about the property.


Market Value – The price at which a seller is happy to sell and a buyer is willing to buy.

Mortgage – A mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full.


Negative Gearing – Where the return on an investment is not sufficient to cover the costs on the investment. Investors can currently offset losses so that they pay tax against a smaller income. The Government has announced the practice of negative gearing on investment properties will end in 2019.


Ombudsman – Ombudsmen are independent and impartial. They investigate complaints that haven’t been solved by the organisation complained against. The Banking Industry Ombudsman is the avenue through which a customer can make a complain about their bank and have it dealt with independently.

Offer – Conveyed intent by one party to form a contract, which may have conditions and stipulations, with another party.


PIM – A Project Information Memorandum (PIM) is a report prepared by the council that contains information about a property like special features of the land and existing utility services. ​A PIM will also provide early notification of other required approvals such as resource consents, Historic Places Trust approvals and development contributions, if they apply.

POA – meaning Price on Application. An acronym used in place of a price when advertising a property for sale, enticing enquiry.


Qualified Buyer – A buyer who’s financial situation,  needs and wants are a match for the property they would like to view.


REA – The Real Estate Authority (REA) is the New Zealand Crown entity responsible for the regulation of the New Zealand real estate industry as well as the agents within it. jargon

REINZ – The Real Estate Institute of New Zealand (REINZ) is a membership organisation representing more than 14,000 real estate professionals nationwide. REINZ specialises in all facets of real estate including residential sales, rural, auctioneers, business brokers, commercial and industrial sales and leasing and residential property managers.

Resource Consent – Resource consents are required when a group or individual wishes to carry out an activity or development that may have some effect on the environment. Resource consents relate directly to the rules set out in the District or Regional Plans and the Resource Management Act and are different to Building Consents.


Subdivision – Dividing a parcel of land into one or more parcels of land, often for a housing development.


Tender – A process of selling, calling for purchasers to make their best offers in writing for that property by a given date.

Trust – A trust is created when a person (settlor) gives property to another person (trustee) to hold for the benefit of a third person (beneficiary). A trust is a legal way to hold and protect your assets for the future. A document called the trust deed is the set of rules for the operation of the trust.


Unconditional Agreement – The legal contract that binds both the purchaser and the seller to settle on the agreed date at the agreed price. You should only consider entering an unconditional agreement if and when you are absolutely sure you want to buy a particular property and you already have the full purchase price or ‘pre-approved’ loan finance from a lender. An unconditional agreement commits you to purchasing the property.


Vendor – The person (or entity) legally authorised to sell a property. jargon

Vendor Finance – Where the owner/seller lends money to the Buyer. Read more here.


X – A mark that can substitute for a signature in some cases, if a person cannot write. Requires the presence and affirmation of a notary.


Yield – The interest earned or return by an investor on an investment, stated as a percentage of the amount invested.


Zoning – Local authority guidelines for the permitted use of land. jargon

If there are any other Real Estate terms that you aren’t sure of, please don’t hesitate to get in touch and ask us. The only stupid question is the one not asked.

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