Glossary / Abbreviations

To help you understand the some of the terminology and 'jargon' that may be used when purchasing a property, we have complied this listing.

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Capital - Of or relating to financial assets, especially being or related to those financial assets that add to the net worth of a business.

Capital Expenditure - The costs involved in improvements of a property to brings its structure back to orginal standard, or to add value.

Capital Gain - The monetary gains upon the sale of a capital asset.

Capital Growth - describes how much your investments or capital will grow. In investment terms, growth is essential to keep ahead of inflation. Growth will, therefore, require investments that keep ahead of, or in-line with, inflation, such as shares and property. Note, however, that these investments are riskier and should only be used with a long-term savings horizon.

Capital Improvement - Any addition to a property created as a permanent improvement that adds value to the property.

capital recovery - The return to investors of that portion of their property investment expected to be lost over the income projection period.

capital recovery rate - The return of invested capital, expressed as an annual rate; often applied in a physical sense to wasting assets with a finite economic life

capitalization rate - Any rate used to convert income into value.

cash equivalency analysis - The procedure in which the sale prices of comparable properties sold with atypical financing are adjusted to reflect typical market terms.

Cash Investments - are investments in funds or accounts that allow your money to be on call. It is recommended that a small percentage of your portfolio be kept in cash investments for emergencies. The interest rate of such investments is usually variable.

Caveat - An additive located on the property title, to a purchaser this may mean that a third party might have some interest or right in the property.

Caveat Emptor - A Latin phrase for "Let the buyer beware".

Certificate of Occupancy - A local government document to a developer permitting the structure to be occupied which should indicate the building is compliant with the local governments building and regulations codes.

Certificate of Title - A document of a property with which the name of the registered owner/s, encumbrances, or easements on the property.

Chattels - Singular/multiple moveable items, ie: furniture, that may be included in a contract for the sale a property.

Clear Title - When the title of the property is free of mortgage or legal questions.

cnr - corner

Collateral - Is an asset used to ensure the repayments on a loan are made.

Common Property - Areas within the properties boundaries, ie: property within a strata title complex, that is shared by all other owners.

Company Title - A Company-title owner has a certificate of title and is the complete owner of a freehold unit complex. The owner of a Company Title becomes a member of a service company that administers, manages and maintains the property that the unit is registered within.

comparables - A shortened term for similar property sales, rentals, or operating expenses used for comparison in the valuation process

comparative unit method - A method used to derive a cost estimate in terms of dollars per unit of area or volume based on known costs of similar structures that are adjusted for time and physical differences.

competition - The active demand for real estate by two or more market participants.

Compound Growth - It's recommended that you reinvest the income that you earn on your investments. The reinvested income will subsequently earn income itself, and this is known as compounding growth

consideration - The recorded price for which title to a property is transferred.

Contract Note - A document stating in writing the terms and conditions relating to the sale or purchase of a property. This document is a Victorian based document only.

Contract of Sale - A document set out in writing the terms and conditions that have been negotiated within relation to the sale or purchase of a property.

conventional loan - A mortgage that is neither insured nor guaranteed by an agency of the federal government, although it may be privately insured.

Cooling-off Period - The legal entitlement of a property purchaser to withdraw from a contract by giving written notice within the required law of each state after the Contract of Sale or Contract Note is signed.

cost index - A multiplier used to translate a known historical cost into a current cost estimate. cost to cure. The cost to restore an item of deferred maintenance to new or reasonably new condition.

Covenant - Is a document that carries any terms, conditions and/or restrictions noted on the title. This document may need close inspection by a solicitor for future impacting restrictions.

Cover Note - A cover note is a document issued giving temporary insurance cover until a full policy is paid for and issued.

crm - cream

crpt - carpet

ct, ctl - cement tiles

curable functional obsolescence - An element of accrued depreciation; a curable defect caused by a flaw in the structure, materials, or design.

curable physical deterioration - An element of accrued depreciation; a curable defect caused by deferred maintenance.

Currency Risk - is the risk that the New Zealand dollar will reduce in value against other the currency of other nations. A falling dollar increases the costs of imports and overseas trips, for example.

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