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How to Property
How to Property is in Early Release. Full release 14 May 2026. Provide feedback and contact for partnerships.Contact Us

A

21

  • Accountability partnerA person with no emotional stake in the auction outcome who attends with you to enforce your price ceiling and bidding rules. They serve as an external check because research shows bidders cannot reliably detect when arousal is affecting their own decisions.
  • Active Termite EvidenceA pest inspection finding indicating that live termites were observed during the inspection. Active evidence requires immediate specialist treatment and a structural assessment of affected timbers.
  • Administrative fundThe fund within a strata scheme that covers day-to-day running costs such as cleaning, gardening, minor repairs, insurance premiums, and strata management fees.
  • Affordability-expectation gapThe tension between declining housing affordability and widespread expectation of further price rises. This gap creates urgency that can drive fear-based purchasing decisions.
  • AggregatorA company that provides mortgage brokers with access to a panel of lenders, technology platforms, compliance support, and training. Most brokers operate under an aggregator rather than holding individual accreditations with each lender. The aggregator holds or supports the Australian Credit Licence.
  • AnchoringA mental shortcut where the first number you see becomes your reference point for all later decisions. In property, the listed price becomes the anchor, and you unconsciously judge every other cost relative to it.
  • Anchoring and adjustmentA two-stage mental process where you start from an initial value (the anchor) and adjust up or down to reach your estimate. The adjustment is almost always insufficient, leaving the final estimate biased toward the anchor.
  • Anchoring BiasA cognitive bias where the first piece of numerical information you receive (the 'anchor') disproportionately influences your subsequent judgements and decisions, even when the anchor is irrelevant to the decision at hand.
  • Approved AgentA financial institution (bank, credit union, or mortgage broker) authorised by the state revenue office to process FHOG applications on behalf of applicants. Applying through an approved agent is faster because the lender already holds most of the required documentation.
  • AS 3660.2The Australian Standard for termite management in and around existing buildings and structures. Since 2017 it has recommended the use of thermal imaging and other specialist detection tools during termite inspections where further investigation is warranted.
  • AS 4349.1The Australian Standard for pre-purchase building inspections of residential buildings, published by Standards Australia. It sets out the methodology, scope, and reporting requirements for building inspections, including defect classification and limitations.
  • AS 4349.1-2007The Australian Standard that sets out the minimum requirements for pre-purchase building inspections of residential properties. It defines the scope of inspection, inspector qualifications, reporting format, and the limitations of a visual, non-invasive assessment.
  • AS 4349.3The Australian Standard for timber pest inspections of buildings, covering subterranean termites, borers of seasoned timber, and wood decay fungi. It defines inspection methodology, evidence classification (active or inactive), and damage severity ratings.
  • AS 4349.3-2010The Australian Standard that sets out the requirements for timber pest inspections of buildings. It defines which pests are covered (subterranean termites, dampwood termites, borers, wood decay fungi), the inspection methodology, and what constitutes reasonable access.
  • Assessment RateThe interest rate a lender uses to calculate whether a borrower can afford loan repayments. It is higher than the actual loan rate because it includes the serviceability buffer. For example, if the loan rate is 6.50% and the buffer is 3%, the assessment rate is 9.50%.
  • AuctionA public sale where bidders compete openly for a property. The contract is unconditional from the moment the hammer falls — there are no cooling-off rights at auction in any Australian state.
  • Auction FeverThe emotional state during competitive bidding where arousal and excitement cause bidders to pay more than they planned or more than an item is worth.
  • Auction PremiumThe difference in sale price between comparable properties sold by auction versus private treaty, attributed to the competitive, time-pressured nature of the auction mechanism. Whether a genuine premium exists after controlling for selection effects is contested in the academic literature.
  • Australian Credit Licence (ACL)A licence issued by ASIC that authorises a person or company to engage in credit activities, including providing credit assistance as a mortgage broker. The 6-digit licence number must be displayed on the broker's website and documents.
  • Australian Financial Services Licence (AFSL)A licence issued by ASIC under the Corporations Act 2001 that authorises a person or company to provide financial services, including giving financial product advice. Property investment advice does not require an AFSL because real property is not classified as a financial product under the Act.
  • Automatic Mutual Recognition (AMR)A national scheme that allows a person licensed to perform an occupation in one Australian state or territory to perform the same occupation in another participating state without obtaining a separate licence. Queensland does not participate in AMR for real estate agents.

Definitions

Australian property definitions

Plain-English definitions of 261 property terms, from stamp duty to strata. Start with an essential below, or search the full list in the sidebar.tap any term to read its full definition.

Start here

Essentials for first home buyers

Conveyancing

The legal process of transferring property ownership from seller to buyer, handled by a conveyancer or solicitor. It includes contract review, property searches, settlement arrangements, and title registration.

Read definition

Cooling-off period

A short window (typically 2-5 business days, varying by state) after signing a contract during which a buyer can withdraw from the purchase, usually with a small penalty. There is no cooling-off period for properties bought at auction.

Read definition

First Home Owner Grant (FHOG)

A one-off government grant for eligible first home buyers purchasing or building a new home. The amount varies by state, ranging from $10,000 to $50,000. You apply through your lender, conveyancer, or directly with your state revenue office.

Read definition

Lenders mortgage insurance (LMI)

A one-off insurance premium paid by the borrower to protect the lender if the borrower defaults on the loan. It applies when the deposit is below 20% of the property value and typically costs 1% to 3% of the loan amount.

Read definition

Pre-Approval

A conditional commitment from a lender confirming you are eligible to borrow up to a specified amount, based on your current financial position. It typically lasts 3 to 6 months and does not commit you to taking the loan.

Read definition

Stamp duty (transfer duty)

A one-off state government tax paid when property ownership transfers to a new buyer. The amount is calculated as a percentage of the purchase price, with rates varying by state and territory.

Read definition

Tip: use the search bar in the sidebar to find a term across all definitions, or tap a letter to browse by alphabet.

All 261 terms

#

  • 5% Deposit SchemeAn Australian Government programme allowing eligible first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance. The government guarantees the difference between the 5% deposit and the 20% threshold. Since October 2025, there are no income caps or limits on places.

A

  • Accountability partnerA person with no emotional stake in the auction outcome who attends with you to enforce your price ceiling and bidding rules. They serve as an external check because research shows bidders cannot reliably detect when arousal is affecting their own decisions.
  • Active Termite EvidenceA pest inspection finding indicating that live termites were observed during the inspection. Active evidence requires immediate specialist treatment and a structural assessment of affected timbers.
  • Administrative fundThe fund within a strata scheme that covers day-to-day running costs such as cleaning, gardening, minor repairs, insurance premiums, and strata management fees.
  • Affordability-expectation gapThe tension between declining housing affordability and widespread expectation of further price rises. This gap creates urgency that can drive fear-based purchasing decisions.
  • AggregatorA company that provides mortgage brokers with access to a panel of lenders, technology platforms, compliance support, and training. Most brokers operate under an aggregator rather than holding individual accreditations with each lender. The aggregator holds or supports the Australian Credit Licence.
  • AnchoringA mental shortcut where the first number you see becomes your reference point for all later decisions. In property, the listed price becomes the anchor, and you unconsciously judge every other cost relative to it.
  • Anchoring and adjustmentA two-stage mental process where you start from an initial value (the anchor) and adjust up or down to reach your estimate. The adjustment is almost always insufficient, leaving the final estimate biased toward the anchor.
  • Anchoring BiasA cognitive bias where the first piece of numerical information you receive (the 'anchor') disproportionately influences your subsequent judgements and decisions, even when the anchor is irrelevant to the decision at hand.
  • Approved AgentA financial institution (bank, credit union, or mortgage broker) authorised by the state revenue office to process FHOG applications on behalf of applicants. Applying through an approved agent is faster because the lender already holds most of the required documentation.
  • AS 3660.2The Australian Standard for termite management in and around existing buildings and structures. Since 2017 it has recommended the use of thermal imaging and other specialist detection tools during termite inspections where further investigation is warranted.
  • AS 4349.1The Australian Standard for pre-purchase building inspections of residential buildings, published by Standards Australia. It sets out the methodology, scope, and reporting requirements for building inspections, including defect classification and limitations.
  • AS 4349.1-2007The Australian Standard that sets out the minimum requirements for pre-purchase building inspections of residential properties. It defines the scope of inspection, inspector qualifications, reporting format, and the limitations of a visual, non-invasive assessment.
  • AS 4349.3The Australian Standard for timber pest inspections of buildings, covering subterranean termites, borers of seasoned timber, and wood decay fungi. It defines inspection methodology, evidence classification (active or inactive), and damage severity ratings.
  • AS 4349.3-2010The Australian Standard that sets out the requirements for timber pest inspections of buildings. It defines which pests are covered (subterranean termites, dampwood termites, borers, wood decay fungi), the inspection methodology, and what constitutes reasonable access.
  • Assessment RateThe interest rate a lender uses to calculate whether a borrower can afford loan repayments. It is higher than the actual loan rate because it includes the serviceability buffer. For example, if the loan rate is 6.50% and the buffer is 3%, the assessment rate is 9.50%.
  • AuctionA public sale where bidders compete openly for a property. The contract is unconditional from the moment the hammer falls — there are no cooling-off rights at auction in any Australian state.
  • Auction FeverThe emotional state during competitive bidding where arousal and excitement cause bidders to pay more than they planned or more than an item is worth.
  • Auction PremiumThe difference in sale price between comparable properties sold by auction versus private treaty, attributed to the competitive, time-pressured nature of the auction mechanism. Whether a genuine premium exists after controlling for selection effects is contested in the academic literature.
  • Australian Credit Licence (ACL)A licence issued by ASIC that authorises a person or company to engage in credit activities, including providing credit assistance as a mortgage broker. The 6-digit licence number must be displayed on the broker's website and documents.
  • Australian Financial Services Licence (AFSL)A licence issued by ASIC under the Corporations Act 2001 that authorises a person or company to provide financial services, including giving financial product advice. Property investment advice does not require an AFSL because real property is not classified as a financial product under the Act.
  • Automatic Mutual Recognition (AMR)A national scheme that allows a person licensed to perform an occupation in one Australian state or territory to perform the same occupation in another participating state without obtaining a separate licence. Queensland does not participate in AMR for real estate agents.

B

  • Bank ValuationAn assessment of a property's market value ordered by a lender during the home loan application process. The valuer is appointed from the lender's panel and reports to the lender, not the buyer. Its purpose is to confirm the property provides adequate security for the loan, which may differ from the purchase price or an independent market valuation.
  • Best and FinalA process where an agent invites all interested buyers to submit their highest offer by a set deadline. Each buyer gets one chance to present their best price and terms, with no further negotiation.
  • Best Interests DutyA legal obligation under sections 158LA and 158LE of the National Consumer Credit Protection Act requiring mortgage brokers to act in the best interests of borrowers when providing credit assistance. This includes gathering sufficient information, recommending suitable products, and prioritising the borrower's interests over the broker's when a conflict exists. It took effect on 1 January 2021.
  • Bidder's RegisterThe official record kept by the selling agent listing all registered bidders at an auction, including their names, addresses, and proof of identity. Required by law in all Australian states and territories.
  • Building and Pest InspectionA professional examination of a property’s structural condition and any pest activity (especially termites). Usually costs $500 to $900 for a combined inspection and is completed before or shortly after making an offer.
  • Building InspectionA pre-purchase assessment by a qualified building inspector that examines the structural integrity and condition of a property. The inspector produces a written report detailing defects, safety hazards, and maintenance issues.
  • Building Inspection (Pre-Purchase)A visual, non-invasive assessment of a residential property's structural condition, conducted in accordance with Australian Standard AS 4349.1-2007. The inspector checks the interior, exterior, roof exterior, roof void, and subfloor for major defects, minor defects, and safety hazards. It does not cover timber pest activity, concealed areas, or compliance testing.
  • Building insuranceInsurance that covers the physical structure of your home against damage or destruction from events like fire, storm, flood, or impact. It pays to rebuild or repair the building itself.
  • Bushfire Attack Level (BAL)A rating from BAL-LOW to BAL-FZ (Flame Zone) that measures a property's exposure to bushfire attack. Higher ratings impose stricter building requirements and can increase insurance premiums.
  • Buyer fatigueThe gradual decline in decision-making quality caused by prolonged property searching. It leads buyers to accept terms, prices, or properties they would have rejected earlier in their search.
  • Buyer's agentAlso called a buyer's advocate. A licensed real estate professional who represents the buyer, not the seller. They must hold a real estate licence in the state where the property is located. Can be engaged for auction-only bidding services or full property search and negotiation.

C

  • Capital improved valueThe total market value of a property including both the land and all buildings or improvements on it. Used by Victorian councils to calculate rates.
  • Capital improved value (CIV)The total market value of a property including both the land and all buildings or improvements on it. Used by Victorian councils to calculate rates.
  • Capital works fundA reserve fund built up through levies to pay for major repairs and replacements to common property, such as roof replacement, repainting, or lift upgrades. Previously called the sinking fund.
  • CapitalisationAdding a cost such as an LMI premium to your loan balance instead of paying it upfront. You then pay interest on that amount for the remaining life of the loan, increasing its true cost over time.
  • Cash BufferSavings held in reserve after purchasing a property to cover unexpected expenses, rate rises, or income disruption. A common benchmark is 3 to 6 months of mortgage repayments.
  • CatastrophisingA thinking pattern where a single negative event is interpreted as evidence of a permanent, hopeless situation. In property, turning one missed bid into the belief you will never buy.
  • Caveat EmptorA Latin phrase meaning 'let the buyer beware.' In Australian property law, it places the responsibility on the buyer to investigate the physical condition of a property before purchase. Sellers generally have no obligation to disclose physical defects, though they must not actively conceal them or make misleading statements.
  • Certificate of currencyA document from your insurer proving you have an active insurance policy. Your lender will require this before settlement to confirm the property is insured.
  • ClawbackA provision where the lender reclaims some or all of the upfront commission paid to the mortgage broker if the borrower pays off or refinances the loan within a set period, typically 1 to 2 years after settlement. Federal regulations cap the maximum clawback period at 2 years and prohibit brokers from passing clawback costs to borrowers.
  • Clearance rateThe percentage of properties listed for auction that successfully sell, either at auction or shortly after. A clearance rate of 70% means 30% of auctioned properties did not sell.
  • Cognitive BiasA systematic pattern of deviation from rational judgement, where your brain takes mental shortcuts that can lead to errors in decision-making. Anchoring is one of many cognitive biases identified by behavioural psychology research.
  • Common propertyThe parts of a strata scheme shared by all owners, including lobbies, stairwells, driveways, gardens, pools, lifts, roofing, and external walls. Maintained and insured through strata levies.
  • COMOCompromise Or Miss Out. A term coined in 2025 describing the trend of Australian buyers adjusting their property requirements downward due to high prices and limited supply.
  • Comparable salesRecent sale prices of similar properties in the same area, used as evidence to estimate a property's market value. Also called 'comps.' These form the basis of independent property valuations.
  • Comparative market analysisA method of estimating a property's value by comparing it to similar properties that have recently sold nearby. Real estate agents and valuers both use this approach, though agents may present it selectively to support a desired price outcome.
  • Comparison RateA single percentage figure that combines a loan's interest rate with most of its standard fees and charges, calculated on a $150,000 loan over 25 years. Required by law to be displayed alongside any advertised home loan interest rate in Australia. It includes application fees, ongoing fees, and settlement costs, but excludes government charges, lenders mortgage insurance, and conditional fees like early repayment penalties.
  • Competitive arousalA physiological and emotional state of heightened alertness triggered by direct competition, characterised by increased heart rate, sweating, and impaired analytical decision-making.
  • ConcessionA reduced rate of stamp duty. You still pay some duty, but less than the standard amount. Concessions are often available for first home buyers within certain property value ranges.
  • Concessional ContributionsBefore-tax super contributions including employer contributions, salary sacrifice, and personal contributions you claim a tax deduction for. These are taxed at 15% inside super. The total annual cap for all concessional contributions is $30,000 in the 2025-26 financial year.
  • Conditional ApprovalA lender's written indication that a borrower meets their lending criteria based on the information provided, subject to specific conditions being met before the loan is finalised. Also called approval in principle. It is not a guarantee of funding.
  • Conditional OfferAn offer to purchase a property that is subject to specified conditions being met — most commonly finance approval, a satisfactory building and pest inspection, or the sale of the buyer's existing property. If a condition is not met, the buyer can typically exit the contract without penalty.
  • Conflict Priority RuleA component of the mortgage broker best interests duty that requires brokers to prioritise the consumer's interests when a conflict of interest arises. A broker cannot recommend a product that would generate higher remuneration for themselves unless doing so is also in the client's best interests.
  • Conflicted RemunerationPayment structures where the professional's income depends on recommending a particular product or service, creating an incentive that may not align with the client's best interests. Examples include volume-based bonuses, trailing commissions tied to loan size, and referral fees from developers.
  • Contents insuranceInsurance that covers your personal belongings inside the home — furniture, electronics, clothing, appliances — against theft, damage, or destruction.
  • Contract of SaleThe legal agreement between buyer and seller that sets out the terms of a property transaction, including the price, deposit, settlement date, and any conditions that must be met before the sale is final.
  • ConveyancerA licensed professional who specialises in the legal process of transferring property ownership. They are qualified to handle standard residential transactions but cannot provide broader legal advice outside property law.
  • ConveyancingThe legal process of transferring property ownership from seller to buyer, handled by a conveyancer or solicitor. It includes contract review, property searches, settlement arrangements, and title registration.
  • Cooling-off periodA short window (typically 2-5 business days, varying by state) after signing a contract during which a buyer can withdraw from the purchase, usually with a small penalty. There is no cooling-off period for properties bought at auction.
  • Cost MapA full inventory of every upfront, transaction, and ongoing cost a property purchase will expose you to. If it is not on your cost map, it will hit your budget as a surprise.
  • Council ratesA compulsory annual charge set by your local council, based on your property’s assessed value. They fund local infrastructure and services like roads, waste collection, parks, and libraries.
  • Credit GuideA document that mortgage brokers are legally required to provide to borrowers before giving credit assistance. It discloses the broker's commission structure, the lenders on their panel, their complaints handling process, and their Australian Credit Licence details.
  • Criteria driftThe gradual, often unconscious relaxation of property standards over time during a search. For example, a budget ceiling of $850,000 slowly becoming $900,000 after repeated missed opportunities.

D

  • Days on MarketThe number of days a property has been listed for sale before it sells. A useful indicator of how competitive a local market is -- longer days on market usually means less competition and more room to include conditions in your offer.
  • Debt-to-Income (DTI) RatioA measure of a borrower's total debt relative to their gross annual income. A DTI of 6 means total debt is 6 times annual income. From February 2026, APRA requires lenders to limit loans with a DTI of 6 or higher to no more than 20% of new mortgage lending, with exemptions for new dwelling purchases and owner-occupier bridging loans.
  • Debt-to-income ratioYour total debt divided by your gross annual income. A DTI of 6 means you owe six times what you earn in a year. APRA considers a DTI of 6 or above to be high-risk.
  • Debt-to-income ratio (DTI)Your total debt divided by your gross annual income. A DTI of 6 means you owe six times what you earn in a year. APRA considers a DTI of 6 or above to be high-risk.
  • Decision fatigueA psychological phenomenon where the quality of decisions worsens after a long session of decision-making. It affects all high-stakes repeated decisions, not just property buying.
  • Deed of VariationA formal legal document that amends the terms of an existing contract. In property transactions, it is commonly used to record a negotiated price reduction after a building inspection, ensuring the lower price becomes the official contract price for stamp duty purposes.
  • Deemed EarningsThe ATO calculates earnings on your FHSSS contributions using a set rate called the shortfall interest charge rate, regardless of how your super fund actually performed. These deemed earnings are added to your withdrawal amount.
  • Defects liability periodA short window, typically 3 to 6 months after a new build is handed over, during which the builder must fix any defects in workmanship or materials at no cost to you. This is separate from the longer statutory warranty.
  • Deferred maintenanceRepairs or upkeep that a homeowner delays or skips, usually to save money in the short term. Deferred maintenance typically compounds in cost, with industry estimates suggesting every dollar deferred can become four to seven dollars in future repair costs.
  • Demand-Side AssistanceGovernment programs that help buyers afford higher prices or access larger loans, such as grants, stamp duty concessions, and deposit guarantee schemes. These increase buyer purchasing power without directly adding to housing supply.
  • DepositThe upfront cash you contribute toward the purchase price of a property. The remainder is covered by your home loan.
  • Deposit ForfeitureThe loss of your deposit (typically 10% of the purchase price) to the seller if you fail to complete the purchase after signing an unconditional contract.
  • DisbursementsThird-party costs paid during conveyancing for services like title searches, council certificates, and land registry fees. These are separate from your conveyancer’s professional fee and are passed through to you at cost.
  • Due DiligenceThe process of investigating a property before buying it, including building inspections, pest inspections, contract reviews, strata reports, and title searches. These costs are incurred before purchase and are not refundable if you decide not to proceed.
  • Dummy BidAn illegal fake bid made at auction by the seller, someone connected to the seller, or someone acting on the seller's instructions, intended to create artificial competition and drive up the price. Dummy bids carry significant financial penalties for all parties involved.
  • Dutiable ValueThe value on which stamp duty is calculated. This is usually the purchase price or the market value of the property, whichever is higher.
  • Dwelling-to-Income RatioThe median dwelling value divided by the median household income. A ratio of 8.0x means the median home costs 8 times the median annual household income.

E

  • EasementA legal right for someone other than the property owner to use part of the land for a specific purpose, such as a shared driveway, drainage, or access to utility infrastructure. Easements are registered on the title and transfer with the property when it is sold.
  • Emergency BufferCash kept separate from your deposit and transaction costs, held in an accessible savings account after settlement. It covers unexpected expenses like repairs, rate rises, or income loss without forcing you into debt.
  • EncumbranceA claim, restriction, or liability attached to a property title that may affect the owner's use or ability to sell. Common examples include mortgages, easements, and restrictive covenants.
  • Endowment effectA cognitive bias where owning something causes you to value it more highly than you would if you did not own it. In experiments, sellers consistently demand roughly twice what buyers will pay for the same item.
  • Engagement LetterA written document from a professional that sets out the terms of their relationship with you, including the scope of services, fees, duration, exclusivity, and how either party can end the arrangement. Also called a letter of engagement or engagement agreement.
  • EquityThe portion of your property that you own outright — the property value minus what you owe on your loan. A larger deposit means more equity from day one.
  • Estimated selling priceThe price or price range an agent reasonably expects a property to sell for, based on comparable recent sales. In Victoria, this must appear on the Statement of Information and cannot be advertised as a range wider than 10%.
  • Exchange of ContractsThe point at which both buyer and seller have signed identical copies of the contract of sale and those copies have been formally exchanged. This creates a binding legal agreement. Before exchange, either party can walk away without penalty.
  • ExemptionA complete waiver of stamp duty where you pay $0. Exemptions usually apply to properties below a specific value threshold and require you to meet eligibility criteria such as living in the property.

F

  • Family Security GuaranteeA type of guarantor arrangement where a family member uses equity in their property as additional security on your home loan. The guarantee is usually limited to the portion above 80% LVR and can be released once you pay the loan down to that level.
  • FHSSS DeterminationA calculation by the ATO that tells you the maximum amount you can withdraw under the First Home Super Saver Scheme. You request it through myGov. You can request multiple determinations as your contributions grow, but you can only request one release.
  • Fiduciary DutyA legal obligation to act in the best interests of another person. In a property transaction, the selling agent owes a fiduciary duty to the seller, while the buyer's conveyancer and buyer's agent owe their fiduciary duty to the buyer. The person with the fiduciary duty must put their client's interests ahead of their own.
  • FinanceA clause in a property contract that makes the sale dependent on the buyer receiving formal loan approval from their lender within a set timeframe, typically 14 to 21 days.
  • Finance ClauseA condition in a property contract that makes the sale subject to the buyer obtaining formal (unconditional) loan approval by a specified date. Also called a subject to finance condition. If unconditional approval is not obtained by the deadline, the buyer can terminate the contract and recover their deposit, provided they have met their obligations under the clause.
  • Finance Clause (Subject to Finance)A condition written into the contract of sale that makes the purchase subject to the buyer obtaining formal loan approval by a specified date. If the buyer cannot secure finance within that period, they can terminate the contract and have their deposit refunded.
  • Finance ConditionA clause in a property contract that makes the sale dependent on the buyer receiving formal loan approval from their lender within a set timeframe, typically 14 to 21 days.
  • First Home BuyerA buyer who has not previously owned residential property in Australia. The definition varies slightly between schemes — most require you to have never owned, while the First Home Guarantee accepts buyers who have not owned in the last 10 years.
  • First Home Guarantee (FHG)A federal scheme that allows first home buyers to purchase with a deposit as low as 5% without paying Lenders Mortgage Insurance. The government guarantees the difference between your deposit and 20% to the lender.
  • First Home Owner Grant (FHOG)A one-off government grant for eligible first home buyers purchasing or building a new home. The amount varies by state, ranging from $10,000 to $50,000. You apply through your lender, conveyancer, or directly with your state revenue office.
  • First Home Super Saver Scheme (FHSSS)A federal scheme that allows you to withdraw eligible voluntary superannuation contributions to use as a home deposit, up to a maximum of $50,000. Contributions are taxed at 15% going in rather than your marginal rate, creating a tax saving.
  • Flexible criteriaProperty preferences a buyer is willing to trade away if a property meets all non-negotiable criteria. Common examples include cosmetic condition, exact suburb, and parking.
  • FOMO (fear of missing out)The anxiety that prices will rise further or opportunities will disappear, driving buyers to act faster and accept worse terms than they otherwise would.
  • Foreign Buyer SurchargeAn additional percentage of stamp duty charged on top of the standard rate when a property is purchased by a non-Australian citizen or non-permanent resident. Ranges from 7% to 9% depending on the state.
  • Form 1A vendor disclosure statement required under South Australian law before a residential property sale can proceed. Contains information about the property title, zoning, council rates, and other details. In SA, the cooling-off period starts when the Form 1 is served on the buyer, not when the contract is signed.
  • Form 1 (SA)A prescribed disclosure document required under South Australian law before a residential property sale. South Australia's cooling-off period begins when the Form 1 is served on the buyer — not when the contract is signed.
  • Formal ApprovalThe final confirmation from your lender that your home loan is approved for a specific property, after they have completed a property valuation and verified your current financial position. Also called unconditional approval. This is different from pre-approval, which is a preliminary estimate.

G

  • Genuine SavingsMoney you have saved yourself over time, typically at least three months. Lenders use this to assess your ability to manage money and make regular payments. Gifts, windfalls, and tax refunds usually do not count as genuine savings.
  • Gift LetterA signed letter or statutory declaration from a family member confirming that money provided for a property purchase is a gift, not a loan, and is not expected to be repaid. Lenders require this before they will treat the funds as part of your deposit.
  • Government GuaranteeA commitment by the government to cover part of the lender's loss if you default on your home loan. It protects the bank, not you. You still owe the full loan and are responsible for every repayment.
  • Gross rental yieldAnnual rental income divided by the property's purchase price, expressed as a percentage. Used by investors to compare the income return of different properties. A property renting for $500 per week ($26,000 per year) bought for $650,000 has a gross yield of 4.0%.
  • GuarantorA person, usually a parent, who offers equity in their own property as security for your home loan. The guarantor does not give you cash. They allow their home to be used as collateral, which can reduce or eliminate the need for a deposit and avoid lenders mortgage insurance.

H

  • Hard CeilingThe maximum price you will pay for a property, calculated when you are calm and based on what you can genuinely afford — not what the bank will lend you.
  • Hedonic Pricing ModelA statistical method that estimates property value by breaking it into measurable characteristics — bedrooms, land size, location, age — and assigning a value to each. Used in research to compare prices across properties while controlling for their differences.
  • Help to BuyA federal shared equity scheme where the government contributes up to 40% of the purchase price for new homes or 30% for existing homes, in exchange for an equivalent ownership share in the property.
  • Holding costThe gap between the rental income an investment property earns and its total ownership costs. This is the amount an investor pays out of pocket each month to hold the property.
  • Holding DepositA smaller initial payment (typically 0.25% of the purchase price in NSW) paid at the time of exchanging contracts, with the balance of the full deposit due by the end of the cooling-off period.
  • Home Guarantee SchemeA federal government scheme that allows eligible buyers to purchase a home with a deposit as low as 5% without paying Lenders Mortgage Insurance. The government guarantees the difference between your deposit and 20%.
  • House Price Expectations IndexA Westpac-Melbourne Institute survey measure of consumer expectations for house prices over the next 12 months. Any reading above 100 means more consumers expect prices to rise than fall.

I

  • Inactive Termite EvidenceA pest inspection finding indicating that old termite damage or workings are present but no live termites were detected during the inspection. The property may still be vulnerable to future attack.
  • Incidental arousalPhysiological activation from sources unrelated to the decision at hand — such as exercise, caffeine, traffic stress, or crowd energy — that still influences decision-making without the person being aware of it.

L

  • Lender PanelThe list of lenders a mortgage broker is accredited with and can recommend products from. Panel sizes vary, with most established brokers having access to 20 to 60+ lenders through their aggregator. A broker can only recommend products from lenders on their panel.
  • Lenders Mortgage InsuranceInsurance that protects the lender (not the borrower) if the borrower defaults on their home loan. Usually required when the loan-to-value ratio exceeds 80%, meaning the borrower has less than a 20% deposit. The cost is typically paid by the borrower.
  • Lenders mortgage insurance (LMI)A one-off insurance premium paid by the borrower to protect the lender if the borrower defaults on the loan. It applies when the deposit is below 20% of the property value and typically costs 1% to 3% of the loan amount.
  • Loan Application FeeA one-off fee charged by the lender to process and set up your home loan. It covers administrative costs including credit checks, document preparation, and loan approval. About 39% of lenders charge this fee.
  • Loan-to-Value Ratio (LVR)The percentage of the property value that you borrow. Most lenders charge LMI when LVR exceeds 80%.
  • Loss aversionA cognitive bias where the psychological pain of losing something is roughly twice as intense as the pleasure of gaining the equivalent amount. Losing $50,000 hurts about as much as gaining $100,000 would feel good.
  • Loss aversion coefficientA numerical estimate of how much more strongly losses are felt compared to gains. Tversky and Kahneman estimated this at approximately 2.25, meaning a loss needs to be offset by a gain roughly 2.25 times larger to feel neutral.

M

  • Maintenance ItemA condition resulting from normal wear and ageing that requires routine upkeep rather than repair. Not an official AS 4349.1 classification, but commonly used by inspection companies to distinguish routine upkeep from defects requiring rectification.
  • Maintenance reserveMoney set aside each month to cover future repairs and upkeep. The common rule of thumb is 1% of the property value per year for a house, reduced for apartments where strata covers building maintenance.
  • Major DefectA defect of sufficient magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility, or further deterioration of the property. Examples include significant cracking in load-bearing walls, major roof leaks, and failing foundations.
  • Median Dwelling ValueThe middle value when all dwellings in an area are ranked by price. Half cost more, half cost less. It is a more reliable measure than the average because a few very expensive sales do not skew it.
  • Minor DefectA defect other than a major defect. Examples include hairline cracks in render, minor paint peeling, or a sticky door latch. These are maintenance items, not structural problems.
  • Mortgage stressA situation where mortgage repayments consume a large share of household income, leaving little room for other expenses. The commonly cited threshold is 30% of gross income.
  • Multi-offer SituationA scenario where more than one buyer submits an offer on the same private treaty property simultaneously. The agent typically asks each buyer to submit their best and final offer by a deadline. The seller then selects the most attractive offer.

N

  • National Credit CodeSchedule 1 of the National Consumer Credit Protection Act 2009. It sets the rules for consumer lending in Australia, including the requirement for lenders to display comparison rates alongside advertised interest rates and the standardised method for calculating those rates.
  • Negative EquityWhen you owe more on your mortgage than your home is worth. This typically happens when property prices fall after you bought with a small deposit. Negative equity only becomes a financial problem if you need to sell or cannot keep up repayments.
  • Negative gearingWhen the costs of owning an investment property (mortgage interest, maintenance, rates) exceed the rental income it generates. The loss can be deducted from your taxable income, but you are still losing money in cash flow terms.
  • New HomeA dwelling that has not previously been sold or occupied as a place of residence. This includes newly constructed houses, townhouses, apartments, off-the-plan purchases, and homes built on vacant land. A substantially renovated home may also qualify if it has not been lived in since the renovation.
  • Non-Invasive InspectionAn inspection method where the inspector visually examines accessible areas without opening walls, removing linings, lifting carpet, moving furniture, or carrying out any destructive testing. Standard pre-purchase inspections under AS 4349.1 are non-invasive.
  • Non-negotiable criteriaProperty requirements a buyer commits to not compromising on, regardless of market pressure. Typically limited to three core criteria such as budget ceiling, minimum size, and location.
  • Notice to CompleteA formal notice issued by one party (usually the seller) to the other when settlement has not occurred by the agreed date. It sets a final deadline (typically 14 days in NSW) for the defaulting party to settle, after which the contract can be terminated.

O

  • Off-the-Plan ConcessionA stamp duty reduction available when buying a property before it is built or completed. Duty is typically calculated on the land value at the contract date rather than the finished value of the property.
  • Offer and Acceptance (WA)The standard contract form used in Western Australia for residential property sales. Unlike contracts in other states, it uses a tick-box format where conditions like finance clauses must be specifically activated, and building inspection conditions must be added as special conditions.
  • On the MarketA declaration by the auctioneer during an auction that bidding has passed the reserve price. Once a property is on the market, it will sell unconditionally to the highest bidder when the hammer falls.
  • Opponent effectThe finding that competing against identifiable real people produces measurably higher arousal and higher bids than competing against anonymous or automated opponents, even when the financial stakes are identical.
  • Opportunity CostWhat you give up by choosing one option over another. In deposit planning, the opportunity cost of waiting is the property price growth and equity you miss during the saving period. The opportunity cost of buying sooner is the LMI and higher repayments on a larger loan.
  • Owners corporationThe legal entity made up of all lot owners in a strata scheme, responsible for managing and maintaining common property. Called a body corporate in Queensland and a strata company in Western Australia.
  • Ownership cost ratioYour total monthly ownership costs (mortgage plus all other recurring costs) divided by your monthly after-tax household income. A ratio above 0.30 is widely considered the threshold for housing affordability stress.

P

  • Passed InWhen the highest bid at auction does not reach the vendor's reserve price. The property does not sell at auction. The highest bidder typically gets the first right to negotiate with the vendor after the auction.
  • Penalty unitA standardised measure used in Victorian legislation to set fine amounts. The dollar value of a penalty unit is indexed annually. As of 2025, one penalty unit equals approximately $197.59, making a 240-penalty-unit fine worth $47,422.
  • Pest InspectionA specialist inspection that identifies timber pests (termites, borers, wood decay fungi) and the conditions that attract them, such as moisture and soil contact with timber framing. The report covers both active infestations and high-risk areas.
  • Pest Inspection (Timber Pest Inspection)A visual assessment of a property for evidence of timber pest activity, conducted in accordance with Australian Standard AS 4349.3-2010. It covers subterranean termites, dampwood termites, borers of seasoned timber, and wood decay fungi. It does not cover drywood termites, mould, or rodents.
  • PEXAProperty Exchange Australia — the electronic settlement platform used for most property transactions in Australia. PEXA processes document lodgement, fund transfers, and title registration digitally, so parties do not need to physically attend settlement.
  • Pre-ApprovalA conditional commitment from a lender confirming you are eligible to borrow up to a specified amount, based on your current financial position. It typically lasts 3 to 6 months and does not commit you to taking the loan.
  • Pre-approval in principleAn indication from a lender that they would likely lend you a certain amount based on your financial situation. It is not a guarantee and has not been assessed against a specific property. Not sufficient for auction bidding where contracts are unconditional.
  • Pre-auction valuationThe price range you set for a property before auction day, based on comparable sales and your own research. It becomes the ceiling you pre-commit to so that in-auction pressure cannot push you past a number you would regret.
  • Pre-commitmentA behavioural economics strategy where a person locks in a decision or constraint before facing pressure. Writing down criteria before searching is a pre-commitment device that reduces impulsive compromise.
  • Pre-Settlement InspectionA walk-through of the property in the days before settlement to confirm the property is in the same condition as at the contract date. This is not a building inspection — it checks for damage, removal of fixtures, or items left behind.
  • Price ceilingThe absolute maximum dollar amount you will pay for a property at auction. Set before auction day based on unconditional finance approval, comparable sales data, and repayment comfort. It is a hard stop, not a guideline.
  • Price guideThe price range or figure quoted by a selling agent to indicate what a property might sell for. In some states, price guides must reflect the agent's genuine estimate of selling price. In practice, guides are often set low to attract more buyer interest.
  • Price-to-income ratioThe ratio of median dwelling prices to median household income. A ratio of 8.0 means the typical home costs 8 times the typical annual household income. Used as a standard measure of housing affordability.
  • Principal and interest repaymentA loan repayment that covers both the original amount borrowed (principal) and the cost of borrowing (interest). Most home loans are structured this way. Each repayment chips away at the debt while also covering the lender’s charge.
  • Principal Place of ResidenceThe home you live in as your main residence. Most stamp duty concessions require you to move in within a specified period after settlement and live there continuously for 6 to 12 months.
  • Private treatyA method of selling property where the seller sets an asking price and negotiates directly with potential buyers, rather than selling at auction. Buyers who purchase through private treaty have a cooling-off period and more time to conduct due diligence.
  • Professional Indemnity InsuranceInsurance that protects a professional and their client if their work contains errors or omissions that cause financial loss. For building inspectors, it covers situations where a significant defect was missed during the inspection.
  • Progressive Bracket SystemA tax structure where different portions of the property value are taxed at increasing rates, similar to income tax brackets. You do not pay one flat rate on the entire purchase price.
  • Property Price CapThe maximum purchase price for a property to be eligible under a particular government scheme. Caps vary by state, location, and scheme.
  • Property SpruikerAn informal term for a person or company that promotes property investment using high-pressure sales tactics, often earning undisclosed commissions from developers or builders. Property spruikers typically offer free seminars or strategy sessions and steer clients toward specific developments where they receive kickbacks.
  • Property Value CapThe maximum value a property can be for you to remain eligible for the FHOG. This includes the land price, building contract, and any contract variations. Not all states have a cap. Caps range from $600,000 to $750,000 in states that apply them.
  • Prospect theoryA behavioural economics theory developed by Kahneman and Tversky showing that people evaluate outcomes relative to a reference point, not in absolute terms. Losses from the reference point are felt roughly twice as strongly as equivalent gains.
  • Pseudo-endowment effectA psychological phenomenon where a person develops a sense of ownership over something they do not yet own. In auctions, being the leading bidder creates a feeling that the item is already yours, which increases your willingness to pay to avoid losing it.

R

  • Rate in the dollarThe multiplier your council applies to your property’s assessed value to calculate your annual rates bill. Set each year based on the council’s budget needs.
  • Real returnsInvestment returns adjusted for inflation. If a property rises 10% in nominal value but inflation is 4%, the real return is approximately 6%. Real returns give a more accurate picture of actual wealth gained.
  • REBAA (Real Estate Buyers Agents Association of Australia)The only national industry body specifically for buyer's agents in Australia, established in 2000. REBAA membership requires correct licensing, a minimum of 2 years' experience, $2 million professional indemnity insurance, exclusive buyer's agency operation, and adherence to a code of conduct.
  • Redraw FacilityA feature on some home loans that lets you withdraw extra repayments you have already made. It gives you access to cash without taking out a new loan, but the money you redraw is added back to your loan balance.
  • Reference pointThe mental baseline against which you judge outcomes as gains or losses. In prospect theory, whether something feels like a gain or a loss depends entirely on where your reference point sits, not on the objective outcome.
  • Referral FeeA payment made by one professional to another for sending them a client. For example, a real estate agent might receive a fee from a conveyancer for every buyer they refer. Referral fees from legal firms to real estate agents are banned in Western Australia, South Australia, and Tasmania.
  • Rent-Back ArrangementAn agreement where the vendor stays in the property after settlement for an agreed period, paying rent to the new owner. This gives the vendor more time to move or find their next home.
  • Rental yieldThe annual rental income from an investment property expressed as a percentage of the purchase price. Gross yield is rent divided by price; net yield deducts ownership costs. Investors use yield as a discipline — if the purchase price pushes yield below target, the numbers do not work.
  • Rescission PenaltyThe fee a seller is entitled to deduct from the buyer's deposit if the buyer withdraws from the contract during the cooling-off period. The amount is set by state legislation, typically 0.2% to 0.25% of the purchase price. The remainder of the deposit is refunded.
  • Reserve PriceThe minimum price a vendor will accept at auction. Set before the auction starts and rarely disclosed publicly in advance. Once bidding passes the reserve, the property is on the market and will sell to the highest bidder.

S

  • Section 10.7 Planning CertificateA NSW council document that discloses planning controls affecting a property, including whether it is in a bushfire-prone area, flood zone, or heritage conservation area. Costs $53.
  • Section 10.7 Planning Certificate (NSW)A certificate issued by the local council in New South Wales that shows the zoning of the property and any development controls or restrictions that apply. It is a prescribed document that must be attached to the contract of sale.
  • Section 17 CertificateThe ACT equivalent of NSW's Section 66W certificate. A legal document signed by a solicitor after advising the buyer, which waives the buyer's 5-business-day cooling-off period on a residential property purchase in the Australian Capital Territory.
  • Section 17 Certificate (ACT)The ACT equivalent of NSW's Section 66W certificate. A legal document signed by a solicitor after advising the buyer, which waives the buyer's 5-business-day cooling-off period on a residential property purchase in the Australian Capital Territory.
  • Section 32 Vendor StatementA legal document in Victoria that the seller must provide before a contract is signed, disclosing key information about the property including title details, planning restrictions, and outgoings.
  • Section 32 Vendor Statement (VIC)A legal document in Victoria that the seller must provide before a contract is signed, disclosing key information about the property including title details, planning restrictions, and outgoings.
  • Section 66W CertificateA certificate issued by a solicitor or conveyancer in New South Wales that waives the buyer's 5-business-day cooling-off period, making the contract immediately binding. Only issued after the buyer has received legal advice.
  • Section 66W Certificate (NSW)A certificate issued by a solicitor or conveyancer in New South Wales that waives the buyer’s 5-business-day cooling-off period. Sometimes requested by sellers to make an offer more competitive.
  • Selection BiasA statistical problem that occurs when properties sold by auction are systematically different from those sold by private treaty, in ways the model cannot fully account for. If higher-quality properties preferentially go to auction, comparing their prices to private treaty sales overstates any auction premium.
  • Selection Bias (Sale Method)A statistical problem that occurs when properties sold by auction are systematically different from those sold by private treaty, in ways the model cannot fully account for. If higher-quality properties preferentially go to auction, comparing their prices to private treaty sales overstates any auction premium.
  • Self-Managed Super Fund (SMSF)A superannuation fund managed by its members (up to 6 people) rather than by a large fund manager. SMSFs can invest in property, but any advice recommending the establishment of an SMSF or the purchase of assets through one requires an Australian Financial Services Licence.
  • Seller Disclosure RegimeA legal requirement (introduced in Queensland from August 2025) for sellers to provide buyers with a disclosure statement and prescribed certificates about the property before the contract is signed.
  • Seller Disclosure Statement (QLD)A Form 2 document required under Queensland's Property Law Act 2023, which sellers must provide to buyers before the contract is signed. It discloses material information about the property. If the seller fails to provide it or it contains material inaccuracies, the buyer can terminate the contract.
  • Selling AgentA licensed real estate professional engaged and paid by the property seller (vendor) to market and sell the property. Also known as the listing agent or vendor's agent. Their fiduciary duty is to the seller, and their commission is typically a percentage of the final sale price, paid by the seller.
  • Serviceability bufferAn additional margin (currently 3 percentage points) that lenders must add to the loan interest rate when assessing whether you can afford the repayments. If your loan rate is 6.0%, the bank must check you can afford repayments at 9.0%.
  • SettlementThe final step in a property transaction where the buyer’s funds are transferred to the seller, the legal title is registered in the buyer’s name, and the keys are handed over. In most Australian states, this must happen electronically through a platform like PEXA.
  • Settlement AdjustmentsProportional calculations made at settlement to divide council rates, water charges, and body corporate levies fairly between buyer and seller based on the settlement date. The buyer reimburses the seller for any rates already paid that cover the period after settlement.
  • Settlement PeriodThe time between when contracts are signed (exchanged) and when ownership of the property officially transfers to the buyer. Typically ranges from 30 to 90 days in Australia and is negotiable between buyer and seller.
  • Shared EquityAn arrangement where the government owns a percentage of your property alongside you. You pay less upfront and borrow less, but when you sell, the government receives its share of the sale price, including any capital gain.
  • Shortfall Interest Charge (SIC) RateA rate set by the ATO each quarter, calculated as the 90-day bank bill rate plus 3 percentage points. The ATO uses this rate to calculate deemed earnings on FHSSS contributions, regardless of what your super fund actually earned.
  • Social facilitationThe tendency for people to perform differently when others are present. Arousal from being observed improves simple or well-practised tasks but impairs complex or unfamiliar ones.
  • SolicitorA fully qualified lawyer who can handle conveyancing as part of their legal practice. They can also advise on related matters such as tax implications, trust structures, estate planning, or disputes.
  • Special ConditionsAdditional clauses added to a standard property contract that address the specific circumstances of a transaction. Common examples include subject-to-finance, building and pest inspection, and sale of an existing property. Special conditions override standard conditions if they conflict.
  • Special levyA one-off charge raised by the owners corporation when the capital works fund does not have enough money to cover an unexpected or large expense. Must be approved by a vote at a general meeting.
  • Specific PerformanceA court order forcing a party to fulfil their obligations under a contract, rather than just paying damages. In property transactions, courts may order a defaulting seller to complete the sale because each property is treated as unique.
  • Stamp DutyA state government tax paid when you buy property. Most states now call it transfer duty, but the terms are interchangeable. You pay it once, at or shortly after settlement.
  • Stamp duty (transfer duty)A one-off state government tax paid when property ownership transfers to a new buyer. The amount is calculated as a percentage of the purchase price, with rates varying by state and territory.
  • Stamp Duty ConcessionA reduction or full exemption from transfer duty (stamp duty) offered by state and territory governments to eligible first home buyers. Thresholds and concession amounts vary by state.
  • Standard ConditionsThe pre-printed legal terms in a property contract that govern how the sale works, including provisions for default, interest on late payments, adjustments at settlement, and dispute resolution. These are the same for every transaction using that state's standard form contract.
  • Statement of InformationA document Victorian agents must provide for every residential property listed for sale. It includes the agent's estimated selling price, the median house price for the suburb, and details of three comparable properties sold in the past 6 months (or 12 months outside metropolitan Melbourne). NSW is introducing a similar requirement.
  • Statement of Information (VIC)A document required for every residential property sale in Victoria, prepared by the selling agent. Must include an indicative selling price and three comparable recent sales. Designed to reduce under-quoting by anchoring advertised prices to verifiable market evidence.
  • Statutory warrantyA legal obligation on builders to fix defects in new residential construction. Structural defects are typically covered for 6 years (up to 10 in Victoria), and non-structural defects for 2 years. These rights apply automatically under state building legislation.
  • Step-quotingA practice where an agent starts with a low price guide early in the marketing campaign and gradually increases it as the auction date approaches. By the time the guide reflects reality, buyers have already committed time and money to due diligence.
  • Strata Building Bond and Inspections Scheme (NSW)A NSW regulatory scheme requiring developers of apartment buildings of 4 or more storeys to lodge a bond equal to 2% of the construction contract price. The bond is held for 2 years and funds rectification of defects identified through mandatory independent inspections at 15-18 months and 21-24 months after the occupation certificate is issued.
  • Strata feesQuarterly payments made by owners of apartments, units, or townhouses in a strata scheme. They cover shared costs like building insurance, common area maintenance, and a sinking fund for future repairs.
  • Strata fees (body corporate fees)Quarterly charges paid by owners in a strata-titled property (apartments, units, townhouses) to cover shared costs like building insurance, common area maintenance, and a sinking fund for major repairs.
  • Strata levyA regular fee paid by owners in a strata scheme to fund the maintenance, insurance, and management of common property. Typically paid quarterly and set at the Annual General Meeting.
  • Strata reportA document obtained before purchasing a strata property that details the scheme’s financial health, fund balances, insurance, bylaws, meeting minutes, and any disputes or planned works.
  • Strata Special LevyA one-off charge raised by an owners corporation when the regular strata fund does not have enough money to cover an unexpected or major expense. It requires approval at a general meeting and is payable on top of normal quarterly levies.
  • Stress TestCalculating whether you can afford mortgage repayments if interest rates rise. ASIC recommends testing at 2 percentage points above your current rate. Lenders apply their own serviceability buffers, typically 3 percentage points above the loan rate.
  • StriatumA region of the brain involved in processing rewards and losses. Brain imaging studies show it responds more strongly to losing an auction than losing a lottery, contributing to overbidding behaviour.
  • Subject to SaleA contract condition that makes the purchase dependent on the buyer successfully selling their current property. This adds significant uncertainty for the vendor because the deal relies on a separate transaction they cannot control.
  • Subject-To ConditionA clause in a property contract that makes the sale conditional on a specific event occurring (such as loan approval or a satisfactory building inspection). If the condition is not met within the agreed timeframe, the buyer can terminate the contract and recover their deposit.
  • Subject-to-Inspection ConditionA clause in a property contract that makes the sale conditional on the buyer obtaining a building and pest inspection report that is satisfactory to them. If the buyer is not satisfied, they can terminate the contract and recover their deposit, provided they act within the deadline and meet any reasonableness requirements.
  • Substantially RenovatedA home where most of the original dwelling has been removed or replaced. Minor renovations like a new kitchen or bathroom do not qualify. The home must not have been occupied since the renovation was completed, and it must be the first sale after the work was done.
  • Subterranean TermitesThe most common and destructive termite species in Australia. They live in underground colonies and build sealed mud tubes to travel from soil to timber in a building. They consume timber from the inside, often leaving only a thin outer shell, making early detection difficult without specialist tools.
  • Sunk CostMoney, time, or effort you have already spent and cannot recover, regardless of what you decide to do next. In property buying, this includes inspection fees, legal review costs, and strata reports paid for before making an offer.
  • Sunk cost fallacyThe tendency to continue investing in something because of what you have already spent, rather than based on future value. Time, money, and effort spent on inspections and due diligence before an auction are sunk costs that should not influence your bidding limit.
  • Sunset ClauseA clause in an off-the-plan contract that sets a final date by which construction must be completed and the plan of subdivision registered. If the deadline passes, either party may be able to end the contract and the buyer's deposit is returned.
  • Sunset Clause (Subject to Sale)A provision in a property contract that lets the seller continue marketing the property while the buyer's contract is conditional on selling their own home. If the seller receives another acceptable offer, the buyer is given a short window (usually 48 to 72 hours) to remove the condition and commit unconditionally, or the seller can terminate the contract.

T

  • Taxable IncomeThe income figure on your ATO Notice of Assessment after deductions have been applied. Used by Help to Buy and the ACT Home Buyer Concession Scheme to determine eligibility.
  • The 1% ruleA maintenance budgeting guideline where you save 1% of your property’s value each year for repairs and upkeep. On a $800,000 home, that means $8,000 per year. Some years you spend less, some more — the figure is an average over time.
  • Title RegistrationThe government fee charged by your state or territory land titles office to formally record the change of property ownership. A separate mortgage registration fee applies if you have a home loan. Until registration occurs, the legal transfer is not complete.
  • Title SearchA check of the official land title records to confirm who owns the property, whether any debts or encumbrances are registered against it, and whether there are any restrictions on its use.
  • Trail CommissionAn ongoing annual payment from the lender to the mortgage broker, calculated as a percentage of the remaining loan balance (typically 0.15% to 0.275% per year). It is paid for as long as the borrower stays with that lender, giving brokers an incentive to keep borrowers on existing loans.
  • Transaction CostsOne-off costs paid at or around settlement to complete a property purchase, including stamp duty, conveyancing fees, inspections, loan application fees, and registration charges.
  • Two-Stage Hedonic RegressionA statistical technique that corrects for selection bias in property price comparisons. In the first stage, the probability of a property going to auction is estimated from its characteristics. In the second stage, this correction is applied to the price comparison, to isolate the effect of sale method from the effect of property quality.

U

  • Unconditional ApprovalThe lender's final, binding commitment to fund a home loan for a specific property, issued after all conditions (valuation, documentation, insurance, LMI if applicable) have been satisfied. Also called formal approval. At this point, the lender prepares loan documents for signing.
  • Unconditional ContractA contract with no conditions attached. When you win at auction, you sign an unconditional contract — there is no finance condition, no building inspection condition, and no cooling-off period. You are legally bound to complete the purchase.
  • Unconditional finance approvalAlso called formal approval. Your lender has assessed the specific property, verified your financial position, and committed to providing the loan. Unlike pre-approval in principle, this is a binding commitment from the lender, subject to standard conditions like no change in your financial circumstances.
  • Unconditional OfferAn offer to purchase a property with no conditions attached. Once accepted and contracts are exchanged, the buyer is fully committed. Failure to complete the purchase risks forfeiting the deposit and being liable for the seller's damages.
  • Under-quotingWhen a real estate agent advertises a property at a price range they know is below what the vendor is willing to accept. Illegal in all Australian states. Victoria has the most active enforcement regime, with a dedicated under-quoting task force.
  • UnderquotingThe practice of advertising or representing a property's expected selling price as lower than the agent's genuine estimate or the seller's minimum acceptable price, in order to attract more buyer interest. Underquoting is illegal under the Australian Consumer Law and subject to penalties in all states and territories.
  • Unimproved land valueThe assessed value of a block of land as if it were vacant, with no buildings or improvements. Used by NSW and Queensland councils to calculate rates.
  • Unit entitlementA number assigned to each lot in a strata scheme that determines your share of levies and your voting power. A lot with a higher entitlement pays a larger share of costs.
  • Upfront CommissionA one-off payment from the lender to the mortgage broker, calculated as a percentage of the total loan amount (typically 0.65% to 0.70%), paid when the loan settles. The borrower does not pay this directly. A larger loan means a larger commission for the broker.

V

  • Vacancy rateThe percentage of rental properties in an area that are unoccupied at a given time. A vacancy rate below 3% generally indicates strong tenant demand.
  • ValuationThe lender's independent assessment of what a property is worth, used to decide how much they will lend against it. If the valuation comes in below the agreed purchase price, the lender may reduce the loan amount, requiring the buyer to cover the gap.
  • Valuation rangeThe estimated price band a property is likely to sell within, derived from adjusted comparable sales data. A range is more realistic than a single figure because no two properties are identical.
  • Valuation ShortfallWhen a lender's independent property valuation comes in lower than the agreed purchase price. The lender will only lend based on the lower figure, meaning the buyer needs to cover the difference from their own funds or the loan may not proceed.
  • Vendor BidA bid made by the auctioneer on behalf of the seller. Used to start bidding or move the price toward the reserve when buyer bids slow. Must be announced clearly and can only be made below the reserve price.
  • Vendor Disclosure DocumentA legally required statement from the seller disclosing key information about the property before the buyer signs the contract. Known as a Section 32 in Victoria, Form 1 in South Australia, and Form 2 in Queensland. In NSW, the equivalent information is provided through prescribed documents attached to the contract.
  • Vendor RectificationAn arrangement where the seller agrees to repair specific defects identified in an inspection report before settlement. The scope of work should be documented in writing as part of the contract, and the buyer verifies completion at the pre-settlement inspection.
  • Vendor's StatementA legal document prepared by the seller before listing, disclosing material facts about the property including title details, encumbrances, zoning, and rates. Known as a Section 32 statement in Victoria. The content and timing requirements vary by state.
  • Voluntary ContributionsSuper contributions you make above the compulsory amount your employer pays. These can be salary sacrifice (deducted from your pre-tax pay) or personal contributions from your after-tax pay. Only voluntary contributions count towards the FHSSS.

W

  • Water ratesCharges from your water authority covering a fixed service fee for water supply and sewerage, plus a usage charge based on how much water you consume. Homeowners pay both components.
  • Winner's CurseThe tendency for the winner of a competitive auction to have overpaid relative to the item's true value, because they had the most optimistic valuation among all bidders. In property auctions, competitive pressure and time urgency can amplify this effect.
  • Written NoticeA formal written communication (letter, email, or fax) delivered to the seller, their solicitor, or their agent to exercise a contractual right such as cooling-off. Verbal communication -- including phone calls -- does not satisfy notice requirements in property contracts.
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