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Real Estate and Financial Terms

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Buying, selling or renting property in Australia and having trouble understanding what they're saying? To help you figure it out, we've created brief explanations of the words used. For more complete information, see your local real estate agent, financial advisor or solicitor.


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capital expenditure The cost of an improvement made to extend the useful life of a property or to add to its value.
capital gain The monetary gain on the sale of a capital asset when you sell an asset for more than you paid for it.
capital improvement Any structure or addition to a property erected as a permanent improvement that adds to its value and useful life.
capital gains tax A federal tax on the monetary gain made on the sale of an asset bought and sold after September 1985.
capped loan A loan where the interest rate is not allowed to exceed a set level for a period of time, but unlike fixed rate loans, is allowed to drop.
caveat Latin term meaning 'beware'. Used usually in the form of a contract clause as a warning that stipulates a particular requirement. 
caveat emptor A Latin phrase for "Let the buyer beware". It means that the burden is on the buyer to be satisfied with any item before purchasing.
Certificate of
A document issued by a local government to a developer permitting the structure to be occupied. This generally indicates that the building is in compliance with public health and building codes.
Certificate of Title A document that details the description of a property (land dimensions) and the name and details of the registered owner, and whether there are any encumbrances (mortgages or easements) on the property. It must be produced by the seller before the sale of the property.
chattels Chattels are items of personal property. Real chattels are buildings and fixtures. Personal chattels are clothes and furniture. Chattels may be included in a sale. 
 clear title A title that is free of lien or legal questions as to the rightful ownership of the property in question.
collared rate A variable rate loan with a set upper and lower limit beyond which the interest rate charged cannot move past.
collateral An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.
commission A fee (usually a percentage of the sale price of a property) paid to a real estate agent for negotiating a real estate transaction.
common property An area used by many people. Areas of a building, land or amenities within a strata title property that are shared by all owners such as a driveway.
company title A property title that applies when owners of units in a block form a company.
common law An unwritten body of law based on general custom in England and used to an extent in Australia.
construction loan Also called a Building Loan. A short-term, interim loan paid to registered builders for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.
compound interest Interest that is paid on both the accumulated interest as well as on the original principal.
Contract of Sale A written agreement outlining the terms and conditions to sell or purchase a property.
contract A legally enforceable agreement between individuals or entities. In real estate, contracts are exchanged when the deposit is taken.
conveyancing The legal process for the transferring ownership of real estate.
counteroffer An offer made in return by the party who rejects an unsatisfactory offer.
countersigned Additional signature or signatures required to guarantee the validity of a document.
covenant The terms, conditions and restrictions noted on the title to specify the usage of a block of land or the buildings on it. A covenant may affect future plans or resale of the property.
Cover Note A document issued by an insurance company giving temporary insurance until a formal policy is issued.
credit history A record of an individual's current and repaid debts which is usually used by a lender to assess the risk of a potential borrower.
CRAA The Credit Reference Association of Australia holds credit details on Australians.
creditor A party to whom money is owed.
crossed cheque A cheque with two parallel vertical lines drawn across it to specify that the cheque must be paid into an account and not cashed.
cul-de-sac A street with only one entrance, the other end being closed. Often valued for the privacy provided to homes in the street. It is also called a Court or Dead End Street.

Note: We assume no liability resulting from any errors or omissions. Translation . . . we've done our best to bring you accurate information. However, you should seek your own independent advice as to the accuracy of the information supplied.

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