De-coding Real Estate Jargon Used On The Northern Beaches

Queenscliff beach shot

Buying or selling a property can be overwhelming at the best of times, particularly when the real estate industry is full of words and phrases that, to the untrained ear, can sound like a foreign language. So to help make things easier, I’ve helped de-code some of the most commonly used terms in real estate on the Northern Beaches of Sydney.


If you come across a property that is described as being ‘Leasehold’, it means that you may buy the property (eg. A house or land) but you do not entirely own the land it stands upon. If you are buying a property that is leasehold then it pays to find out how long there is left on the lease as there will be a fee involved to renew the lease. Many homes on Eastern Hill are owned and leased by St Patrick’s church so are leasehold homes. Don’t be afraid to purchase a leasehold property, just make sure you understand the renewal fees involved. Most of the homes on Eastern Hill in Manly are highly sought after so well worth coming to terms with the concept of leasehold land.

Insular Peninsula

This is an affectionate term commonly used to describe the Northern Beaches of Sydney. You may also hear the term “God’s country” used…which is another term residents use fondly to describe the area.

Market Appraisal

A market appraisal (often mistaken as a property valuation) is when a real estate agent gives their opinion on what a property will sell for in the current market. Legally this must be based on comparable sales and the market at that point in time. Beware of agents that have a lack of experience and/or are keen to overprice your property in order to attempt to gain business. Overpricing a home can excite property owners but will damage the end sales result.

Note: If you need an estimate on the value of your home for legal purposes (ie. for obtaining finance or in the case of a dispute, a divorce or a deceased estate) a market appraisal alone will not be enough. You will need a formal valuation by a qualified valuer.


This term is used to describe when the seller agrees to sell the property to one buyer but then accepts an offer from someone else for a higher price or more attractive terms.

Contract for Sale

In NSW a residential property is not able to be advertised for sale until a Contract for Sale has been prepared.The contract must contain a copy of the title documents, drainage diagram and the Zoning Certificate (s 149) issued by the local council. Property exclusions must also be included and a statement of the buyer’s rights under the cooling-off period must be attached. The draft contract must be available for inspection at the agent’s office. For any McGrath properties the contract for sale is (in most cases) able to be obtained from the McGrath website ( under the property listing.

Under Contract/Cooling Off Period

These terms mean that someone has agreed to purchase a property and has put down a 0.25 per cent deposit to hold it in their name while they conduct their searches and get their finance in order. At the end of the cooling off period, the purchaser is then expected to produce the rest of the exchange deposit (generally 5% or 10% of the sale price). The normal timeframe for a cool off is 5 business days however if agreed by both parties this can vary. Should the buyer fail to pay the full deposit amount after the cooling off period then they will forfeit the 0.25% deposit to the vendor. They are entitled to request an extension on the cool off, however a vendor has the right to refuse their request. Once a property has gone under contract, a vendor is not able to change their mind or take a higher offer for the property. It is a great way for buyer’s to avoid being gazumped as it secures a property for a short period while they get organised. The vast majority of all our private treaty sales are sold this way.


Gearing is a term used to describe borrowing money to invest. Debt gives you the ability to speed up both returns and losses, hence the common terms leverage and gearing. There are three types of gearing: positive, negative and neutral. Negative gearing means your expenses and borrowing costs are higher than your returns, neutral is when your costs are matched evenly with the investment returns, and positive is when the costs are less than the returns, giving you a profit.

Strata title

Legal ownership title to a “lot” within, typically, a large multi-unit property such as an apartment block. It usually relates to part of the property within the internal walls, floors and ceilings. These titles also include membership to the owners corporation or body corporate.

Buyer’s market

Buyers have the advantage when it comes to negotiating a price. Usually this is because market conditions are in their favour, such as too many properties to pick and choose from, prices are coming down or sellers are desperate to sell. The opposite to this is a sellers market, where the seller has the advantage.

Tenants in common

This is when a property is owned by two or more people but they are not joint owners. It’s often used if purchasers have an unequal ownership stake such as 60-40 per cent, or there are multiple owners. Each part owner is allocated a percentage of the property through a separate agreement.


This is a formal legal statement that asks the titles office to notify the person who lodged the caveat before any transaction or dealings on the title occur. It does not necessarily stop a transaction going ahead but alerts all parties that someone has an interest in the transaction or property.

Feng Shui

An Asian belief that physical characteristics of a property and its aspect and position will affect the fortunes of the owner.

Median price

This is the price in the middle of recent property sales in a particular location. In contrast, an average price is the number of properties sold divided by their combined total sale price.


Yield is the percentage return from a property. It can include two factors, rental income and price growth.


Often investors can claim a portion of the depreciating value of their property. A depreciation schedule prepared by a quantity surveyor lists the items and different rates of depreciation that can be claimed against tax. When it comes time to sell, these amounts are deducted from the cost base to calculate any potential capital gain.

Capital gains tax

When an investment property is sold, the profit between the cost base (which is the purchase price, cost of improvements, depreciation adjustments and inflation) and the sale price is subject to CGT. If you have owned the property for more than 12 months this profit is halved, known as the 50 per cent exemption. Tax is then paid on the remaining profit at your marginal tax rate.

 Company title

An old-style title that gives ownership of shares in a company that, in turn, owns the property. The shares allow you to occupy your part of the property. Most institutions are unwilling to lend money against a company title as it does not give them clear access to the property, only to the shares.

Agency Agreement

An agency agreement is a legally binding document outlining the terms and conditions between a real estate agency/real estate agent and a vendor. There are various types of agency agreements including exclusive agency agreements, open agency agreements and sole agency agreements. The most common agreement is an exclusive agency agreement which appoints one real estate agent with the opportunity to sell a property. The agency agreement will specify how long it is for (generally 3 months) and what costs are involved if the agent sells the property. For further details see:

Landlord insurance

Unlike building or contents insurance, this type of cover is specifically for property investors. It can help protect or compensate landlords from specific risks such as malicious damage by a tenant, accidental damage, loss of rental income or even landlords legal liability.


About Tim Cullen

Since joining McGrath Estate Agents 18 years ago, Tim Cullen has defined himself as a first class industry leader with an outstanding track record and rapidly growing client base. He consistently ranks in the top 50 agents nationwide in the Real Estate Business’ Top 100 Agents List, ranking as high as 21st in Australia. He is passionate about real estate and delivering premium results for his clients.

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