Real estate glossary & terms

Understanding real industry jargon puts you in a better, more confident position

Administration/Application fee

This is a charge levied by the lender to cover the costs of processing a mortgage application. If an application is not completed, the fee may not be refunded.

Agent

A person or company authorised to act for another (usually on behalf of the owner) in the selling, buying, letting or management of a property. Commonly used to refer to licensed real estate agents and real estate representatives. Agency is their practice.

Annual Percentage Rate (APR)

The APR is a compound interest rate figure used to compare different mortgages. Defined by law, it includes repayments on the loan plus any mortgage related fees such as booking, arrangement or basic valuation fees. The APR shows the true cost of borrowing over the entire term and should appear on all mortgage illustrations.

Applicant

The person or party applying for a property to buy or rent.

Appraised value

The value of a property, as estimated by a surveyor.

Appreciation

The increase in the value of a property as a result of changes in market conditions.

Asset

Any form of property owned by a person, including currency, stocks and enforceable claims against others.

Auction

A sale usually in public, by an auctioneer, in which property is sold to the highest bidder.

Auctioneer

One who is licensed to sell, or offer for sale, real estate where persons become purchasers by competition, being the highest bidders.

Bond (Rental)

Consideration (monetary form) held usually under a lease agreement to ensure performance of lease terms and conditions. Normally refundable if possession of property and its contents are returned in good condition and as pre-agreed.

Buy-to-let mortgage

A type of mortgage specifically designed for people buying a property with the intention of letting it out.

Capital Gain

The amount by which the net proceeds from resale of a capital item exceed the book value of the asset.

Capital Gains Tax

Tax payable on the Capital Gain made on the sale of an investment property. Refer to current requirements of capital gains in Cyprus.

Client

One who engages the services of an agent or valuer and to whom the agent or valuer should look for payment of his commission or fees, in return for services rendered.

Commercial Property

Property intended for use by all types of retail and wholesale stores, office buildings, hotels and service establishments. In many property circles, commercial property refers specifically to office property.

Commission

The estate agent's fee for selling the property. In other words, the fee or payment made to an agent for services rendered, such as the sale or letting out of a property, often calculated with reference to the value of the property, contract or agreement.

Conditions of sale

The details that determine the rights and duties of the seller and buyer. These may be national, statutory or the Law Society's conditions.

Contents insurance

Insurance that covers the contents of a home, including electrical goods, carpets, furniture and curtains.

Contract

A legal agreement between the seller and buyer of a property, which binds both parties to complete the transaction.

Conveyancer

A qualified individual such as a solicitor or licensed conveyancer who deals with the legal aspects of buying or selling a property.

Conveyancing

The legal process surrounding the transfer of ownership of a property from seller to buyer.

Conveyancing fee

The charge made by a solicitor or conveyancer for undertaking the legal process necessary for the transfer of ownership of a property.

Counter Offer

A new offer as to price, terms and conditions, made in reply to a prior unacceptable offer. Normally the counter offer terminates the previous offer.

Credit history

A history of an individual's open and fully repaid debts. Checking a credit history helps a lender to assess the likelihood that a prospective borrower will maintain their mortgage repayments.

Date Of Settlement

The date on which a contract of sale is finalised and final payment is made.

Deed

A document executed under seal. For example, a conveyance.

Deflation

A situation in which prices are falling (the opposite situation to inflation).

Deposit

Percentage of total consideration, or an agreed amount, paid on exchange of contract for purchase of an asset.

Depreciation

The decline or reduction in the value of a property caused by changes in market conditions (the opposite of appreciation).

Detached

Term used to describe a property that stands alone and is separated from all others.

Development

A newly built property or an older property that has been refurbished and modernised.

Donums

Term of measuring landed area in Cyprus equivalent to 1338 square meters.

Draft contract

Preliminary version of the contract.

Excess

The initial sum paid on an insurance claim.

Encumbrance

A charge or liability on a property; for example, a mortgage or a special condition on the use to which it may be put (e.g. easements, restrictions and reservations).

Exclusive Listing

Where a single agent only is appointed to sell or lease a property under an Exclusive Agency Agreement. Under the terms of an Exclusive Agency Agreement, the appointed agent is usually entitled to any commission resulting from a transaction relating to the property, even if it is sold / leased by another agent or the vendor during the term of the agreement. Also known as an Exclusive Agency or a Sole Agency.

Fittings

Installed items that may be removed from real estate without causing irreparable damage to the land, structure or use of the premises.

Fixed Interest Rate

An interest rate that remains unchanged for a set period, for example, for the whole term of the loan, or the first year of a loan.

Fixtures

Those parts of a property affixed to structures or land, usually in such a manner that they cannot be independently moved without damage to themselves or the property housing supporting or pertinent to them. Fixtures are usually included in a sale and commonly include items such as carpets and awnings.

Flexible mortgage

An arrangement whereby you can increase or decrease your mortgage.

Foreigner

Under Cyprus Law "alien" is any person who is not a citizen of the Republic and includes a foreign controlled company – not including non-Cypriot spouses of the citizens of the Republic.

Freehold

Absolute ownership subject to limitations imposed by the state; also known as a fee simple estate. An estate held for perpetuity.

Guarantor

The lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrower's debt if the borrower defaults.

Holding Deposit

An amount given by a buyer to the estate agent acting for the seller. It shows the buyer's serious commitment to the property and is commonly 10% of the purchase price depending on the time agreed for the fulfillment of the transaction.

Inflation

The general rise in prices over time.

Interest

A fee payable by a borrower to a lender (such as banks or financial institutions) in return for the loan of money, in addition to the principal repayments.

Joint Tenancy

The ownership of land in common by two or more persons where there is a right of survivorship i.e. where on the death of one joint owner the land as a whole vests in the survivors.

Land registration

The process of registering the legal title of a plot with the Land Registry.

Lease

A contractual agreement by which one party conveys an estate in property to another party, for a limited period, subject to various conditions, in exchange for something of value, but still retains ownership.

Leasehold

Possession and use of a property by virtue of a lease.

Listing

(a) A term commonly used by agents for obtaining an instruction to sell or lease real estate;
(b) The recording of properties as being available for sale.

Maintenance

The act of keeping, or the expenditure required to keep, an asset in condition to perform efficiently the service for which it is used.

Management Agreement

A written contract recording the agreement between the owner and manager of real estate concerning the duties, responsibilities and liabilities of the owner and the manager in the management of that real estate.

Management Fee (Property)

The fee charged by the property manager to the landlord for the service of managing a property or properties. This service typically includes collecting rents, paying recurrent property expenses, selecting and supervising property service contractors such as cleaners, plant service providers and security. It may also include negotiating new leases, marketing of the property, rent reviews and overseeing building refurbishment. In respect of property trusts, it refers to the fee levied on unit holders by the responsible entity to cover the cost of trust administration.

Managing Agent

A real estate agent authorised to manage the business affairs in connection with the property of another.

Market Price

The price actually paid, or agreed in a contract to be paid, for an asset. It differs from market value in that it relates to an accomplished fact, whereas market value is and remains an estimate until proved. Market price may involve circumstances not normally included in market value.

Market Value

Market value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.

Median

The middle number when data is arranged from lowest to the highest in sequence. If there are two median scores, they are averaged to provide the true median. The median is also known as the 50th percentile.

Mortgage

A mortgage of land is a transfer of an interest in the land as security for a debt. It enables the creditor, in the event of the debtor being unable or unwilling to pay off the debt, to enforce the dept against the land, for example by selling the land and recouping what he is owed. A mortgage may be granted by a landowner to secure a bank loan or in the commercial sphere to secure a loan to finance a purchase of property.

Mortgage Guarantee Insurance

Paid by the borrower to protect the lender against failure by the borrower to keep up mortgage repayments or to pay back the loan in full when it is due.

Mortgagee

The creditor, the lender of the money to whom the mortgage is granted.

Mortgagor

The debtor or borrower in a mortgage.

Notice of Termination

The notice given by either the landlord or tenant that they want to end the lease agreement and vacate the property in compliance with the terms and conditions of the lease.

Notice to Quit

A legal notice served on tenants requiring them to vacate the property due to a breach of lease terms.

Offer

The consideration offered to purchase or lease a property.

Owner

In relation to land, the owner includes every person who jointly or severally whether at law or in equity:
(a) is entitled to the land of an estate in freehold possession; or
(b) is entitled to receive rent or profits thereof, whether as beneficial owner, trustee, mortgagee in possession or otherwise.

Penalties

A specified charge that is levied by the lender under certain circumstances, usually for full or part repayment within a specific period linked to a discount, tracker, fixed or other product type.

Plot

Is the area of land on the Title Deed.

Premises

Any land and the improvement on it, a building, store, shop, apartment, or other designated structure.

Principal

(a) One of the main parties to a transaction for example the buyer and seller are principals in the purchase of property.
(b) The amount borrowed or the amount still owed on a loan separate from interest.

Private Sale

Where an owner offers a property for sale without engaging an agent.

Property

All of the rights of ownership, including the rights of possession, to enjoy to use and to dispose of a dwelling or a piece of land.

Property Management

The management of a property on behalf of the owner. For example, the leasing of space, collection of rents, selection of tenants and generally the overall maintaining and managing of real estate properties for clients.

Rent

A payment made periodically by a lessee to a lessor for the use of premises. Rental.

Repossession

When the mortgage lender takes possession of a property due to non-payment of the mortgage.

Residential Tenancy

The lease of residential premises for residential purposes.

Seller's Market

The condition which exists when, under competitive conditions, the pressures of supply and demand are such that market prices are at a relatively high level, giving the seller an advantage. An under-supply causing prices to increase.

Settlement

This is the final stage of the sale when the purchaser completes the payment of the contract price to the vendor and takes legal possession of the property.

Settlement Date

The date on which a contract of sale is finalised and the balance of money is paid for the property.

Sole agent

When a seller chooses only one estate agent to sell their property.

Tenancy Agreement

A form of lease, generally in an abbreviated form.

Tenant

A person or entity paying rent in exchange for the occupancy of a building or dwelling. See also Lessee.

Tenure

Conditions on which a property is held (i.e. length of lease).

Title Deed

Official document evidencing the ownership of property.

Under offer

The status of a property for sale when a seller has accepted an offer from a buyer, prior to exchange of contracts.

Vendor

In real estate transactions, the person(s) or entity selling the property.

Yield

The derived percentage return of a property assessed from the net income and the market value or price. It is calculated by dividing the net income by the opening market value or price.