ESTATE AGENCY JARGON BUSTER


Estate Agency Jargon Buster

Our handy guide to estate agent terminology

PROPERTY JARGON BUSTER

If you’re looking to buy or sell a house for the first time, you’ll probably come across some new words or phrases.

 

Our A-Z guide will help you to make sense of all the jargon before you leap into the world of property

 

Acceptance The verbal agreement of accepting an offer on a property.

 

Agreement in Principle Also known as a Decision in Principle (DIP). A statement from a mortgage lender confirming that they will lend a certain amount to you in advance of you finalising a purchase of a property. This can help you prove to estate agents and sellers that you’re a serious buyer.

 

Assured Shorthold Tenancy (AST) The most common form of tenancy agreement between a landlord and tenant. This sets out the legal obligations of both sides and gives the tenant the right to live in the property for a certain period of time.

 

Arrears If you fail to keep up with your mortgage repayments and get into debt, you will be in arrears.

 

Asking Price The price at which a property is offered for sale.

 

Buildings insurance Any structural components such as the roof, walls or ceilings should be covered by buildings insurance.

 

Bridging loan A short-term loan used to ‘bridge’ the gap between the sale of a current property and purchase of a new one.

 

Chain If you’re buying a property, it’s likely you’ll be selling a current one. Your buyers may also be purchasing a new property and so on. This is called a chain. If one purchase falls through, others in the chain can be impacted.

 

Completion This is the point when the sale of a property is finalised, all monies are handed over and you can move in.

 

Conditions of Sale The conditions in the contract which state the terms/ rights of the buyer and seller.

 

Conveyancing The legal process of transferring the ownership of a property from one person to another, usually done by a solicitor, lawyer or specialist conveyancer.

 

Deeds Documents confirming the details of a property’s ownership. Also known as title deeds.

 

Deposit The money you’ll need to pay upfront when buying a home, the remainder is due upon completion.

 

Early Redemption Charge If you pay off a loan early, you might be liable to pay an early redemption charge. Always check this with your mortgage provider before agreeing to a new contract.

 

Energy Performance Certificate (EPC) This document shows the energy efficiency of a property rated from A-G (best to worst) and gives an indication of running costs.

 

Exchange of contracts At this point, the buyer and seller sign the contract for sale. After this has taken place, no terms can be changed and the sale of a property is legally binding.

 

Freeholder The person who owns the property and the land it sits on indefinitely.

 

Gazumping Before exchange of contracts, a buyer or seller can withdraw at any point. If a seller is presented with a better offer before this time, they can choose to accept it, which unfortunately means the previous buyer has been ‘gazumped’.

 

Guarantor A person that promises to pay back a loan (e.g. mortgage) if you cannot pay the money you borrowed back to the lender.

 

Help to Buy An equity loan scheme from the Government which helps people will smaller deposits get on the housing ladder.

 

Land Registry The government department which registers the ownership of land in England and Wales. Conveyancers will check the current ownership of the land as part of their due diligence.

 

Leaseholder A person who has a lease from the freeholder to own the property for a fixed period of time.

 

Loan to Value (LTV) The amount a buyer can borrow from a mortgage lender based on the value of the property. For example, if a property is worth £100,000 and the mortgage lender’s maximum LTV is 70%, the maximum amount you can borrow in the form of a mortgage is £70,000.

 

Market appraisal An estate agent will visit your property in order to estimate its current market value before it goes on the market (for sale or to let).

 

Mortgage Unless you can buy a property outright, most people will need a mortgage. This is the loan secured against the property. You must keep up with payments or the property can be repossessed.

 

Negative Equity If the market value of a property drops below the outstanding mortgage secured on it, an owner will be in negative equity.

 

Offer If you want to secure a property, an estate agent will ask whether you’d like to make a formal offer. If the seller accepts this, the property will usually be taken off the market and listed as ‘sold – subject to contract’.

 

Redemption Figure If you’re selling an existing home which has a mortgage, you’ll need to settle the outstanding balance (including charges and interest). This is known as a redemption figure.

 

Searches A conveyancer will make a number of enquires to the Land Registry and Local Authority to make sure there aren’t any issues with the property or surrounding areas.

 

Stamp Duty Land Tax (SDLT) The tax owed by a buyer when purchasing a property. Rates vary between 1-3%, but new laws mean you’ll have to pay an additional 3% if you’re purchasing more than one property.

 

Subject to contract A provisional agreement which comes before the formal exchange. This isn’t legally binding, but a property will usually be taken off the market and listed as ‘sold – subject to contract’.

 

Surveying A qualified expert (usually by RICS) will assess a property and complete a report outlining its condition.

 

Under offer This means another buyer is interested in a property and has made an offer to the seller, which is being considered.

 

Valuation A survey conducted by a qualified surveyor to estimate the current market value of a property.

 

Vendor A synonym a for someone selling a property.

 

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