Glossary

Throughout your journey of buying or selling a property you may come across language you are unfamiliar with. In our handy guide we provide explanations for some of the most commonly used jargon and acronyms, with easy to understand definitions and examples.

Agent

Commonly known as an Estate Agent, the Agent is the representative responsible for the buying or selling of a property.

Appraisal

The current value of a property determined by an Estate Agent, after accessing local sold prices in the last 90 days and what it could sell for it goes onto the market.

APR

Annual percentage rate. This is the rate of interest payable on your mortgage or bridging loan. We recommend speaking to an independent financial advisor to discuss this further in depth.

Bridging Loan

A loan that is provided to ‘bridge’ the gap when waiting for an existing property to sell, and to be used towards the purchase of another property before yours has sold. They tend to carry high interest rates and are often only seen as a temporary fix.

Buy To Let

A property bought with the intention of letting it out to tenants and not to be lived in by the owner.

Chain

A chain refers to the people involved in a property transaction. The buyer and seller would form a chain of 2. If the seller also went on to purchase a property, there would be a chain of 3 and so on. The larger the chain the less desirable you may seem to an estate agent. Careful management of a chain is vital by your agent and solicitor.

Commonhold

A Commonhold allows you to own an individual house, flat or non residential unit that makes up part of a larger complex or development. You own your ‘Unit’ whilst communal areas are jointly owned by the other ‘Unit Holders’, with a shared responsibility for the likes of outdoor spaces, hallways etc. that ares sometimes managed by a Commonhold or Residents Association. Find out more

Completion date

The exciting date when you would be able to move into your new home and pick up the keys

Conveyancer

The individual who deals with the legal process of purchasing and selling a property, and moves the ownership of a property from one person to another, typically a qualified solicitor or a conveyancer.

Covenant

A formal agreement, clause in a contract/deed, or the rules that govern a property. A ‘restrictive covenant’ for example, may limit the occupation or use of a property.

DEA

Domestic Energy Assessor. This is the individual that will conduct the energy performance certificate (EPC).

Deed

The legal document that assigns ownership of a property or land and the right to possess it.

Deposit

The amount of money that a buyer has ready to put down towards the purchase of a property. The remaining balance will usually be made up by a mortgage or bridging loan.

Disbursements

These are fees that can be charged by your Estate Agent, Solicitor or Conveyancer that do not form part of their ‘legal fee’ e.g Searches.

Down Valuation

If you have agreed to purchase a property at a particular price but the mortgage valuer disagrees with the amount and feels it is worth less.

Dwelling

Quite simply this means a property; a bungalow, cottage, flat, house, or any other type of residence where someone may live.

Early Repayment Charge

Sometimes referred as an ERC, an Early Repayment Charge is billed by your mortgage provider for paying off your mortgage before the end of a fixed term. It can be a percentage of the owed amount or fixed amount. If you are concerned about this it is best to speak to an independent financial advisor.

Equity

The difference between the amount you owe and the value of your home is your equity. Negative equity is if you owe more against the property than it is worth.

EPC

Energy Performance Certificate. Similar to when you buy a kitchen appliance; you will often see a coloured graph giving the product a rating between A-G. When a property is sold it will require a similar graph and the energy assessor will check several factors to see how energy efficient a home is and its environmental impact. The property is then given a rating between A-G, with A being the best and G the worst.

Exchange of Contracts

This is when a sale/purchase becomes legally binding and a completion date is set. You can have a ‘simultaneous exchange and completion’ which is when exchange and completion are the same date.

Freehold

If the property you are interested in is freehold it means you are buying the property and the land that it sits on, usually including any gardens/outside space.

FTB

An acronym for First Time Buyer, shortened by estate agents and commonly used in property listings.

Gazumping

This occurs when a vendor has accepted one offer but then subsequently accepts another higher offer. It is a common misconception that this is illegal is in England but it isn’t.

Gazundering

Gazundering is when a buyer lowers their offer just before the signing of contracts, despite already having submitted and agreeing a price with the seller. Sometimes this forces the seller to accept the lower o their plans will be well advanced. Well after the offer has been accepted by the seller, the buyer will put it a last minute offer to drive down the price.

Ground Rent

Ground rent refers to a regular payment by a leaseholder to a freeholder. A ‘peppercorn ground rent’ is the same but it is usually a nominal amount or a token, usually £1 per annum.

Guide Price

This used to be a term reserved for auction properties and was an attractive price to entice bidders at auction but the final price achieved would invariably be above the guide price set. It has crept into private treaty sales but does not necessarily have the same meaning and may just be a general indication of what the seller may be prepared to accept.

HMO

House in Multiple Occupation. There are particular parameters that will qualify a property to be an HMO. Where 3 or more tenants live in a property and form more than one household and you share toilet, kitchen and bathroom facilities.

IFA

Independent financial advisor.

Leasehold

A property that does not own the land that it sits on.

Mortgage Valuation

A requirement if you are purchasing with the aid of a mortgage; a surveyor will assess the property you intend to purchase or remortgage and confirm the value you are paying. This is to protect the lenders asset.

Mundic

The name given to building blocks made from waste mining material and mixed aggregates, found in Cornish properties built between 1900 – 1960’s. If purchasing a property built in this period you will need a mundic block test to determine if the property is classed as mortgageable.

Mundic Block Test

A test on a property where multiple samples of the structure are taken away and tested to determine its classification, whether it is structurally stable and safe. There are multiple classifications but anything below a ‘C’ is considered unmortgageable due to the risks is poses.

OIEO

OIEO stands for ‘Offers in excess of’. A property may be advertised at an offers in excess of price as the vendor expects to achieve above the value stated.

OIRO

‘Offers in the region of’ similar to offers in excess of but the vendor may consider an offer below the price stated but may also expect to achieve above the price stated.

POA

POA is an acronym for Price on Application, or in other words, get in touch and we'll discuss the price with you. This is more commonly used on unique property opportunities, such as the purchase of a business or a large estate etc.

Searches

Checks of local council records for planning applications and restrictions, etc.

Section 106 (S106)

If a property is advertised as S106 or Section 106 there is a restriction on who can purchase it. The buyer would need to have a strong connection to the local area; usually having been a resident for 3 years or more. The properties are often discounted from full market value and/or part owned by a housing association.

Shared Ownership

A property that is jointly owned by yourself and usually a housing association. You may each have a different percentage share of the property and may pay rent on the percentage you don’t own.

SDLT

Stamp Duty Land Tax. This is the tax you pay on the purchase of your home and only applies to properties over a certain value.

SSTC

Sold Subject To Contract; if a property has an agreed sale but has not exchanged contracts yet it is SSTC.

Survey

A detailed report into the property and should identify any material defects in the structure. Different levels of survey will either go into greater or lesser detail.

Tenant/s

Usually an individual or group that lives in a rented property.

Title Deed

Sometimes referred to as just the ‘title’, it is a legal deed that constitutes yours or somebody else’s proof of ownership of the property.

Under Offer

Can be the same as sold subject to contract but usually differs by a sale being agreed, but solicitors are yet to be instructed.

Vendor

The individual/s selling a property. They may not be the owner but should have the right to sell the property on behalf of the owner.


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