Property Sales Jargon
Since buying a property in St Albans is a big commitment, it’s important to learn and understand a number of new terms and phrases which you may come across in the buying process. We’ve put together a list of property sales jargon so you always know where you stand.
Buyer: The person who pays a deposit and commits to a purchase of a property.
Seller: The person selling the property to the other party who is paying money to buy it.
Vendor: Another term for seller.
First Time Buyer: A person who has never bought or owned a property previously.
Freehold: This means to own both the property and land attached to it.
Leasehold: An alternative to a freehold that means you own the property but not the land attached to it. This often relates to flats and apartments contained within a larger building.
Commonhold: This is usually implemented in buildings or blocks of flats or apartments. The buyer owns the property freehold and all the property owners work together to manage the building or estate, such as providing maintenance and repairs.
Deposit: A large sum of money provided by the buyer to secure the purchase of a property. This is usually a low percentage of the full price. Once paid it typically means the buyer is committed to the purchase of the property.
Mortgage: The money loaned from a bank or similar financial lender which is paid back over a fixed period of time with interest by the buyer. If mortgage repayments are not maintained, the property could be seized by the lender and sold to recover their money.
Bridging Loan: A short-term loan that allows the buyer to purchase a new property before they have sold their existing one.
Equity: Also known as capital, it refers to the amount of money invested into a property. Over time this increases as the mortgage is paid off and the market value of the property increases.
Surveyor: A qualified expert who is hired to examine and identify any issues or benefits within a property before the sale or purchase proceeds. It may require the seller to carry out repairs, or lower the price for the buyer.
Building Survey: This is carried out before the sale of property, to run a report on the structural condition of the property.
Covenant: A legal term that may be added to a property deed which may affect how the property or land is used. Two types of covenant can be applied: positive or restrictive. A positive covenant requires the buyer to carry out an action, such as the maintenance of a property feature, while a restrictive covenant limits how the land is used.
Easement: This allows a landowner to make use of another piece of nearby land in a way that will benefit their own land, such as a private right of way.
Chain: When a number of property sales and purchases are reliant on each other, this is referred to as a chain. There can be anywhere from three different parties involved to many more.
EPC: An Energy Performance Certificate (EPC) is used to show the energy efficiency of a property and will also offer a suggestion of how much you will have to pay for energy bills. There are two graphs showing the energy efficiency of the property and its environmental impact. A is the best, G is the worst – by law, all rental properties must be a minimum of E.
Under Offer: A buyer’s bid has been accepted by the seller but no contracts have been exchanged.
Gazumping: This occurs when a higher bid is accepted by the seller, even though they have already accepted a lower bid from another seller.
Gazundering: A lower offer submitted at the last minute by a buyer. This leaves the seller in a position of either having to accept or risk losing the sale.
Exchange of Contracts: Contracts are exchanged between buyer and seller when they are both willing to make the transaction legally binding.
Conveyancer: These are solicitors who specialise in managing the legalities of buying and selling a property. You will have to hire a conveyancer if you are taking out a mortgage for the property.
Title: This is the ownership of property or land recognised by the law.
Deeds: Documentation detailing the owner of the property or land, along with any specific conditions attached to the sale. The mortgage lender will hold these until the property is fully paid off, before being passed on to the owner or solicitor.
Land Registry: A government database that contains details of the owners of land and property. There are separate registries for each country in the UK.
New Build: In the vast majority of cases this means a newly built property that has not previously been owned or lived in. Some banks and lenders do have their own definition of the term, such as whether the property has been lived in but not purchased, refurbished or converted, or built within a certain time period.
Completion Date: When legal ownership of the property is passed from seller to buyer. The keys to the property are also typically handed over to the buyer at this point.
Snagging: If a new build property needs to have small repairs or maintenance carried out by the developer, this is referred to as snagging. A snagging survey will usually be conducted by the developer before the buyer moves in to spot any issues that may need addressing.
Stamp Duty: Property or land buyers must pay a lump sum of tax when the price exceeds a certain threshold. This is currently £125,000 for residential properties, although the full purchase price will determine how much stamp duty is paid.
NAEA Property Mark: The UK’s largest professional body for estate agents is called the NAEA Propertymark.
Property Ombudsman: A free and independent service that can be used to handle disputes between buyers, sellers and letting agents.
Valuation: A financial figure suggested by a estate agent for how much the property should be sold for on the property market.
Fixtures & Fittings: Fixtures and fittings can be anything from the carpets and curtains, to kitchen units and light fittings and even furniture. A full list of what is included in the sale will be supplied by the seller. Other items may also be available for sale separately.
Local Authority Search: When the buyer’s conveyancer contacts the local authority to find out if there are any additional matters relating to the property that may affect its sale.
Contract: The legal document laying out the legal terms of sale and purchase between seller and buyer. A draft contract is drawn up and reviewed by both legal representatives of both parties, where agreed amendments can be made before a final contract is finalised and signed.