Whether you’re a buying a house for the first time or you’re a veteran within the property market, there is no doubt that some of the industry language and jargon can be confusing!
Below, you’ll find a simple jargon buster to help explain what each term means.
This is the document the vendor signs when accepting a lender’s mortgage offer.
Annual Percentage Rate is the total cost of a loan, including any interest, arrangement fees and other costs, displayed as a percentage.&
Fees that are changed by the mortgage lender/broker to arrange the loan.
Transferring the right/interest in a property from one individual to another.
This is the rate of interest that the Bank of England charges when lending to other banks. Banks use this as a figure to benchmark from for the interest rates they charge their customers.
A short-term loan that allows an individual to buy a property before selling their existing property.
An inspection into the physical and structural condition of a property. The report will cover all accessible parts of the property, the surveyor will detail any defects or issues found.
Also referred to as equity, Capital represents the amount of money that you have put into a property.
A chain is formed when property sales become dependent on a vendor being able to sell their own property.
This term applies to Scotland only and is the date and time by which the buyer’s solicitor must submit their best offer in writing to the solicitor the seller has appointed.
The point where the sale of the property has been concluded.
Completion statement: Your solicitor will provide you with this document so you can keep a record of all of the financial transactions and costs.
A legal document that details the agreed terms between the seller and the buyer.
The process of legally transferring the ownership of the property from the buyer to the seller.
Date of entry
This applies to Scotland only and refers to the date on which the buyer becomes the legal owner and can move into the property.
A legal document that proves ownership of the property.
The amount paid by the buyer when contracts are exchanged, this usually equates to 10% of the purchase price.
Questions raised by the conveyancer, often regarding surveys or property information forms.
An Energy Performance Certificate is used to rate the energy efficiency of a property. This is done by looking at the amount of energy the property uses along with the carbon dioxide it emits.
Your equity refers to how much of the property you own, this is the difference between the value of the property and how much of the mortgage is still owed.
Exchange of contracts
When the buyer and seller have agreed the contracts for the sale of the property, these are signed at a certain time and date, and the conveyancers action the change. At this stage, terms cannot be changed and the sale is legally binding.
This is where the sale is agreed with a buyer, and the seller then goes on to accept a higher offer from a competing buyer.
This is where the buyer reduces their offer at the point of exchanging contracts.
An easy to read report that tells the buyer about the physical condition of the property. This report also lists any defects or faults and their seriousness.
Home Report: This applies to Scotland only and contains information on the property and its condition. This also contains a questionnaire prepared by the seller and the energy report.
Land Registry fee
This is the fee charged by Land Registry to record the legal change in ownership of a property.
Local authority search
The buyer’s conveyancer makes an enquiry to the local authority to find out if there is anything that should affect the property that is being purchased.
The National Association of Estate Agents is the UK’s leading estate agency industry body.
This occurs where the sale value of a property is far less than the outstanding amount left on the mortgage.
Note of interest
Applies to Scotland only and is when a buyer registers their interest in a property so they are alerted of any offers made. It does not mean that they have to put in an offer themselves.
A lawyer will conduct searches to ensure there is nothing that will affect the current or future value of the property.
Also seen as SDLT or Stamp Duty Land Tax, Stamp Duty is the tax paid by the purchaser to the government. The rates of this vary and now come as banded.
Subject to contract is where an offer has been submitted, but contracts are yet to be exchanged.
Conditions outlined in the title deeds including any rights and obligations. This applies to Scotland only.
A legal document detailing the local ownership of a property.
The final legal document that transfers the property from the seller to the buyer.
When the seller accepts an offer and the legal processes begin, the property becomes ‘under offer’.
Often referred to as a market appraisal, this is used by estate agents to cover the process of them valuing a property.
Commonly known as the seller, the vendor is the person selling the property.
If you have any further questions, or just need some advice, give us a call.