Property Jargon Buster
Reading time: 8 minutes | Posted: 22nd Mar 2021
Buying or selling a home can be a complicated process, often made more confusing by a long list of estate agent jargon you’ll hear throughout. Whether it’s abbreviations, complex terms or simply made up words, it’s not always easy to know what your estate agent is talking about. With that in mind, here are some of the key words and phrases you may hear being used and what they actually mean.
This is where the estate agent visits a property to determine its current value based on their assessment of the local market. This is sometimes also called a valuation (not to be confused with a Valuation Survey, as defined further down).
This is when someone buys a property for the specific purpose of letting it out as opposed to living in it themselves.
The chain is referred to a lot during most property sales, and can often be the cause of any problems that arise. The chain is the series of purchases that links buyers and sellers together, with each sale being dependent on another sale going through.
If one person in the chain pulls out of a sale or runs into problems, then this can slow down the process or even break things down completely. For instance, if you are unable to sell your home, you may not be able to purchase the home you have made an offer on. In turn, this may prevent the seller from buying their new property.
If a property is advertised as chain free (or ‘no onward chain’), this means that it is being sold by a vendor who does not need to buy another property. As the vendor is not relying on another sale to go through, this has the benefit of cutting out part of the selling process, meaning things can often move along quicker. In the UK, only around 10% of property sales are chain free.
This is when the property sale is complete and the ownership passes from the seller to the buyer. Completion dates are often set for 2 weeks after the exchange of contracts, but this is just a guideline.
Essentially a bill, this a document from the solicitor that shows all of the costs you have paid so far and will need to pay in order to complete a property sale. All of the payments must have been made and cleared by the bank in order for this to happen.
This is the name given to the legal transfer of property from one owner to another. This is performed by a conveyancer - a solicitor who specialises in dealing with this process. If you are buying a home with a mortgage, then the services of a conveyancer are a legal requirement.
Also called ‘title deeds’, this is the name for the legal documentation that shows who owns the property. This document also includes details about any obligations or responsibilities for the property, such as what you can and cannot alter and any access or rights of way. The deeds are usually held by the mortgage lender until the property is paid off. After that, they can be held by either yourself or a solicitor.
Usually referred to in its abbreviated form, it is the law for every property being sold to have an Energy Performance Certificate. The certificate rates the property’s energy efficiency on a scale of A to G and can give an indication of energy bill costs.
This refers to the exchange of contracts between the buyer and the seller’s solicitors. It is the point where the sale becomes legally binding and neither party can pull out of the agreement without incurring a financial penalty.
A freehold property is one that is owned outright, including the land that it’s built on. This means that if you purchase a freehold property you will be responsible for maintaining both the property and the land. However, it also means that you don’t need to worry about a lease running out, deal with the freeholder or pay additional fees like ground rent or service charges.
This is where, after an offer has been made and accepted, another buyer makes a higher offer and the seller accepts. While there is technically nothing wrong with gazumping, it can be heartbreaking for buyers who think they are well on their way to buying their next home. However, this tactic is less common than it used to be and some estate agents have policies in place to avoid it.
This is where the buyer decides to lower their offer, usually at the last minute. This tactic puts the seller in the tricky position of accepting a lower price for their home or having to find a new buyer. As with gazumping, while it may seem unfair, there is nothing legally preventing gazundering until contracts have been exchanged.
With leasehold properties, you own the property but not the land it is built on (this is owned by the freeholder). For example, this is usually the case when purchasing a flat - you become the owner of the flat itself, but you do not own the building the flat is in nor the land.
This is the document that confirms that a sale has been agreed between the vendor and the buyer. Every property sale has a Memorandum Of Sale, but it is not a legally binding document. It simply sets out the details of the sale including the agreed price and declares the intention of both the buyer and seller to complete the transaction.
Once the Memorandum of Sale has been issued, this gets the ball rolling for the sale to go through (including changing the status of the property to ‘Under Offer’ or ‘Sold STC’).
This is just another word for a brand new property. Usually, no one has ever purchased or lived in it, and it was likely built fairly recently (it must have been within the last 2 years). The term new build can also be used when a property has been substantially renovated as opposed to built from the ground up.
Mortgage lender criteria tends to be stricter for new builds and you may also find that you are charged a higher interest rate. This is because the mortgages are deemed risker as the value of a new build may decrease in the first few years.
STC stands for ‘subject to contracts’ (you may also see the whole phrase shortened to ‘SSTC’). While ‘sold STC’ and ‘under offer’ are both commonly used, they essentially mean the same thing.
Officially called Stamp Duty Land Tax, this is a tax that is paid by the buyer to the government in England and Northern Ireland. There is a threshold for stamp duty, where if you purchase a property under the threshold there is no stamp duty to pay. This threshold changes, so to find the current value you can check the Gov website here.
The amount of stamp duty owed also depends on the type of property and your personal circumstances (if you are a first-time buyer or buying an additional property).
A survey is another name for a report prepared by a building surveyor about the condition of your property. There are three different kinds of survey that all have slightly different purposes:
You may like to get a survey done on a property you have offered on, as it can help you avoid any expensive surprises later down the line. The kind of survey you choose will depend on the type of property you are wanting to purchase, your budget and how in depth you would like it to be.
When a property is under offer, it means that the seller has accepted an offer on their home but the sale has not yet gone through. It’s during this period of time that surveys are done, mortgages are finalised and all the remaining paperwork is carried out.
If a house is under offer, it does not necessarily mean that contracts will be exchanged, as there is plenty that can still go wrong (whether that’s mortgages not going through, structural issues or someone simply changing their mind). At this stage, other buyers can still make an offer on the property that the estate agent is legally obliged to pass on.
This is just another word for the seller, and the two words can be used interchangeably. Though the vendor may not necessarily be the person currently living in the property, this is usually the case.Share this: