We know from working in the industry for over 5 years now that sometimes the words and terms agents, surveryors and solictors use may become confusing; so we have devised a list of common words which you may not know about.
Word |
Description |
| Arrears | If someone is in arrears it means they have fallen behind with mortgage payments. If this happens, the mortgage lender may take action to repossess the property. |
| Building Survey | This is sometimes called a full structural survey. It is a thorough inspection of a property carried out by a chartered surveyor. They write a report detailing any defects in the property you are looking to buy. Building surveys are often carried out when people are buying older homes with potentially costly structural problems, or properties that have been heavily altered or poorly maintained. |
| Chain | This is the sequence of buyers and sellers most people who sell their property are also buying at the same time. Therefore there can be a chain or a number of several and sellers, which depends on each other for the sale and purchase of their new properties. For example, if one buyer or seller drops out, the chain may collapse, whereby the paperwork for the properties within the chain is delayed or cancelled. |
| Chain Free | This is when the owner of the property does not need to sell the property in order to buy another; therefore it is offered as chain free. |
| Completion Date | This is when the owner of the property does not need to sell the property in order to buy another; therefore it is offered as chain free. |
| Completion Statement | A statement from the solicitor detailing all financial transactions, including all costs. |
| Conditions of Sale |
The terms by which the buyer and seller agree to sell/buy the property. The Law Society sets standard conditions, the lawyer sets special conditions. |
| Contract | The legally binding agreement specifying details of the house sale or house purchase. The contract legally commits both the buyer and the seller to the transaction. The house sellers conveyancing lawyer draws up two copies of the same contract and each party signs their own copy. When both parties are ready to legally commit, the two contracts are exchanged. |
| Conveyancer | The property lawyer who manages all of the matters arising from the sale of a house or the purchase of a house. Can be a solicitor or a licensed conveyancer. |
| Conveyance | The legally binding document that transfers the rights, burdens and the benefit of the land. |
| CLC | Council for Licensed Conveyancers: A regulatory body for conveyancing with whom all conveyancers should be registered. |
| Deeds | Legal title document which provides historical information about the property. |
| Deposit | The amount paid to exchange contracts which is only refundable in exceptional circumstances. Contracts provide for 10% of the purchase/sale price but can often be negotiated to a lower level. |
| Disbursements | Out-of-pocket expenses paid by the solicitor/licensed conveyancer on the buyers behalf, such as stamp duty, land registry charges and search fees. |
| Easement | A right given to the house owner over an adjoining property (e.g. right of way) |
| EPC | Energy performance certificate. |
| Equity | This is what you actually own the difference between the market value of your property and the amount of the loan you still owe to your lender. |
| Exchange of Contract | The point that both parties are committed to the transaction. |
| Fixtures and Fittings | A list of the items at the property, which are either included or excluded from the agreed price. |
| Flexible Mortgage | Mortgages that are flexible in terms of how you pay the loan back. |
| Freehold |
One of the two current tenures of land recognised by English law. This recognises the whole of the land not just a building. |
| FSA | The Financial Services Authority (FSA) is an independent body concerned with consumer protection in the financial market. |
| Land Registry Fees |
Fees paid by your conveyancing lawyer on the buyers behalf to register the ownership of property with the Land Registry. |
| Land Registry | A government office that stores records of land ownership and any charges, like a mortgage. |
| Leasehold |
The second current tenure of land recognised by English law. This is over a term of years and not unlimited. There will be a Landlord who will own the freehold. This usually relates to a flat or apartment. |
| Redemption Fee | Normally charged by your financial advisor, for acting on behalf of your bank or building society. |
| Searches | A method of checking matters that may affect the value of the property. The only obligatory one before exchange is a Local Authority Search which covers items such as road maintenance and planning applications. The search covers the property not the surrounding area. |
| Stamp Duty | A government tax payable by every home buyer when purchasing a property over 125,000. Duty is charged at 1% for homes priced between 125,001 and 250,000. The rate is 3% for homes between 250,001 and 500,000. For homes over 500,000, the rate is 4%. And for properties above 1,000,000 5%. If the property is being sold for less than 125,000, no stamp duty is payment is required. |
| Survey | A report produced by a building surveyor for the purpose of determining the value of the property and if it is structurally sounds. |
