It is easy to get daunted by the terminology when buying or selling a property. Finding your way around this maze of language is crucial for first-time buyers and those who have moved multiple times. Understanding the words and phrases associated with house sales enables those involved to make informed decisions and allows a much smoother transaction to take place.
This guide explains the finer details of the property sector jargon, clarifying the meaning behind terms commonly encountered during house sales.
Freehold vs Leasehold
Freehold is when you own the building itself and the land on which it is situated. You have control over both the property and the land. Leasehold means you own the property you are purchasing for a fixed period but not the land. The land is usually owned by a separate entity, and you may have to pay rent.
Conveyancing
The legal process of a property transaction is called conveyancing. It involves numerous steps, including searches, reviewing contracts, exchanging contracts and handling transferred monies.
Completion
The completion date is when the property officially changes hands. The buyer pays the balance of the purchase price, and the keys are handed over.
Chain
A chain is formed when multiple buyers and sellers are linked via their transactions. The chain is dependent on the success of the previous and subsequent purchases. Chain-free transactions are generally more straightforward.
Chain Break
When a property sale does not go ahead, it breaks the chain. This can happen for various reasons, such as money or a change of heart.
Gazumping and Gazundering
Gazumping occurs when a seller accepts a higher offer from a different buyer after agreeing on a lower one previously.
Gazundering is when a buyer reduces the amount of their offer just before the exchange of contracts.
Exchange of Contracts
This is where the buyer and seller exchange signed contracts, legally committing to the transaction. At this stage, the buyer usually pays a deposit, which is usually 10% of the purchase price.
Survey
A survey is an inspection of the property’s condition. Surveys range from a simple valuation survey, to a more detailed survey of the structure of the property.
EPC (Energy Performance Certificate)
A document providing information about the energy efficiency of a property. It includes recommendations if the energy performance needs to be improved.
Stamp Duty
A tax paid by the buyer where properties are above a certain value. The rates vary depending on the price and whether the buyer is a first-time buyer.
Retention
The buyer’s solicitor holds a sum of money until the seller addresses certain matters, such as repairs to the property.
Title Deeds
The Land Registry documents proving ownership of a property. These are now often held electronically.
Redemption Statement
A document from the seller’s mortgage provider showing the amount outstanding on the mortgage, to be paid the day the property is sold.
Covenant
A legal obligation or restriction pertaining to the use of the property. You would usually find these in the deeds.
Land Registry
A government body who is responsible for keeping a public register of properties in England and Wales, providing ownership details and any details of any charges on the property.
