Acceptance The document that you will need to sign and return to a lender if you wish to accept the lender's mortgage offer.
Agricultural This is a planning condition which permits the erection of a residential dwelling providing it is occupied by a person employed or associated with working on the land. Properties subjected to such a covenant are effectively "blighted" by this stipulation and values are relatively low because they cannot be sold to anyone who fails to meet the conditions imposed, unless the planning authorities agree to lift the covenant.
AIP Agreement in Principle of the amount you can afford to mortgage up to through your selected provider or IFA.
Applicant The term by which a potential purchaser is often referred to by estate agents.
Appraisal Carried out by a potential selling agent and, in their opinion, is the current marketing price of the property.
Asking price The price being asked by the vendor. Normally a little optimistic - a lot of properties sell for a bit less than the asking price.
BBO Buyer budget over... See BEO.
Beneficial Owner Person owning land and entitled to it for his own benefit. Not, for instance, a trust that holds the land for the benefit of another.
BEO Buyer enquiry over... A silly acronym used to confuse a first home buyer that indicates the point above which offers will be looked at by the vendor. This doesn't mean you can't offer below that, just that nothing will probably happen if you do.
Bridging Finance A purchaser under certain circumstances may wish to complete the purchase of a property whilst still offering his own for sale. Lenders will advise as to whether the necessary temporary finance can be made available. A short-term loan taken while you free-up money from the sale of your other house.
Building Regulations The Governments requirements for home improvement and new homes ensuring minimum prescribed standards.
Buildings survey A comprehensive survey providing a detailed report on a properties construction and condition.
Capital gains tax CGT is a tax on capital 'gains'. If when you sell or give away an asset it has increased in value, you may be taxable on the 'gain' (profit). This doesn't apply when you sell personal belongings worth £6,000 or less or, in most cases, your main home.
Capital Value The total value of your property including land and buildings, but not the chattels.
Caution Entries on the land register protecting the interests of a third party. Any application for first registration of title is notified to him whereupon he can take appropriate action to protect his interests.
Certificate of Title The ownership paper for your property. It contains a legal description of the land you own and information about the house.
Charge If a property owner uses his security in the property to service a loan, a charge is registered and certified. This entitles the lender to be regarded as a secured creditor to be paid out of the proceeds of a sale in the event of a default on the loan.
Charge certificate A certificate issued to a lender by the Land Registry giving evidence of the lender's charge over the property.
Chattels The items that come with the house when sold, including curtains, carpets, appliances, light fittings and other stuff generally considered part of the house. These should be listed on the Sale and Purchase agreement.
Chief rent A payment made on freehold land to the original freeholder forever. Distinct from ground rent which has a limited period.
Closed Tender A tender where bids must be in before a defined date.
Collateral Property pledged as a guarantee for the repayment of a loan.
Commission or fee to the estate agent The sum of money paid to the agent, and invoiced to their clients on exchange of contracts.
Company Title Some flats come with a company title. The company effectively owns the flat, and you own both shares in the company and a right to live in the flat (called a licence to occupy).
Completion The finalising of the sale when all the monies are passed over and the purchaser has legal right to the property.
Completion Date The date set upon exchange of contracts when the purchaser’s solicitor has forwarded the completion monies to pay for their new home and when the purchaser can take ownership of their purchased property.
Conditional agreement The agreement that goes alongside a conditional offer. It includes all the conditions that must be met before everything becomes final, or unconditional.
Conditional offer When you make an offer, you can make it conditional on getting your finance approved, sighting the body corporate finances, getting a building inspection, or anything else you like. Be warned though - the more conditions you put into an offer, the less attractive the offer may seem to the vendor.
Contract Entered into by the vendor and purchaser of a property which only becomes binding on exchange of contracts, i.e. when both parties have signed the contract and the purchaser has handed over the agreed deposit (if any) to the solicitor.
Contracts The legal agreement between a Seller (Vendor) and a Purchaser (buyer) which describes the details of the property and the terms under which the proposed sale and purchase are agreed.
Contract race Involving two or more purchasers wanting to buy the same property. Usually instigated by the seller. The successful purchaser is the first purchaser to exchange contracts.
Conveyance The legal process involved in changing ownership of the property. This includes the registration of new ownership documents.
Conveyancing The legal process transferring ownership from vendor to purchaser.The term given to the branch of Solicitors dealing with the transfer of ownership of the property.
County court judgement (CCJ) Whenever someone fails to pay for something and is subsequently taken to court, the magistrate may issue a County Court Judgement against that individual to pay the outstanding debt. It will only be removed once the debt is cleared.
Covenant A restriction or condition affecting the property which must be observed or performed. If a covenant is recorded on the title for your property it means there is some legal restriction or agreement. It may, for example, include restrictions on what you can and cannot modify on your property.
Deeds Also known as Title Deeds, the documents giving evidence of ownership or rights to a property.
Delayed completion Completion can take place any time after exchange of contracts. However, if it is longer than 28 days it is referred to as delayed.
Deposit The initial payment you make on your home - the mortgage pays for the difference. You are usually required to have between 5% and 20% deposit for your property before the bank will give you a mortgage.
Depreciation If your property depreciates, it goes down in value.
Disbursements Additional bits and pieces charged by lawyers and other professionals that relate to the costs they incur. Include photocopying, phone calls, etc.
Discharge of Mortgage When you pay-off your mortgage it is discharged. From this point forward, the bank no longer owns your house, you do! Well done.
Domestic Energy Assessor (DEA) The assessor who prepares the Energy Performance Certificate (EPC).
Early possession When you are allowed to move into your new home before settlement. A good deal, depending on the rent the previous owner wants to charge you.
Easement A right over or under land granted to someone who is not the owner.A right held by someone to use land belonging to someone else for a specific purpose. Mains, drains and water pipes are usually covered by and easement. An easement permits someone else to use your property for some stated purpose. An example is when the neighbour needs to use your driveway to get to their place. You may have an easement on your neighbour's property for a similar reason.
Energy Performance Certificate With effect from the 1st August 2007, the sellers of residential property (with four or more bedrooms) in England & Wales will be required to provide prospective buyers with a copy of a valid Energy Performance Certificate (EPC). This document will usually form a key part of the Home Information Pack and gives details about the energy efficiency of the property and it’s CO2 impact, plus information about measures that could be taken to improve the energy efficiency of the property. EPCs can only be produced by suitably qualified Domestic Energy Assessors and copies are held in a secure central register.A report on the energy performance of a property using the familiar A - G scale where A is a 'zero carbon home'. The assessor produces a report using a Standard Assessment Procedure (SAP) which enables like for like comparisons to be made.
Engrossment The formal and final version of a document prepared by a solicitor in readiness for signing and sealing following agreement of the final draft between the parties.
Enquiries A collection of detailed questions raised by the purchasers solicitor relating to the proposed purchase property which need to be answered by the sellers solicitor before contracts can be signed.
Equity Equity is what is left if you sell your property and pay-off all the debt. The more equity you have in your property the better.
Equitable interest Legal rights in a property that do not include the right to sell its legal title.
Exchange of Contracts The moment when the sale or purchase of a property becomes legally binding, i.e. the seller has legally agreed to sell and the purchaser has legally agreed to buy upon the terms as stated in the contract.
Exchange of contracts This is the stage when the buyer and seller exchange signed, legally binding contracts of purchase and sale. Both then become committed to complete the transaction.
Execution Signing, sealing and delivering a deed in front of an independent witness.
FENSA certificate When having windows and doors replaced homeowners must ensure that they get a certificate of compliance. This may be obtained from FENSA or from Local Authority Building Control (post April 2002).
Fixtures & fittings Any items that are to be included in the sale, e.g. carpets, curtains, curtain rail, wall lights etc.Items considered part of the property because they are permanently attached. Examples include the stove, cupboards and shelves.
Flying freehold A flying freehold is formed when part of a freehold property overhangs a different freehold property or land.
Foreclosure This is what you risk if you don't make your mortgage repayments. The bank comes and takes your home away. How nice.
Freehold Absolute ownership of land and any property which stands on it. .This means you own your land and buildings with few restrictions on what you do with them. Freehold can also mean you don't owe any money on your property.
Gazumping A term used to denote a situation where the vendor has accepted an offer but subsequently accepts a higher offer from another purchaser.
Gazundering This is when a buyer offers a lower price than they originally offered just before contracts are exchanged - hoping the seller will accept it rather than lose the sale
General agency The opposite of exclusive agency - a property listed with multiple agents
Ground rent This applies only to Leasehold properties and is a sum paid annually to the Freeholder by the Leaseholder.
Ground Rent A payment made under the terms of a Leasehold Agreement.
Home Information Pack A document containing a collection information prescribed by The Government,Properties marketed for sale from 14 December 2007 in England and
Wales will need a Home Information Pack (HIP), which includes a home
energy rating.
The Pack includes an Energy Performance
Certificate, containing advice on how to cut carbon emissions and fuel
bills. Also included are documents such as a sale statement, searches
and evidence of title.
Currently, any property that was
already on the market on the relevant commencement date (i.e. 1 August
2007 for sales of homes with four or more bedrooms; 10 September 2007
for those with three or more bedrooms and 14 December for all
properties) does not need to have a HIP.
At this stage no such date has been set when all properties that are on the market will be required to have a HIP.
Homebuyers (HSV) A concise report detailing any significant problems that could make a difference to the value of the property.
IFA A Financial Advisor who advises on a wide range of financial products from differing lenders and insurance companies.
Improvement grant A grant made by the local authority towards the cost of repairing or improving property. Further information with regard to grants is available from your local council.
Indemnity Policy Indemnity is the legal philosophy upon which the concept of most insurance policies rests. "indemnity" is protection from loss and damage claims filed by another person
Instalments Typically means the frequency of payments to your bank for the mortgage. Each payment will usually be partly for the principal and the rest is for the interest component - depending on the type of mortgage you choose.
Instruction This term is used when the estate agent is formally instructed by a property owner to market the property, usually by private treaty, in order to find a purchaser. The resulting contractual agreement confirms the terms under which the instruction is offered by the vendor and accepted by the estate agent.
Interest rates These typically come in fixed or floating varieties. Fixed interest provides you with a defined interest rate for a certain period (e.g. 6% for 2 years on a given amount). Floating interest rates move up and down as your lender chooses - if interest rates go up elsewhere, yours will to.
Joint Tenancy Most couples own their home in this way. It means you both own the property (and the mortgage) and that if one of you dies, the other party (or parties) get full ownership of the property. It supersedes whatever your Will says.
Joint agency A situation where two agents are acting, the commission being apportioned as agreed by the seller and joint agents.
Joint sole agency A situation where two agents are acting as sole agents, the commission being divided equally, no matter who sells the property. See also 'MULTIPLE AGENCY'
Joint tenants Two or more people holding property as co-owners. When one dies, his share of the property automatically passes to the survivor(s). See also 'TENANTS IN COMMON'
Land certificate A certificate issued by the Land Registry as proof of ownership.
Land registry A Government department where details of properties with a registered title are recorded along with any charges e.g. mortgages.
Land Value The value of the land without the buildings.
Lease Ownership of property by way of a leasehold interest for a fixed term, usually with an annual ground rent.
Leasehold Ownership of land (normally for a fixed period) Means someone else owns the land under your property and that you rent it from them. The risk of leasehold is that your rent for the land could go up. You can get a Certificate of Title for your leasehold interest and will need to notify the landowner when you sell your property.
Lessor He who grants a lease - the landlord.
Lien The legal right of one person to hold the property of another as security for a debt. ‘A lien is a right of a person to retain possession of the owner’s property until the owner pays what he owes to the person in possession’.
Licence to occupy Common in retirement villages, a licence to occupy lets you live in the house or flat, but you don't own it. See Company Title.
Local Authority Search A search of local authority records to confirm the status of a property. This would also check for changes in the local area and provide detail of any planning permission granted.
Maintenance Charge A charge made, usually annually, by the landlord, to cover the costs of maintaining the property as set out in the lease.
Management Company A company set up to manage the servicing of property, usually leasehold, and any repairs or maintenance required.
Market Appraisal Carried out by a potential selling agent and, in their opinion, is the current marketing price of the property.
Market Value The likely sale price of a property. The market value is the most you can reasonably sell your property for, given the market conditions.
Mortgage Loan for which property is the security (usually for house purchase).The legal document that gives your lender the 'security' over your property. If you are unable to make the repayments the mortgage is the document you need to be most afraid of. See Foreclosure.
Mortgage deed The document enshrining the conditions of a loan secured on a property.
Mortgagee The lender or any person or organisation who lends money for the purpose of a mortgage, for example a building society, bank, or private individual.
Mortgage indemnity guarantee An amount payable when a loan to property value exceeds the lender's maximum allowable. Amount payable and repayment terms of a M.I.G. vary according to each lender's mortgage arrangements.
Mortgage offer The letter from the lender offering you the loan and setting out the terms and conditions upon which it is offered.
Mortgagor The borrower (whose property is secured for the loan).
Mortgage Protection Insurance Insurance to help you make mortgage repayments in the event that you are unable to after losing your job or if you die.
Mortgage Payment Protection Insurance (MPPI) covers your mortgage payments in the event of your being unable to work due to an accident, sickness or unemployment, so it is also known as ASU.
Mortgage Valuation A lender will send a specialist valuer to work out how much the property's worth so they can decide whether to give you a mortgage or not. The valuer is only concerned with problems that might affect the security of the loan, not whether you have any structural problems that need fixing.
Mortgagor This means the borrower.
Multiple agency A situation where two or more agents are acting for the vendor. The agent who introduces a successful purchaser is the only one paid. See also 'JOINT SOLE AGENCY'
New instruction This is a new property that has been added to the agent's list.
Offer (England & Wales) A presentation of intent to purchase a property, at a price.
Ombudsman for Estate Agents The Ombudsman for Estate Agents (www.oea.co.uk) is a free, fair, independent service for buyers and sellers of residential property in the UK. It listens to their complaints and offers financial compensation if necessary.
Part-possession The term used, when a property is being sold, where a tenant has legal right of occupation.
Peppercorn rent A term used to denote a ground rent of a trivial amount.
Possession This is when you have the right to move in to your new home. Also known as 'taking possession'.
Power of Attorney A legal document that lets someone act (in a legal sense) on your behalf if you are unable to. Grant this carefully.
Pre-approval Offered by most banks, you can get pre-approved up to a certain amount to buy a property. Factors taken into consideration include your income, your expenses, and any other debt you have.
Preliminary enquiries A set of questions raised by the purchaser's solicitor and sent to the vendor via his solicitor, prior to exchange of contracts. They ask for clarification of specific points about the property which is being sold and the present vendor's ownership of it.
Price change This is a property that has had its price changed.
Private Treaty (For sale by) The sale of property by private treaty is the method employed by most estate agents, preparing descriptive details of the property and quoting a definitive asking price. Details are circulated: potential buyers may view the property and either agree to buy at the asking price or submit an offer to purchase. Agreement to buy at this stage (for England and Wales) is subject to formal contracts being prepared between the vendor and the purchaser and those contracts being signed and exchanged between the two parties.
Probate The official process of proving a will is valid. In many cases part of the estate will involve a property, which might need to be valued for Inheritance Tax purposes. A probate valuation is generally a negotiated value with the district valuer representing the Inland Revenue. A sale cannot proceed to exchange of contracts until probate has been granted.
Principal The amount of money you owe your lender before the interest component is added.
Private sale Selling your house without the assistance of an estate agent. Typically saves you 1.5% of the value of your house in fees, if you can get the same price as the agent would have.
Project Information Memorandum (PIM) A report you can get from your local authority or council that will help you if you are undertaking a building project. It will set out everything they know about the land - such as it's propensity to flood.
Rateable Value The valuation that is done by your local authority to set your rates. Typically, the more your property is worth, the more rates you pay.
Registered land Land (including buildings on it) the title to which is registered at the Land Registry and legal ownership of which is guaranteed.
Registered If property is registered, the title to the property is registered at the Land Registry and is guaranteed by the state. The owner has a 'Land Certificate' instead of the usual title deeds. Buying registered property is more straightforward than buying unregistered property.
Retention A sum of money withheld by a lender pending the completion of certain specified works.An amount held back from the initial loan by the Lender until certain repairs or improvements have been completed or in some cases to cover possible road charges on a new estate.
Right of way An individual's legal right to use any particular part of a property, in order to gain access to any particular part of his own property.
Sale and Purchase Agreement The legal contract between the vendor and the purchaser.
Security See Mortgage.
Searches A term used to denote the physical and written procedure for determining any adverse effects in / on a particular property, whether already in effect or planned to take place.
Settlement day The day when you pay for the property you have purchased. Also typically the date you get your mortgage to allow you to do this. You get the keys and the vendor gets their dosh - minus the estate agent's fee, if applicable.
Share of Freehold Where the Leaseholders jointly own the freehold themselves.
Shared Ownership Housing associations offer shared ownership as a part-buy part-rent way to own a property. You pay a mixture of mortgage and subsidised rent, making the homes affordable for those on or below average incomes. If you start to earn more, you can increase your shares in your home, and have the option of owning the property outright.
Sitting tenant To occupy the property as tenant, but have legal rights without a lease. Any sale would be subject to any rights of a tenant who has occupation.
Sole agency When you home is being sold by a single estate agency. Where only one agent has the authority to sell the property. This does not affect the owner's right to sell privately.
Sold subject to contract Sold 'Subject to Contract' (STC) means that the homeowner has accepted an offer from a buyer but the paperwork is not yet complete.
Sole-selling rights Where one agent has complete control of the sale, and is entitled to his fee however the property is sold.
SPA A Special Protection Area (SPA) is a site that is designated by the European Habitats Directive as being of European importance for its populations of wild birds.
Stamp duty This is the tax normally paid by the purchaser of a property to the Government. Currently based on the following rates: • exempt: if the purchase price of the property is under £120 000* • 1% of the purchase price on any sales exceeding £120 000 and under £250 000. • 3% of the purchase price on any sales exceeding £250 000 and under £500 000. • 4% if the purchase price on any sales exceeding £500 000. *This does not apply if the purchase is part of a larger transaction or series of transactions. Disadvantaged Areas Stamp Duty Exemption may apply for properties within the Government's designated wards. For more information please go to www.inlandrevenue.gov.uk/so These figures do change subject to government rulings.
Survey Available in three types: Valuation, Home Buyers and Structural. Inspection of the property by an independent surveyor.
Take possession See Possession.
Tender The process of buyers making offers, typically in writing, for the seller to consider. In closed tenders, bids need to be in by a certain date. Open tender means there is no particular deadline - but that the property could sell anytime. A tender bid can include conditions from the bidder.
Telegraphic Transfer The means of transferring funds i.e. completion monies, electronically upon completion to sellers solicitor.
Tenancy at will or licence After exchange of contracts a purchaser may seek to take possession of a property before financial, legal completion. This could be to carry out repairs and decorations or to take up residence early. This can often be organised and a licence arranged between both parties' solicitors. The purchaser paying an appropriate rate of interest on the balance of the outstanding monies (i.e. purchase price less deposit paid) instead of rental.
Tenant Person who is in possession of a property usually by way of lease.
Tenants in common Two or more people holding property as co-owners. When one dies, his share of the property automatically passes to his estate. See also 'JOINT TENANTS'
Tender - For sale by This is the situation where the asking price is not actually stated, but offers (in writing) are invited. Details of the property are prepared, circulated and advertised. The closing date for the tender is noted. In most cases the vendor will reserve the right to refuse the highest offer, thereby not being committed to sell. Offers tendered are usually opened in the presence of the vendor's solicitors, at a prescribed date and time. An acceptance of an offer by the vendor constitutes an immediate contract, and in most cases, the party tendering will have made their financial arrangements and have had a structural survey carried out in advance.
Tenure Whether a property is freehold or leasehold.
Title The rights and liabilities that attach to the property. The legal ownership of a property or the rights which a person/people have to a property.
Title - Absolute The highest form of tenure available.
Title - Abstract of A summary of title documentation used in the conveyancing of unregistered properties to prove that the vendor has the right to sell.
Title deeds Legal documents describing the rights and liabilities that attach to the property and prove ownership of property.
Title report on Solicitors' certificate confirming that the title to the property is acceptable. A Lender must have one before an advance cheque for the mortgage monies can be issued.
Transfer Document The document which transfers over legal ownership of a property.
Unadopted road A road which has not been accepted by a Local Authority possibly as a result of it not meeting the standards laid down (e.g. road surfaces, drainage, etc.).This indicates the possibility of a road charge liability if and when the road is adopted.
Under offer A property is under offer when a homebuyer has made a formal offer to purchase the property but the homeowner has not confirmed whether to accept. If the offer is rejected then the property remains on the market until the next formal offer is made at which point the homeowner must again decide whether to accept the offer or reject it. If the offer is accepted then it becomes 'Sold Subject to Contract' (Sold STC).
Unconditional Means there are no conditions attached to the sale of the property. An offer will often be made with conditions and then go unconditional once the buyer has checked off their conditions.
Unregistered If property is unregistered, ownership is not guaranteed by the state. The title can only be proved by a copy of the title deeds, and your solicitor will check back the property's documentation over at least 15 years to certify it. With unregistered property, disputes over title are not uncommon.
Vacant Possession The previous occupants must vacate the property before you move in, including any tenants.
Valuation When carried out by a potential selling agent is in their opinion, the current marketing price of the property. For any other valuation purposes, alternative professional advice may be appropriate.
Value of improvements The difference between the Land Value and the Capital Value of the property. Essentially the value of the buildings.
Vendor The owner of the property to be sold.The owner who is selling the property.
Writ or summons Mode of commencing legal proceedings.
Will A legal document that sets out what to do with your assets when you die. Can save a lot of hassle for others when you die.
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