Jargon Buster at Hackney & Leigh

Sales Jargon Buster

A

Acre – is a meaure of land and contains 4,840 square yards.

Appraisal/Valuation – an estate agents inspection of the property to give an assessment of its value in the current market.

Applicant – the person or party looking to buy a property.

Appreciation – the increase in value of a property due to changes in the market.

Asset – any form of property owned by a person which can be used to determine wealth.

Auction – is the process of buying and selling a property or piece of land by a bidding process. The property or land will be sold to the highest bidder provided the reserve price is surpassed and at the fall of the ‘hammer’ a legally binding contract for the sale between the seller and the buyer is made. At the end the buyer signs the contract, usually provides a 10% deposit and a completion date is inserted in the contract, typically 28 days from the date of sale.

B

Bankers Draft – a cheque like payment which is guaranteed after a short fund clearance time.

Bridging Loan – temporary finance ‘bridging’ the period between completion on the purchase of a property and the sale of an existing property, funds from which are intended to finance /part finance the new purchase.

Building Preservation Order – to protect building of special architectural or historic interest from demolition or alterations that would affect their interest.

Building Survey – a survey usually carried out by a chartered surveyor with the purpose of creating a detailed report of the general structural condition of the property highlighting any defects.

Bungalow – a single storey property.

Buy-to-let Mortgage – a mortgage type targeting buyers who wish to purchase an investment property to let out.

C

Capital Appreciation  growth or gain in the value of a property asset over time. Added to income. This contributes to the overall or total return on a property or financial investment.

Cavity Wall – an external wall of a building that is made up of two leaves of masonry, bricks or blocks separated by a cavity.

Chain – this is when 3 or more buyers rely upon the sale of their property to complete the purchase of a new property. If one buyer in the chain has a sale fall through the chain may collapse affecting all connected down the line.

Commercial Property – refers to buildings or land intended to generate a profit, either from capital gain or rental income, by being used or occupied by businesses.

Commission – fee paid to your estate agent, usually following exchange of contracts.

Common Areas – areas of building or outside space which are used by more than one resident such as parking areas, hallways and gardens.

Completion – the date when the purchaser and vendor complete the sale of land or property. The purchaser pays the balance of the purchase price and the vendor gives possession to the purchaser.

Conservation Area – an area of a town or district in which development is restricted due to its special environment or appeal.

Contents Insurance – insurance against damage or theft of all moveable contents, including furniture, appliances and soft furnishings.

Contract – the contract is a legal document that sets out the terms of the conveyancing transaction and the parties involved, and is drafted by the seller’s solicitor.

Contract Race – where two parties have made an offer on the same property and 2 contracts are issued, the eventual buyer being the party which is able to exchange contacts first.

Conversion – the sub-division of residential properties into bedsits, self-contained flats or maisonettes.

Converted Flat – a part of a property which has been converted into a flat or apartment.

Conveyancer – usually a licensed conveyancer who deals with only the legal aspects of buying or selling properties.

Conveyancing – this is the legal process concerning the change of ownership of a property. [link to conveyancing]

Council Tax – a charge imposed upon property by Local Authorities to raise Revenues for the provision of local services. Each property is ‘banded’ by value to determine the amount paid.

Covenant – a condition Rules/regulations governing specifics that can /cannot be carried out in the properties title deeds or lease/leasehold agreement.

D

Deeds – legally binding statement documenting the ownership of a property and information relating to a property’s title.

Deposit – monies paid upon exchange of contracts – usually 10% of agreed purchase price.

Depreciation – a reduction in the value of a property due to changes in market conditions.

Detached – describes a property that stands alone and that is not connected to any other property.

Development – a new site of houses which have recently been built or a renovation project.

Disbursements – fees paid by solicitors on behalf of the buyers for fees such as local searches etc.

Dormer Bungalow – a property similar to a bungalow but with additional accommodation within the roof space.

Down Value – this describes the action when mortgage lenders restrict the amount you can borrow after the valuer reports that ‘in their opinion’ the property is not worth the agreed price.

E

Easement – a legal right given by a property owner to use another property owners land e.g. right of way.

Edwardian – property built between approximately 1901 and 1910.

Elizabethan – property built between approximately 1560 and 1603.

Encroachment – where a property owner violates the property rights of his neighbour by building something on the neighbour’s land or by allowing something to hang over onto the neighbour’s property. Encroachment can be a problem along property lines when a property owner is not aware of his property boundaries or intentionally chooses to violate his neighbour’s boundaries.

Energy Performance Certificate (EPCs) – compulsory document to accompany all properties being sold or let that indicates the energy rating of a property showing how energy efficient the building is, its carbon footprint and how it could potentially be improved.

Equity – the difference between what is owed by way of mortgage on a property and the value of a property.

Estate Agent – the only one to mention of course is Hackney & Leigh.

Exchange of Contracts – the contracts for sale are signed by the seller(s) and buyer(s) prior to completion of the sale. When signed with a non-refundable deposit paid by the buyer, the contracts are ‘exchanged’ between the respective solicitors with a completion date inserted into the contract when the balance of the purchase price is paid by the buyer.

Ex-local Authority – refers to a ‘Social Housing’ property which was formerly owned by the council.

F

Fixtures & Fittings – generally a fixture is understood to be any item that is fixed to the floor or walls, and a fitting to be any item that is free standing or hung by a nail or hook. These items are usually included in the sale of a property or a price is agreed to purchase them.

Formal Tender – the “formal tender” method of land sale invites offers by a firm closing date. Prospective buyers are supplied with a comprehensive legal pack with a specified exchange date on decision. Offers are returned in a sealed envelope, stating the contract to which they relate, but unmarked as to its sender. The offer envelopes are then opened together at the published date/time. As soon as the “best bid” is selected, the bankers draft is accepted and contracts are automatically exchanged. The successful bidder is then committed to the contract and will have to complete the sale on the appointed date.

Freehold – a freehold interest in property means ‘absolute’ ownership, although technically all land is held by the crown.

G

Garden flat – a ground floor flat leading directly into a garden.

Gazumping – this is when a seller is offered a higher bid for their property which they accept having already agreed to an offer where the exchange of contracts has not yet taken place.

Gazundering – this is the phrase used to describe when a buyer reduces their offer before the exchange of contracts.

Georgian – property built between approximately 1714 and 1830.

Granny Flat – self-contained accommodation within or built onto a house, suitable for an elderly parent.

Ground Rent – the annual fee charged by a freeholder to the leaseholder.

H

Hectare – a metric measurement of an area of land equivalent to 2.47 acres.

Help to Buy mortgage guarantee – helps people buy any home worth up to £600,000 with a deposit of only 5% of the purchase price. The Government will guarantee the next 15pc of the loan for a fee. Help to Buy mortgage guarantees will be open to both first-time buyers and home movers. However, you won’t be able to get a Help to Buy mortgage guarantee if you’re planning on renting out the property. The guarantee is provided to your lender – not to you. To qualify for a Help to Buy mortgage guarantee, the home you want to buy must be offered for sale at £600,000 or less, not be a shared ownership or shared equity purchase, the property can be newly built or already existing. You don’t have to be a first-time buyer and there’s no limit on your level of income. But you can’t use Help to Buy with any other publicly funded mortgage scheme.

Homebuyers Survey – this survey is designed for purchasers buying a home, giving the surveyors opinion on the condition and value of the property.

I

Informal Tender – where the sale of a property is generally marketed with a final date by which purchasers must have submitted a sealed bid. Offer envelopes are opened on the final day. Once an offer has been accepted the sale proceeds as a normal sale by private treaty.

Instruction – when a seller instructs an estate agent to market a property.

Investment – a property that is not occupied by the owner, usually purchased specifically to generate profit through rental income and/or capital gains.

J

Joint Agency – where two estate agents work together to market a property.

Joint Mortgage – a mortgage where there is more than one individual named responsible for the mortgage.

L

Land Registry – the land registry is a government agency responsible for the registration of title to land. Registration enables the sale of land and property to take place without the laborious and expensive exercise of checking through title deeds.

Land Search – a formal application for an inspection of the land registry register. A certificate is issued showing the current situation of the land in question.

Land Certificate – document issued by the land registry to the owner of a registered land as proof of ownership, where there are no ‘legal charges’. It includes a copy of the register and the plan showing the extent of the land.

Land Registration – the legal registration process of land with the land registry where a title number is either created or an existing one updated with the new proprietor(s).

Land Registry Fee – the fee payable for registering the ownership of land with the land registry.

Leasehold – ownership of land (normally for a fixed period – 99 years 999 years etc.) subject to an annual payment of a ground rent to the owner of the freehold.

Listed Building – a term given to a building which is either of historical interest or holds special architectural interest. Listed buildings cannot be altered without consent from a local government authority.

Local Authority Search – research carried out by a buyer’s solicitor to check with the local council regarding any existing or outstanding future developments or issues in or around the property affecting the surrounding area.

M

Maintenance/ Service Charge – charged by leaseholders to recover the costs they incur in providing services to a dwelling. e.g. maintenance of communal areas and buildings insurance.

Maisonette – is a flat or apartment in a block that is spread over more than one floor, with its own internal staircase.

Management Company – the company often formed and owned by property owners such as in a building divided into separate apartments, who will be responsible for the maintenance and insurance of the common parts of the building and its grounds.

Market Value – a price of a property which can be achieved by the current demand of the market.

Mews – are traditionally rows of former stables converted into residential properties.

Mezzanine – intermediate floor usually in a multi-story building, which does not extend to the full floor area of the whole building.

Money Laundering – money laundering is the process of changing large amounts of money obtained from crimes, such as drug trafficking, into origination from a legitimate source. It is a crime in many jurisdictions with varying definitions.

Mortgage – a loan to finance the purchase of a property, usually with specified payment periods and interest rates. The borrower (mortgagor) gives the lender (mortgagee) a charge over the property as collateral for the loan.

Mortgage Offer – a formal offer of mortgage issued by a building society, bank or other lender once the usual formalities (such as references and valuation) have been carried out.

Mortgagee – the person or institution to whom the property is mortgaged.

Mortgagor – the person who takes out the mortgage.

Multi-agency – the selection of two or more estate agents to act on the seller’s behalf, usually incurring a higher fee than if the sale is completed by a sole agency.

N

National Park – a national park is a reserve of natural or semi-natural land, declared or owned by a government, set aside for human recreation and enjoyment, animal and environmental protection and restricted from most development. The Lake District National Park was created in 1951.

Negative equity – a term used to describe when the value of a property has fallen below the level of money borrowed on it.

NHBC Scheme (National House Building Council) – a governing body for new homes who will issue a 10 year structural guarantee. Their inspectors will ensure that your new home is built properly and is safe.

O

Offer – the amount of money that a potential purchaser offers to pay for a property.

P

Peppercorn Rent – this is a very low, more or less negligible rent. The term is usually used with a flat where a long lease has been sold to an owner occupier. The peppercorn rent is payable to the freeholder of the whole building.

Pied à terre – a second home for either temporary or holiday occupation.

Planning Permission – approval by the local planning authority for the building, change of use or alterations such as an extension to the property.

Pre-contract Enquiries – these are enquiries made by the purchaser’s solicitor to the vendor’s solicitor, requiring information relating to the property being purchased prior to exchange of contracts.

Private Treaty – a phrase used to describe the most common method of sale of property when an asking price is advertised and offers are considered by the vendor.

Property Management – the management of a property by an agency on behalf of an owner or group of owners.

Public Right of Way – a way where the public has a right to walk, and in some cases ride horses, bicycles, motorcycles or drive motor vehicles, which will be designated either as a footpath, a bridleway, a road used as a public path (RUPP) or a byway.

Purchaser – someone who is buying a property.

R

Redress Scheme – independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.

Redemption – a term used to explain when a mortgage is fully repaid.

Repossession – when a lender takes possession of a property after non-payment of a mortgage.

Regency – property built between approximately 1800 and 1837.

Rent Charge – a small charge reserved to a previous owner of land that is paid to him or his successors annually out of freehold land. It is not a rent.

Repayment Mortgage – a mortgage which involves the repayment of both capital and interest in monthly installments within a specified term of years.

Reserve Price – properties for sale by auction are normally offered subject to a ‘reserve’ price, below which it will not be sold, in which case the property is withdrawn.

Reinstatement Value – a surveyor’s valuation report or survey will show the reinstatement value of the property. This figure is not the value of the property, but it is the cost of totally rebuilding the property. Any insurance you get for the property must cover a rebuilding cost at least equal to the reinstatement value of the property.

S

Sale Agreed – a verbal agreement from the seller.

Searches – local authority search, water authority search, environment search and the land registry search.  These are basically checks through the records of public authorities for information pertaining to each search.

Semi-Detached – a property that is joined to one other house.

Share of Freehold – where a freehold is owned by a limited company and the shareholders of the company share the freehold.

Sole Agent – describes when a seller chooses only one estate agent to sell their property.

Sole Selling Rights – the estate agent is the only agent with the right to sell your home during the term of the contract. The estate agent is entitled to payment, however the purchaser is found.

Solicitor – a legal representative who handles all legal documentation in the purchase and/ or sale of a property.

Stamp Duty – ‘Stamp Duty Land Tax’ a tax paid by purchasers, the amount payable depends on the value of the property and the status of the buyer.

Studio Flat – a flat which is made up of one main room with a separate bathroom.

Subject to Contract – when an offer is made to purchase a property ‘subject to contract’, it means that all the dealings are subject to the actual exchange of the contract itself. Nothing is binding on either the vendor or purchaser until the contracts are exchanged.

Survey – inspection of property carried out on behalf of purchaser by a qualified person to establish its physical condition.

Surveyor – a professional who estimates the value of the property or land.

T

Telegraphic Transfer – electronic transfer of money for the purchase of a property from a lender, a fee is often charged by the solicitor.

Tender – in the process known as ‘For Sale By Tender’. A guide price is provided and written offers will be invited with a closing date for such offers published. All offers are normally opened at the same time, usually with the vendor’s solicitor present. Generally the vendor is not committed to accepting the highest offer or any of the offers.

Tenure – a collective term relating to the nature of the vendor’s title to a property – i.e. freehold, leasehold or commonhold.

Terrace House – a house in a row of (usually) identical properties connected to each other by shared (or ‘party’) walls.

The Property Ombudsman (TPO) – a free scheme for estate agents and letting agents to join which ensure that they provide a high level of service to sellers, buyers, landlords and tenants.

Title Deeds – documentation of the legal ownership of a property.

Title Insurance – a type of insurance policy that a buyer can take out on a piece of land to ensure the sale is completed when there is a potential problem with the documentation regarding the legal ownership of the land.

Title Search – an investigation, carried out by a conveyancer or solicitor, into the history of ownership of a property. The search will check for liens, unpaid claims, restrictions or any other problems that may affect ownership.

Transfer Deeds – a legal document that transfers the ownership from seller to the buyer.

Transfer – the legal transfer of ownership on completion of the sale of registered land or property.

Tree Preservation Order (TPO) – direction made by a local planning authority that makes it an offence to cut, top, lop, uproot or wilfully damage or destroy a tree without that authority’s permission.

Tudor – property built between approximately 1485 and 1550.

U

Under Offer – when a seller or landlord of a property for sale, or to rent has accepted an offer but the exchange of contracts has not yet taken place.

Unregistered Land – land which is not registered with the land registry. Proof of ownership is by production of the deeds and verification of title.

V

Vacant Possession – a well-used estate agency phrase, which means that the property being offered will be vacant upon completion of the sale. The property is therefore offered free from any such encumbrances as a sitting tenant or service tenancy.

Valuation/ Appraisal – an estate agents inspection of the property to give an assessment of its value in the current market.

Value – the market value of a property without influencing factors such as price reductions for quick sale.

Vendor – someone who is selling a property.

Verbal Offer – offer from the prospective purchase, not legally binding on either party.

Victorian – property built between approximately 1837 and 1901.

W

Wayleave Agreement – a written agreement entered into with an owner to give a service provider (e.g. Electricity or Telephone company) a right for their cables to pass under or over their property.

Y

Yard – a small enclosed garden, often finished with stone slabs, paving or concrete.

Yield – a return on an investment, such as by way of an annual rent.

Z

Zone A – a method of valuing retail premises on the basis that the front of a shop is of greater value than the rear.