It can sometimes be difficult to understand the jargon when buying or selling a property and this can lead to confusion and sometimes misunderstanding – something that you don’t want when you are buying or selling your property. Here at Chadwells we have created a jargon buster guide to ensure that everybody understands exactly what is being said throughout the whole process.
EPC: Energy Performance Certificate (EPC). This tells you the energy efficiency and carbon emissions of a property and will give an indication of the fuel bills. The property is given a rating from A to G with A being the most energy efficient.
Equity: This is the difference between the value of your home and the mortgage you still owe. It tells you how much of the property you actually own.
Exchange of contracts: Legally binding contracts are exchanged through the lawyers of the buyers and sellers.
Holding deposit: When contracts are exchanged, some sellers ask for a holding deposit. It is usually between £500 and £1000 or a percentage of the purchase price and paid to the seller’s solicitor. The deposit is made to show that you are serious about buying the property and is usually only refunded if the seller pulls out.
Land Registry: The government office which archives land ownership records and other documents relating to properties.
Land Registry fees: The fees which are paid to register the ownership of property with the Land Registry.
Leasehold: A leasehold property is when you can live in and occupy the land of a property for a fixed amount of time - the length of your lease. This can be a varying term but is usually 99 years, 125 years or 999 years.
Legal fee: The charges made by a solicitor or conveyancer for their work in the buying or selling of a property.
Licensed conveyancer: A specialist lawyer who is qualified and specially trained in all aspects of buying and selling a property.
Mortgage deposit: The deposit paid up front towards part of the of the property price to the mortgage company. It’s usually around 20% but can be more, or less - also known as a Down Payment, or Home Loan Deposit.
Mortgage deed: The deed which transfers the legal title to your property to your mortgage lender when a property is bought with a mortgage. It has no effect unless the mortgage isn’t repaid, but if this happens, the lender can repossess the property.
Property questionnaire: An honest review of the property being sold, provided by the sellers which includes alterations made to the property, it’s Council Tax band, any history of flooding, Local Authority notices served on it, parking arrangements, and arrangements covering the repair and maintenance for some properties such as flats.
Searches: A Local Authority search must be carried out before exchanging contracts. Searches are carried out by your lawyers and are put in place to ensure that there is nothing which could affect the value of your property.
Share of freehold: When the freehold of the property is owned by a limited company whose shareholders are the owners of the property, usually the owners of flats within that building.
Stamp Duty: Buyers of every home must pay a tax when it costs more than £125,000; beginning at 1% and growing to 7% for homes above £2 million.
Survey: A survey is carried out by a qualified building surveyor, who checks the property for structural issues. There are three types of survey that can be chosen from, depending on the amount of detail that the buyers are looking for. See also Valuation Survey.
Subject to contract: When a contract is not legally binding until all of the details have been arranged and the contracts exchanged.
Subject to survey: When an offer is made, subject to the result of the survey. This means that buyers and sellers can negotiate the price according to the true condition of the property.