Selling glossary

A

Advance

Mortgage Loan.

APRC

Annual Percentage Rate of Charge, total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit, including interest and other charges applying.

Auction

The sale of a property to the highest bidder.

B

Balance Outstanding

The amount of loan owed at a particular time.

Bridging Loan

A temporary loan advanced to help buy a new property before the existing one has been sold.

Buildings Insurance

Insurance against the cost of repair or rebuilding a property from scratch following structural damage, for example by flood, fire or storm.

Buy to Let

An investment where you buy a property – usually with a mortgage – and rent it out.

C

Chain

A number of linked property sales where exchange of contracts must take place simultaneously.

Closing Date

The date set for submission of offers when more than one party show interest in the property.

Completion Date

Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys.

Conclusion

See under 'Subject to contracts exchanged'.

Contents Insurance

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

Contract

A formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale.

Conveyancer

Person other than and similar to a solicitor who may conduct the conveyancing.

Conveyancing

The legal work involved in buying and selling properties.

Council Tax

Levied by local councils to cover the cost of local amenities and services.

Covenant

A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something.

D

Deeds

Legal documents assigning ownership of a property and/or land.

Deposit

Sum of money that represents the personal capital that the buyer is putting toward the purchase of the property.

Disbursements

Fees, such as Stamp Duty, Land Registry and search fees on top of conveyancing which you normally pay via your solicitor.

Draft Contract

Unconfirmed version of the contract.

E

Early Repayment Charge

A charge made by the lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. Normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage.

Energy Performance Certificate (EPC)

All properties let for private residential purposes must have an EPC. It is used to report the energy performance of a property.

Equity

The difference between the value of a property and the amount of mortgage owed.

Exchange of Contracts

The point at which the sale becomes legally binding from which neither party can withdraw without financial penalties - In Scotland see 'Missives Concluded'.

F

FIMBRA

Financial Intermediaries Managers & Brokers Regulatory Authority.

Fixed Price

Offers are invited at the price shown.

Fixtures and Fittings

All non-structural items included in the purchase of a property.

Freehold

Ownership of the property and land upon which the property is situated.

Full Structural Survey

A full structural survey looks at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden.

G

Gas Safety Check

Landlords are required to arrange of a gas safety check to take place annually on rented properties. This must be carried out by a registered engineer.

Gas Safety Record (GSR)

A document which shows that gas appliances (including a gas meter) have had an annual gas safety check carried out by a registered engineer. Landlords are legally required to have a GSR produced annually.

Gazumping

The practice by a seller accepting a higher price than that previously agreed with someone else.

Gazundering

The practice by a buyer lowering his offer just before exchange of contracts.

Ground rent

The annual fee which a leaseholder pays to a freeholder.

H

Home Buyers Report

The homebuyer's report comments on the structural condition of most parts of the property that are readily accessible, but does not involve in-depth investigation or the testing of water, drainage or heating systems.

Housing Association

A non-profit making body which lets you buy a percentage of the property and pay rent on the rest.

I

IFA

Independent Financial Advisor.

IMRO

Investments Managers Regulatory Organisation. Regulates investment managers.

Instruction

When a seller instructs an estate agent to market a property.

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 Certificate

A Land Registry certificate proving ownership of property.

Land Registry

The Government organisation that holds records of all registered properties in England and Wales.

LAUTRO

Life Assurance Unit Trust Regulatory Organisation.

Leasehold

To be given ownership of a property but not the land it is built on. This normally requires payment of ground rent to the landlord. A leasehold is normally offered for either 999 years, 99 years or shorter terms.

Local Authority Search

An application made to the appropriate Local Authority requesting details of any planning or other matters which might affect the property being sold.

M

Maintenance Charge

A charge made towards the upkeep of a leasehold property.

Missives Concluded

Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys.

Mortgage Deed

A legal document relating to the mortgage lenders interest in the property.

Mortgage Offer

A formal written offer made by a bank or building society to lend an approved amount to purchase a property.

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

Negative Equity

When the value of a property is less than the outstanding sum owed on a mortgage.

O

Offer

A bid made by a prospective buyer, this is not legally binding.

Offers Over

Offers are invited above the price shown.

Ombudsman

Independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.

P

Part-possession

The term used when a property is being sold, where a tenant has legal right of occupation.

Portfolio

When a landlord lets more than one property, this is called a ‘portfolio’.

Private Treaty

The way in which most house sales are completed in England and Wales.

Property

Your home or the property you wish to sell or buy.

R

Repayment Mortgage

Your monthly repayment includes part interest and part capital repayment. So long as you meet all of the payments required by the lender on time, your mortgage will gradually reduce until it is repaid in full at the end of the mortgage term.

Repossession

When loans are in default the mortgage lender can repossess the property and sell it so they can repay the debt.

Retention

Holding back part of a mortgage loan until repairs to the property are satisfactorily completed.

S

Sale Agreed

A verbal agreement from the seller.

Searches

Checks of local council records for planning applications and restrictions, etc.

Sole Agency

The choice of a single estate agent to act on the seller's behalf, incurring a lower fee than multi-agency.

Solicitor

Legal expert handling all documentation for the sale and purchase of a property.

Stamp Duty

A tax paid to the Government by the buyer upon completion.

Subject to Conclusion of Missives

Words used to indicate that an agreement is not yet legally binding.

Subject to Contract

Words used to indicate that an agreement is not yet legally binding.

Survey

An inspection made by a qualified surveyor. There are three main types of survey. Valuation report (for mortgage purposes), Homebuyers report (also comments on general condition) and Full Structural survey (examines structural detail).

T

Tenants

People living in a property owned by someone else.

Tender

The process whereby the seller asks for written offers on a property usually with a set closing date.

Title

The ultimate record of ownership of a property, the evidence of which is found in the title deeds.

Transfer Deeds

The Land Registry document that transfers legal ownership from seller to buyer.

U

Under Offer

When the seller has accepted an offer on the property but contracts have not yet been exchanged.

V

Variable Interest Rate

Rate of interest payment that fluctuates over time inline with general interest rates.

Vendor

The legal name sometimes used to describe the seller of the property.

Verbal Offer

Offer from prospective purchaser, not legally binding on either party.

W

Writ

Mode of commencing legal proceedings.

X

Exchange.

Y

Yield

The amount of money a landlord receives from in rent as a proportion of the amount of money invested in the property.