How to understand the jargon

Advance
A mortgage advance is the amount of money the lender has agreed to loan to the buyer

ARLA
Association of Residential Letting Agents

Auction
Buyers bid for a property and the winning bid becomes a legally binding contract as the hammer comes down

Base rate
The interest rate set by the Bank of England

Bridging loan
A short term loan to enable a purchase, used to ‘bridge the gap’, before other funding is available

Buildings insurance
Buildings insurance provides financial protection if the structure of your home is damaged to cover repairs

Buy to let
Purchasing a property for the purpose of letting it out to tenants

Buyer
The person or people who are buying a property or intend to buy one

Cash buyer
A buyer who does not need a mortgage and has sufficient available funds to purchase a property in full

Chain
A sequence of linked transactions which all need to progress in order for any of the individual transactions to succeed.

Commonhold
A type of ownership for multi-occupancy developments where the individual property owners also collectively own and manage the common areas.

Completion date
The day set for the buyer to pay the seller for the property and the seller to vacate and handover the keys and ownership - otherwise known as moving day!

Contents insurance
A policy designed to financially protect your possessions within the home in case of issues such as fire, flood or theft

Covenant
A formal agreement in the deeds to do, or not do, something specific

Deposit
An amount of money payable as an initial instalment to buy a property

Easement
A legal right to enter or use the land or property owned by someone else

EPC
Energy Performance Certificate is a report which rates the energy efficiency of a property from grades A to G. An EPC is required by law when a residential property is marketed for sale or rent

Equity
Equity is the portion of the property which you own without a loan or mortgage

Exchange of contracts
This is the agreed point when the sale and purchase of a property becomes legally binding to both buyer and seller

Fixtures & Fittings
This is a confirmed list of what the seller will leave in the property; fixtures are part of the building, such as kitchen cupboards, and fittings could be easily removed, such as curtain rails

Flying freehold
Flying freehold is type of ownership where part of a freehold property extends across, above or below an adjoining property

Freehold
The owner of a freehold property also owns the land it’s built on

Gazumping
Another buyer makes a higher offer than the one previously accepted by the seller who then sells to the higher bidder

Gazundering
The buyer reduces their previously agreed offer to a lower amount before exchange of contracts

Home Buyers Report
A type of survey which reports on the main condition of the building rather than in-depth checks of a full survey

Instruction
When an estate agent is formally appointed to sell a property

Land Registry
A government office which keeps information about ownership and interests relating to land & property

Leasehold
A type of ownership where you own the property for a fixed period of time, the landlord owns the land the property is built on

Let to buy
An owner lets out their current home to tenants and buys another property to live in themselves

LTV
The loan to value ratio is the percentage of mortgage in comparison to the value of the property being bought or remortgaged

Market appraisal
This is when an estate agent visits the property and assesses its recommended best asking price for sale and marketing strategy

Mortgage
A loan from a bank or building society which is used to purchase a home or property and is to be paid back over time, with the property used as collateral to secure the loan

Mortgage offer
The document issued by the lender to confirm the agreement to loan the borrower the money to buy a specific property

NAEA Propertymark
National Association of Estate Agents

OIEO
Offers In Excess Of

OIRO
Offers In the Region Of

Probate
The legal right to deal with the property, possessions and money of someone who has died.

Repossession
A property which has been taken back into possession by the mortgage lender when the buyer defaults on payments

RICS
Royal Institution of Chartered Surveyors

Searches
Property searches are enquiries made to the local authority by a buyer’s conveyancer to check information about the property before exchange of contracts

Snagging
Any minor defects within a newly built property after construction and finishing has been completed

SSTC
Sold Subject to Contract (also known as Under Offer or Reserved)

Stamp Duty Land Tax
A government tax on the purchase of property or land to be paid on legal completion

Survey
A detailed inspection and report undertaken by a qualified surveyor about the condition of a property

Title deeds
The document or deeds providing evidence of legal ownership

Under offer
An offer has been accepted to buy a property but legal contracts have not yet been exchanged

Valuation
A formal valuation undertaken by an RICS qualified surveyor

Vendor
The seller of a property

Verbal offer
Once an estate agent receives an offer by phone or in person for a property, this verbal offer will be confirmed to the seller; the agent will confirm in writing whether the offer is accepted or not.