Published 6 Jan 2020

An A-Z of Buying & Selling

We've put together a helpful A-Z of some terms you may come across during the process of buying and/or selling.

 

A is for... Appraisal           

A market appraisal takes place when an estate agent gives a recommendation as to an asking price that could be achievable for a property.

B is for... Beneficiary

In the context of property, a beneficiary is someone who is named within a will and stands to inherit money from the sale of a property in the deceased’s estate.

C is for... Covenant

A covenant is placed on title deeds and can apply to land or property. Their purpose is often to maintain standards/uniformity within a neighbourhood, for example, forbidding the storage of a boat in the front garden.

D is for... Deposit

A portion of the total price that will be paid for a property, between 5-10%. The deposit is paid to your solicitor prior to exchange of contracts then transferred, along with the remaining funds, to the seller upon completion (via their legal representative). 

E is for... Executor

An executor is a person who is nominated to carry out the instructions in a person’s will and deal with the sale of property from the deceased’s estate.

Fis for... Fensa

This government-authorised scheme ensures that replacement window and door installations comply with Building Regulations. Any such replacement works completed since 2002 should come with a Fensa or Building Regulations Completion Certificate.

G is for... Ground Rent

A payment due to the freeholder of a property that has been sold on a leasehold basis. The sum is paid by the leaseholder, typically once or twice a year.

H is for... Home Condition Report

 A buyer may instruct a surveyor to inspect their proposed purchase before they proceed to an exchange of contracts. From visual inspections to full structural surveys, any issues can be identified with advice on rectifying them provided.

I is for... Indemnity Insurance

This one-off payment, made on completion, is used to cover any historic property issues (i.e. with a lack of certification for works carried out). The policy, which is tied to the property itself, protects the new owner should any future issues arise.

J is for... Joint Agency

This is where more than one estate agent markets your property at the same time and, regardless of which one finds you a proceedable buyer, the commission is split between them. The seller will pay one fee to the successful agent.

K is for... Keys

On the day of completion, the seller’s solicitor will call the selling agent to inform them when sale funds have been received. At this point, completion has taken place and the agent is able to release property keys to the new owner.

L is for... (HM) Land Registry

A Government department dedicated to keeping records of land and property registration in England and Wales. A property must be registered with them when sold and they must be notified of subsequent changes in ownership and any leases/mortgages applied to a title.

M is for... Memorandum of Sale

This document is produced when a sale has been agreed and both the buyer and seller have appointed a solicitor/legal representative. A copy is sent to all four parties providing their details, the property address and the agreed purchase price.

N is for... Negotiation

After an offer has been received, the selling agent will put the offer forward to the seller, then communicate with both parties until an agreed sale price is reached.

O is for... Offer

These come in many forms including subject to selling, opening and best and final. The potential buyer will state the figure they would like to pay for the property, opening the negotiation. The seller may counter offer if the figure is below their expectations.

P is for... Progression

Once a sale has been agreed, your estate agent begins the process of monitoring the sale through to an exchange of contracts and subsequent completion, communicating with relevant parties to make sure everything is on track. This is where an agent really earns their commission.

Q is for... Questions

Referred to legally as ‘enquiries’, these come from the buyer’s solicitor and must all be answered to the solicitor’s satisfaction before contracts can be exchanged. They relate to property maintenance, surrounding areas, access rights and the responsibilities of the new owner.

R is for... Redemption

For sellers clearing their mortgage. The redemption figure is the remainder of the mortgage with possibly a penalty fee for redeeming the mortgage early. It is paid upon completion with the proceeds from the sale of the property that had been mortgaged.

S is for... Stamp Duty Land Tax (SDLT)

Paid when purchasing a property at a price over the current threshold (£125,000). The amount due will vary according to the purchase price as it is calculated in tiers.

T is for... Title Deeds

Title deeds are a record of property ownership, how much money was paid for the property and any charges (i.e. a mortgage) or covenants that apply to it.

U is for... Under Offer

This phrase is used when referring to a property that has a sale agreed and/or applicants who have a buyer. It is used interchangeably with ‘Sold Subject to Contract’ (SSTC).

V is for... Vendor

 The person(s) selling a property.

 W is for... Waiting

Many factors can affect the length of time it takes to buy/sell a property. Transactions involving mortgages may take longer, and leasehold properties may take even longer to go through than freehold. On average, the process takes between 8-12 weeks.

X is for... eXchange

Sorry! We know this actually begins with ‘e’ but it’s an important one so hopefully we’ll be forgiven! Exchange is the point when the completion date (moving day) is agreed and the sale becomes legally binding.

Y is for... Yield

Another way of saying ‘return on investment’. If an investor was looking to buy a rental property, for example, they would calculate the yield as a percentage by dividing the potential annual rental income by the property price then multiplying that figure by 100.

Z is for... Zzz

These ‘Z’s represent the good rest you can have when the process of moving is finished!

 

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