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Jargon buster: buying and selling

November 2020

The process of buying or selling a home can be confusing at the best of times, and that’s without all the terminology that comes along with it. Whether you're speaking with an estate agent, mortgage advisor, surveyor or someone else - you know someone’s going to use a phrase or term you’re not familiar with.

Fear not, we’re here for you! To help you quell the confusion, we’ve compiled all the terms you’re likely to hear, but might not be familiar with, in our jargon buster.

Acceptance

The document that is issued by a mortgage lender to a potential buyer and confirms the acceptance of a mortgage offer.

Agreement in principle

This is provided by a mortgage lender and confirms that they are prepared to lend the potential buyer the funds to complete a purchase, subject to the approval of the property.

Arrangement fee

A fee charged by some lenders to cover the administrative cost of arranging a mortgage cost – these are often charged to deals, e.g. special or fixed rate mortgages.

Asking price

The amount of money the seller is hoping to earn from their home.

Assignment

The act of transferring the right or interest in a property from one person to another.

Bridging loan

A temporary loan, usually carrying a high interest rate, which allows the recipient to buy a property before selling their existing home.

Building inspection

This is a report on the physical condition of a property.

Buy-to-let mortgage

A mortgage used to buy a property that will be rented out for investment purposes.

Chain

The connected line of people who need to sell their current home to buy the next one – if, for example, one link (person) in the chain pulls out of their sale, the whole chain can collapse.

Completion

The conclusion of the sale – when the buyer receives the keys.

Contract race

When two or more purchasers are given a draft contract and the first one to exchange contracts buys the property.

Conveyancing

The legal process of transferring the ownership of a property, e.g. from a seller to a buyer. Looking for more information on conveyancing? Find it here.

Declaration of trust

An agreement drawn up by a conveyancer which outlines ‘who gets what’ if a property is sold or one owner buys out the other – these are common where two people are cohabiting, e.g. friends or a couple.

Deeds

The documents that prove ownership of a property.

Default

When a borrower fails to meet their agreed repayment schedule – this applies to any kind of loan, including a mortgage.

Deposit

The money you’ll need to pay upfront to secure a mortgage to buy a home – deposits are usually 10% of a home’s value, but this may vary.

Disbursements

These are fees that are paid by the solicitor on behalf of the buyer, e.g. stamp duty or money transfer fees.  

Easement

A right that affects a property, such as the right of a neighbour to use a private road.

Energy Performance Certificate (EPC)

A certificate that details how energy efficient a property is. The certificate ranks properties on a scale of A-G (with A being the most efficient). EPCs offer an estimation of energy costs and recommendations as to how the efficiency of a home can be improved.

Fixed rate mortgage

A mortgage deal which comes with a predetermined interest rate for a defined period, usually two, three or five years.

Fixtures and fittings

Fixtures are items that have become part of a building or land and are included in a sale, e.g. a garage. Fittings are not attached to the building or land and are not included in the sale unless agreed, e.g. kitchen appliances.

Freehold

The freeholder of a property owns it outright, including the land the property is built on. If you own the freehold of a property, you’re responsible for maintaining the property and the land it sits on.

Gazumping

When a sale is agreed at a certain price, but the seller accepts a higher offer from another buyer. Looking for more information on gazumping? Find it here.

Gazundering

Where a buyer reduces their offer at the point of exchanging contracts to try to purchase a property for a lower price.

Guarantor

A guarantor commits to making payments, e.g. on a mortgage, when the borrower fails to keep up with their repayments. Guarantors may be a family member or close friend.

Help to Buy

Help to Buy is a government scheme which aims to help people with small deposits buy a new-build home.

Instruction

When a property owner asks an estate agent to market their property for sale.

Land Registry fee

A fee charged by the Land Registry to record the change in ownership of a property.

Leasehold

The ownership and right to occupy a property by way of a lease for a given period – leases usually range from 90 to 999 years.

Negative equity

Where the sale value of a property is less than the amount outstanding on a mortgage.

Preliminary enquiries

When a conveyancer, on behalf of the buyer, sends a list of questions about a property to the seller’s conveyancer.

Redemption

Completion of the full and final repayment of a mortgage.

Shared ownership

The option to buy a share of a property (between 25-and 75%) from a housing association – you will then pay an affordable rent on the share of the property you don’t own.

Stamp duty

Tax paid to the government by a buyer after purchasing a property – the rate of tax paid depends on the value of the home bought.

Subject to contract

A provisional agreement that is not yet legally binding as contracts have not been exchanged – at this point either party can still withdraw from the agreement.

Survey (building survey or structural survey)

A report determining whether there are any structural faults in a property. Find out more about surveying here.

Under offer

Where the seller has accepted an offer from a buyer, but the exchanging of contracts has not been completed.

Valuation (sometimes known as an appraisal)

A term used by estate agents to cover the process of finding a property’s market value. Get your property valued here.

Vendor

A vendor is a person selling a property.

Contact your local branch

Get in touch if you have any questions about property, whether its buying, selling, renting or letting we’re here to help.

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