At Sellmyhome, we know how baffling the world of property can be - especially if you’re selling your home for the first time!
… And if you’ve sold a few homes, it’s also very much OK to need to look up the meaning of all this property terminology (or estate agent’s jargon). No one expects you to know all the acronyms or legal terms off the top of your head (unless you’re a property tycoon, in which case you really should by now!).
So, here it is; the complete glossary of all the terms you need to know if you’re planning to sell your home:
Advance – the money loaned to the buyer, by the lender.
APR – Annual Percentage Rate. This is the amount of interest you will pay on your loan, expressed as an annual percentage of the total amount of credit, including interest and other charges applying.
Balance Outstanding – the amount of loan owed at a particular time.
Broker - another term for Mortgage Broker; the person who will help you find and secure the right mortgage product for you.
Bridging Loan - a temporary loan given to help buy a new property before the existing one has been sold.
Chain – a number of property sales which are linked together as each is dependent on the preceding and succeeding purchase. Exchange of contracts must take place at the same time.
Completion Date – the date of completion of the legal transaction. The money will be transferred to the seller and keys are released.
Contract – the formal agreement between the buyer and seller, prepared by the solicitor (or conveyancer), detailing the terms and conditions of the sale.
Conveyancing – the area of law involving the buying and selling of properties.
Deeds – the legal documents that assign ownership of property.
Deposit – the sum that the buyer pays towards the cost of the property on exchange.
Disbursements – expenses such as Stamp Duty, Land Registry and search fees, paid by the purchaser through the solicitor.
DIP/ AIP - Stands for Decision in Principle or Agreement in Principle; referring to the decision or agreement to lend by your mortgage provider.
Draft Contract - the first version of the contract; the exact wording and terms of which have not been agreed by both sides.
Early Repayment Charge – a charge made by the lender if the borrower pays off the mortgage before the terms stipulated in the mortgage. The amount will depend on the mortgage outstanding and the terms of the mortgage.
Equity – the difference between the value of a property and the outstanding balance of all liens on the property. The property's equity increases as the owner makes payments against the mortgage balance.
Exchange of Contracts – this is the point at which the sale becomes legally binding and neither party can withdraw without financial penalties.
Fixed Price – an indication that offers will be accepted for the price shown only.
Fixtures and Fittings – any non-structural items included in the purchase. Fixtures are items that are fixed to a building or land and are therefore included in the price of the property. Fittings are not attached to the building or land and so are not included in the price unless otherwise agreed. The seller will complete a fixtures and fittings form that will confirm what is included in the sale, what is not, and what’s available for purchase separately.
Freehold – ownership of the property as well as the land on which it is built.
Full Structural Survey – an inspection of the main features of a property, conducted by a chartered surveyor who will write a report on all walls, roof, foundations, drains, joinery, electrical wiring, plumbing and garden.
Gazumping – this is where the seller accepts one offer only to reject it (before the exchange of contracts) for a higher offer from a third party.
Gazundering – this is where a buyer reduces their offer before the exchange of contracts.
Ground Rent – this is an annual sum paid by the property leaseholder to the freeholder.
Guide Price - an indication on price given by the estate agent. Offers could be over or under this amount.
Home Buyers Report – a report conducted by a surveyor on the structural condition of the readily accessible parts of the house. It is not an in-depth investigation and does not involve the testing of water, drainage or heating systems.
Housing Association – this is a not-for-profit organisation sometimes known as registered social landlords. They own, let and manage rental housing. Some have schemes that allow you to buy a percentage of the property and pay the rest on rent.
HMO – House in Multiple Occupation. A building that is occupied by 3 or more people, living as more than 1 household and sharing facilities such as bathrooms, toilets or cooking facilities. They are treated differently to the average property, with more rules and regulations.
IFA – Independent Financial Advisor
Instruction – this is when a seller officially asks an estate agent to market a property.
Joint Mortgage - where more than one person is responsible for the mortgage.
Land Certificate – a document issued by the land registry as a proof of ownership with no mortgage on it.
Land Registry – the government organisation that holds records of all registered properties in England and Wales. You can find out more about what they do here, and you can also use their tool to find out how much a property sold for (in England and Wales).
Leasehold – the type of ownership where an individual owns a property, but not the land on which it is built. The owner of the Freehold will grant a lease on the property for a specified length of time and often require the payment of ground rent.
Local Authority Search – a procedure where a buyer's solicitor checks with the local council with regard to any outstanding enforcement or future development issues that might affect the property or immediate area.
LTV - Loan to Value - the proportion of the value of the property on which the lender is prepared to loan.
Maintenance Charge – this is a fee paid by the tenant to the landlord for the maintenance and upkeep of external or internal communal parts of a leasehold property.
Mortgage Deed – a legal document that details the conditions of a mortgage secured on a property.
Mortgage Offer – a formal letter from the lender offering the purchaser of the property the loan and its conditions.
Mortgage in Principle - an agreement by the lender to lend based on an initial assessment of your financial circumstances; including your income, outgoings and credit score. A mortgage in principle can make you a more attractive buyer by showing sellers that you can (theoretically) afford to buy a property.
Negative Equity – this is when the value of the property is less than the outstanding amount owed on a mortgage.
Offer – when you make an offer on a property, you put in a bid of the price that you’d like to pay for the property. This is not legally binding.
OIEO - Offers in Excess Of.
OIRO - Offers in Region Of.
Repayment Mortgage – a mortgage in which monthly repayments pay off the capital and the interest over a fixed period.
Repossession – if you fail to repay your mortgage, then the lender can retake possession of the property and sell it to recover the debt.
Searches – lawyers will conduct searches to check anything that may affect the current or future value of the property. They include local authority search, water & drainage search, and environmental search.
Sealed Bids - this is where estate agents give all potential buyers a chance to bid their maximum price for the property in order to achieve the best possible price for the seller. The buyer would send their bid in writing to the estate agent on the date and time specified.
Shared Ownership - this is a scheme which enables people who can't afford the deposit and mortgage on 100% of a property to buy a share of the property (between 25% and 75% of the property’s value) and pay rent on the remaining share. Further down the line, there is the option to buy more shares once it becomes affordable. You can read more about the Shared Ownership Scheme here.
Sole Agent - this is where only one estate agent is instructed to handle the sale of a property. It’s recommended that a sole agency agreement should be agreed for a specific period of time.
Sold STC - Sold Subject to Contract – a term associated with an agreement to purchase a property before the exchange of contracts.
Stamp Duty – Stamp Duty Land Tax (SDLT), a government tax placed on legal documents, paid by the buyer on completion of the sale. You can read more about stamp duty here.
Survey – an inspection of a property made by a qualified surveyor. This can be a valuation report, a homebuyers report, or a full structural survey.
Title – in property law, a title refers to the legal right of ownership of a property.
Transfer Document (Transfer of deeds, Transfer of title) - this is the document that transfers legal ownership from seller to buyer.
Under Offer – this is when the seller has accepted an offer on their property but the contracts have not been exchanged yet.
Vendor – this is also known as the seller.
Now, you’re ready to start selling your home! Get in touch with Sellmyhome today - we promise not to speak in confusing estate agent’s jargon, plus we could save you thousands on estate agents fees. We’re an online estate agent and we don’t charge a commission (just a flat rate from as little as £795).
We’ll market your property on Rightmove, Zoopla and many more, and proactively find potential buyers through our social media advertising tool. Our agents vet and look after your potential buyers with the greatest care. We are rated 9.8 out of 10 on Trustpilot, so why not Sellmyhome?