Buying your first home? The world of property can appear confusing and complex, often for the language used alone!
Whether you’re a first-time buyer or a seasoned homeowner, understanding the terminology involved with the process can clear the fog of what’s involved and make it smoother, easier to understand and alleviate any stress. By understanding the language you can be empowered in the process.
Here are some of the most frequent terms you’re likely to come across, and what they really mean to your next purchase.
Freehold vs Leasehold
Freehold is when you own the property and the land it is built on outright. Leasehold means you own the property for a fixed period of time, but not the land it is built on. This land is typically owned by a third party which you are required to pay Ground Rent. Leasehold is frequently seen on apartments and maisonettes where the land is shared for multiple properties.
Conveyancing
Conveyancing is the legal process of transferring property ownership. This involved property searches to ensure the property is as being sold to protect the buyer’s interests, reviewing contracts, and handling the exchange of funds.
Completion
The completion date is when the property officially changes ownership. On this day the buyer pays the remaining balance and keys are handed over.
Chain
A chain exists when multiple buyers and sellers are linked by their sales. Each transaction depends on the success of the other. Properties with no onward chain or chain-free are generally more straightforward.
Chain Break
When a property sale falls through, it breaks the chain. This can be a result of financing issues or a change of heart by any of the parties involved.
Gazumping and Gazundering
Gazumping occurs when a seller accepts a higher offer from another buyer after already agreeing on a lower one. Whereas gazundering is when a buyer reduces their offer just before the exchange of contracts.
Exchange of Contracts
The point in the process where the buyer and seller exchange signed contracts, legally committing to the transaction. At this stage, the buyer usually pays a deposit.
Survey
A survey is an inspection of the property’s condition, and it can range from a basic valuation to a more detailed structural survey.
EPC (Energy Performance Certificate)
A document providing information about a property’s energy efficiency. It includes recommendations to improve energy performance. This is a legal requirement when selling a property.
Stamp Duty
A tax paid by the buyer on properties over a certain value. The rates vary depending on the property price and whether it is a first-time purchase or an additional property for those looking for a holiday home or buy-to-let for example.
Retention
The buyer’s solicitor retains a sum of money until the seller addresses certain issues, like repairs.
Title Deeds
These are legal documents proving ownership of a property. In modern transactions, these are often held electronically by the Land Registry.
Redemption Statement
A document from the seller’s mortgage lender detailing the amount needed to pay the mortgage in full.
Covenant
A legal obligation or restriction related to the use of the property is often outlined in the property’s deeds.
Land Registry
This is the government office responsible for maintaining a public register of properties in England and Wales, providing details of ownership and any charges on the property.
At PLS, we recognise that buying and selling your home can be a stressful experience and we want to help make the process as smooth as possible. Our team maintain a no-jargon approach to make sure you know exactly what’s involved, the progress achieved, and what’s to come. Knowledge is power, and we want to make sure all our buyers and sellers are informed along the way.
Source: LawNet
