In agency, we can make things a little complicated to understand!
That's why, with the help of your input, we've put together a new jargon buster where we have aimed to cover as many words, terms and phrases as possible!
We'd love to build on this too, so if you ever come across something you're not sure about and think it would be good to include it in this guide, please just drop us a line.
Absent Landlord
A landlord is absent when they cannot be contacted. This can cause considerable issues when handling the sale of your property, however, If you are a lessee and are unable to contact the landlord, you do have an option to make a legal application to acquire the right to manage.
Agreement in Principle
Also sometimes referred to as a decision in principle, this is when a lender agrees to provisionally lend you funds to purchase a property based on initial information that has been provided. It is important to note that this is not necessarily a guarantee that you will get the funding you need as the full application process can only take place once you have secured a property to buy.
Applicant
We refer to you as an applicant when you are viewing, or registering your details to look for properties, or, in other words, you are a potential buyer. You only really become a buyer when you have had an offer accepted and the sales process is proceeding.
ARLA Propertymark
The ARLA Propertymark (formally the Association of Residential Letting Agents), is the UK’s foremost professional body for letting agents.
Asking Price
This is the price that a property is marketed for, and in not necessarily the sales price, which is agreed at the point of negotiation. There are other used terms when marketing a home for sale, such as Guide Price, offers in the Region/Offers in Excess of prices, Fixed pricing or Price on Announcement, just to mention a few.
Assured shorthold tenancy (AST)
A widely used rental agreement covering a fixed period, normally twelve months with a six-month break clause, or six months, so both parties know the date the property will be vacated.
Break clause
A clause sometimes agreed between the landlord and tenant to be inserted in a fixed term agreement, typically if the initial fixed term is for a year or more. A break clause will usually allow either landlord or tenant to give written notice after a particular date or period of the tenancy in order to end the tenancy earlier than the original fixed term.
Bridging loan
A temporary short-term loan enabling someone to purchase a property before selling his or her existing property. This is not to be confused with a mortgage as Bridging will involve far higher rates of interest.
Building inspection/Structural survey
A report on the physical condition of a property. The surveyor will look at all accessible parts of the property and give a written report on defects or issues affecting it. See also HomeBuyer Report which should not be confused with a mortgage valuation.
A full inspection of the property is conducted by a chartered surveyor and is suitable for any house, particularly older properties and those that have been poorly maintained.
Buildings Insurance
An insurance policy that pays the cost of repair or rebuilding in the event your property is damaged or destroyed. Most mortgage lenders will require buildings insurance to be taken out as a condition of their loan, and you will need to have insurance in place after exchange of contracts in most cases.
Buyer
A buyer, or purchaser, is what agents will refer to you as when you have agreed an offer on a property and are in the process of purchasing.
Buy-to-let mortgage
A type of mortgage specifically designed for people buying a property with the intention of letting it out.
Capital Gains Tax
A tax on profits above a fixed level made from the sale of financial assets such as a house, flat or shares.
Cash Buyer
This is a common phrase used by buyers that have no encumbered sale (As in are not reliant on the sale of a property to fund the purchase), however, it can be referred to accidently when a mortgage is required.
For the avoidance of doubt, a cash buyer is a buyer that has no related property sale and requires no funding. Most agents will require proof of cash funds.
Cash Proceeds
This is where a buyer is using the equity that is available in their current property to fund the purchase of their new home by selling the existing home.
Chain
A chain is formed when several property sales and purchases are inter-dependent. A chain can be complicated but a good estate agent will be able to help keep it moving.
Chain Free
This can be referred to in two ways, a buyer that has no encumbered transaction (a property to sell), or more commonly, as property that is offered for sale with vacant possession, or where the sellers have no intention of purchasing another home.
Completion
The point at which the sale of the property is concluded, and the buyer receives the keys.
Completion statement
A document which your solicitor or conveyancer will provide as a record of all the financial transactions and costs.
Commonhold
Commonhold is an alternative to the long leasehold system. It allows you to own the freehold of individual flats, houses and non-residential units in a building or on an estate. Unlike leasehold, there is no limit on how long you can own the property for.
Conditional selling
This is somewhat frowned upon in the estate agency world, in short, this basically means that a sale comes with certain conditions that benefit the agent in other ways, one good example is preferring one purchaser to another because the benefitting buyer has agreed to arrange a mortgage via the agent.
Contract
The legal document detailing the agreement of terms between the seller and buyer. When a sale is agreed, a draft contract is sent to the buyer by the seller’s legal representative and at exchange of contracts both parties are bound to a date on which to complete the sale.
Contract race
Where two or more purchasers are given a draft contract and the first one to exchange contracts buys the property.
Conveyancer
A representative, solicitor or licensed conveyancer, who deals with the legal aspects of buying or selling a property. The buyer and seller will each appoint their own conveyancer. In some cases, the buyer and seller may wish to use the sale solicitor, sadly this creates a conflict of interest so it is not possible, however, with larger firms, you may still be able to use the same company.
Conveyancing
The legal process of transferring the ownership of a property.
Conservation Area
An area of a town or street of architectural or historical importance where restrictions are in place for the maintaining of the buildings and heritage.
Covenants
Rules governing the property in its title deeds or lease. This can relate to who is responsible for carrying out works to a property for instance.
Damp Proof Course
This is a layer of material that protects a property from damp penetrating, commonly seen around two or three bricks above the ground level of a property. In some instances, we see this layer covered when a new patio is installed which can create a bridge to allow damp and moisture to enter your home.
Decision in Principle
See Agreement in Principle.
Deeds
The legal documents that prove the ownership of the property.
Deposit
When buying: The amount of money paid by the buyer on exchange of contracts, usually 10% of the purchase price.
When renting: A monetary sum held by the landlord or agent for security against damage to a property or a breach of the tenancy terms.
Deposit Protection Service
The DPS is a custodial scheme authorised by the Government; it is free to use and open to all landlords and letting agents. It requires a tenant’s deposit to be paid over to the DPS for the duration of the tenancy. This amount is then paid back at the end of the tenancy when an agreement between both parties has been reached.
Draft Contract
The initial version of the contract. This may be amended during the sale and becomes final at the point of exchange of contracts.
Disbursements
The fees paid by the solicitor on the buyer's behalf, such as stamp duty, land registry and search fees. These are also known as Legal Fees.
Easement
A right that affects a property – such as the right of neighbours to pass over an access path or the right of the water company to have their pipes and drains running under the property.
Enquiries
Questions which are raised by the buyer’s conveyancer, often
about survey or property information forms. These can be raised at the early stage as initial enquiries, and then later on in the purchase process as additional enquiries.
EPC
The Energy Performance Certificate (EPC) shows the energy efficiency and carbon emissions of a property and gives an indication of the fuel bills. Your property will be graded from A (the best) to G (the worst) with recommendations made on how best to improve the rating.
Equity
Your equity in your property is how much of it you own. It is the difference between the value of your home and the mortgage you still owe. Negative equity occurs when you owe more to your lender than the sale price of the property.
Exchange of contracts
The buyer and seller both sign the contract for sale and at a certain time and date the conveyancer’s action the exchange. At this point, the sale is binding, and no terms may be altered.
Freehold
The broadest form of property tenure guaranteeing that occupation continues for an indeterminate period. This contrasts with leasehold, which is always subject to a specified period of occupation. Freehold, in short, means that you own the entire property and grounds as shown in the official title.
Fixtures & Fittings form
Fixtures are items that have become part of a building or land and are therefore included in the sale. Fittings are not attached to the building or land and so are not included in the sale unless otherwise agreed. The seller will complete a fixtures and fittings form that will confirm what is included in the sale, what isn’t included, and what is for sale separately.
Flying Freehold
With a flying freehold someone else will own a different slice of the same land area either above or below what you own. This is often found in old cottages where the first floor of one cottage may be above the ground floor accommodation of the other. Both of these cottages would then have a flying freehold as the flying freehold doesn’t need to be in the air, it can be at ground or even below ground level such as a cellar under another property. Another example might be where the first floor of a house extends over a road or alley way which is in a different person’s ownership.
Gas safety record
A certificate that states all gas appliances, pipework and flues are safe. It is a legal requirement for all landlords and must be provided every year by a Gas Safe registered engineer after a safety check. In the sales process, a seller will be asked to provide a record of service to satisfy buyers enquiries.
Gazundering
Where a buyer reduces their offer just before the point of exchanging contracts.
Gazumping
Where a sale is agreed to a buyer at a certain price and then the seller accepts a higher offer from another buyer. Note that until contracts are exchanged estate agents are bound by law to tell a seller about any offer they receive for a property.
Ground rent
The annual charge by the freeholder on the leaseholder of a property.
Gifted Deposit
This is when a deposit is ‘Gifted’ by a family member or even friend to enable a purchase with a lesser loan to value. A gifted deposit will need to be disclaimed to a lender and conveyancer.
Guide Price
This is another form of expressing an asking price, hence, the figure shown is a guide to the sellers’ expectations. In some case an agent may express this as a range of prices.
HomeBuyer Survey/Report
A report designed in a standard and easy to read format that tells a buyer about the physical condition of a property.
This will provide initial information on any defects and grades their seriousness and need for attention often by way of a traffic light system.
Joint Sole Agency
This is when two agents are acting on behalf of a seller and will have an agreed split or share of the commission.
IFA
Independent Financial Advisor, also referred to as the mortgage broker.
Inventory
A list of the contents of a rental property. The inventory will note the condition of items and will form the basis of a dilapidation report at the end of the tenancy. It often includes photographs of specific items and existing damage/defects.
Land Registry
A government office which is responsible for holding records of land ownership and any charges, including mortgages, against the property.
Land Registry fee
A fee charged by the Land Registry to record the change of ownership of a property.
Lease
The legal document governing the occupation by the tenant of a premises for a specific length of time. At the end of the period the property reverts to the owner. In the case of ownership, see below.
Leasehold
The use and occupation of a property by way of a lease agreement for a certain period. A lease is frequently applicable to flats but can also apply to houses. The term of a lease varies but is commonly 99, 125 or 999 years.
Let to Buy
This has become a lot more common in recent years and basically means that a buyer is taking out a buy to let mortgage on their own property with a view to letting it out, releasing capital by way of this mortgage and then using this to fund the full or partial purchase price of their next home.
Listed building
Buildings of special architectural or historic interest. A listed building may carry certain obligations and restrictions governing its use, repair, extension, improvement and maintenance.
LTV (Loan to Value)
The LTV is calculated on the amount of deposit that is being put down versus the asking price of the property, for instance, if you are putting down a deposit of £10,000 on a purchase price of £100,000, you would have a 10% deposit meaning the LTV would be 90%.
Management Pack
This is a pack containing various items of information surrounding the sale of a leasehold property, or new/recent developments of homes provided by the freeholder or managing agent. This will contain information regarding any restrictions that are in place, maintenance schedules and future charges.
Market Appraisal
Referred to so often as a valuation, this is what estate agents provide when appraising your home and is not a formal mortgage valuation that should be carried out by a RICS surveyor.
Memorandum of Sale
This is a document created by an estate agent that sets out the particulars of a sale once it has been agreed. This will provide the information of the sellers, buyers and conveyancers, sets out the asking price and any agreed terms and timescales.
Mortgage valuation
Very commonly and incorrectly referred to as a “survey”, the mortgage valuation is carried out by a surveyor acting on behalf of a lender to provide them with a professional report stating the value of the property. The purchaser usually pays the fee for this valuation. In some cases, specifically new or nearly new homes, or where there is a high deposit involved, a desktop valuation will be carried out instead of a physical visit.
Mortgage Offer
A mortgage offer is provided by a lender at the point that they are satisfied that a client meets the correct criteria, and that the property is suitable for lending purposes. Mortgage offers normally have a set timescale by which point a purchase needs to exchange and complete.
Multiple agent instructions
Where more than one estate or letting agency firm is instructed by a seller or landlord to offer a property for sale or to rent. In almost every case, Multiple Agency will be arranged on a winner takes all basis.
NAEA PropertyMark
The NAEA Propertymark (formally the National Association of Estate Agents) is the UK’s leading professional body for estate agency.
Negative equity
Where the sale value of a property is less than the amount outstanding on the mortgage.
Offer
A amount of money that you are prepared to pay for a property that you offer to the seller either directly, or via an agent. It is a common misunderstanding that an offer is lower than the asking price, this is not the case, indeed an offer can be of, or even in excess of the asking figure.
Offers in Excess
Commonly used by some agents to act as a guide to the figure a seller is willing to accept, however, this is not the correct view of an asking price where offers in excess is indicated, this very simply means that the seller is expecting an offer over the indicated figure.
Offers in the Region
This simply means that the seller is looking to accept an offer within the region of the price that has been indicated, this can be more, or less than the actual quoted asking price.
Offers Invited
In some cases, a seller will not wish to lower their asking price, but they are open to offers, this is when offers are invited.
Offer
A amount of money that you are prepared to pay for a property that you offer to the seller either directly, or via an agent. It is a common misunderstanding that an offer is lower than the asking price, this is not the case, indeed an offer can be of, or even in excess of the asking figure.
Offers in Excess
Commonly used by some agents to act as a guide to the figure a seller is willing to accept, however, this is not the correct view of an asking price where offers in excess is indicated, this very simply means that the seller is expecting an offer over the indicated figure.
Offers in the Region
This simply means that the seller is looking to accept an offer within the region of the price that has been indicated, this can be more, or less than the actual quoted asking price.
Offers Invited
In some cases, a seller will not wish to lower their asking price, but they are open to offers, this is when offers are invited.
Radon Gas
Radon is a natural radioactive gas which comes from the decay of uranium in rocks and soil. It is colourless, odourless and tasteless. In outside air the levels of radon are low, but it collects in enclosed places, such as houses, workplaces and other buildings.
It is commonly found in several areas across the UK but is more likely than not deemed to be in very low quantity and therefore of no concern. Testing is available to confirm the levels of the gas in your property.
Repossession
If a mortgage is not paid over a period, the lender may ultimately take ownership of the property by the process of repossession.
Sale agreed
This is the period after an offer has been made on a property and accepted by the sellers and is also known as when the property is under offer. In normal circumstances, but not all, the property will be removed from the open market.
Sale by Tender
The simplest way to explain this is to imagine a sealed bid
situation. Where a property is expected to generate a lot of interest an agent may invite offers by a certain time and date to then be reviewed. This can also be known as best and final bids for a property if the agent is receiving lots of interest after marketing commences.
Be aware that in some cases finders’ fees may apply.
Searches
Searches are applied for by your conveyancer (Or in some cases you can apply for personal searches yourself). These are in effect fact finding searches to gain additional information and, to name a few, consist of drainage, environmental, chancel and also the Local authority search which is where a buyer’s conveyancer makes a formal enquiry to the local authority to find out if there are any matters affecting the property that is being purchased.
It is compulsory to have a local authority search before exchanging contracts if you require a mortgage to purchase.
Section 21
In England and Wales, a section 21 notice, also known as a section 21 notice of possession or a section 21 eviction, is the notice which a landlord must give to their tenant to begin the process to take possession of a property let on an assured shorthold tenancy without providing a reason for wishing to take possession.
Section 8
A section 8 notice can be used to evict an assured shorthold tenant or an assured tenant for a legal reason or 'ground'. Your landlord has to prove the ground at a court hearing if they use this type of notice. The most common reason for a private landlord to use a section 8 notice is rent arrears.
Seller
The seller is the person that has a legal right to dispose of a property, this can be someone with power of attorney or executive powers.
Share of freehold
This is when the freehold of the property is owned by a limited company and the shareholders are the owners of the property, usually the owners of flats within that building.
Sole Agency
Where only one estate or letting agency firm is instructed by a seller or landlord to offer a property for sale or to rent.
Sole selling rights Agency
Where an estate agency or person is granted “sole selling rights” by the seller of a property, they will be able to claim an agreed fee regardless of who introduces the buyer.
Sold
A property is deemed to have sold when completion takes place.
SSTC (Sold Subject to Contract)
Where contracts are still not exchanged, and nothing is yet legally binding on either seller or buyer. Similar to Sale Agreed or Under Offer. Commonly, however, some agents will change a board from sale agreed to sold subject to contact on exchange.
Stamp Duty Land Tax (SDLT)
The tax paid to the government by the purchaser of a property. Rates of SDLT vary dependant on the purchase price and also whether it is a main or second residence that is being purchased.
Sub Agency
This is where an agent instructs another agent to assist with the sale, it can be in cases where the sub agent is more local to the property. Unless otherwise agreed, the sub agent shall only benefit from a share of the commission that has been agreed between the main agent and the seller.
Subject to Selling Offer
This is an offer that is made on a property when the potential buyer has not agreed the sale of their own property and is reliant on this to fund the purchase.
In some cases, sellers may grant a period of grace to allow the potential buyer to sell their own home.
Subsidence
This is a major structural defect where the ground that the property stands on is no longer capable of supporting the buildings weight.
Tenancy Deposit Scheme (TDS)
An insurance-based scheme run by The Dispute Service Ltd. for the protection of tenancy deposits and the resolution of disputes between landlords, agents and tenants concerning the return of deposits at the end of a tenancy. TDS has launched a Code of Recommended Practice.
This Code of Practice sets out the recommended requirements which letting agents and landlords should meet as members of the Tenancy Deposit Scheme.
Tenant
The person who has temporary possession of a property under a lease or tenancy agreement.
Tenure
The mode of holding ownership of a property: for example, leasehold or freehold.
Title deeds
Documents detailing and confirming the legal ownership of a property.
TPO (Tree Preservation Order)
This is an order that is put in place by local authorities for the protection of indigenous trees or tress of special interest. Where one exists, you cannot cut down or trim the tree without permission.
Transfer document
The final legally binding document that transfers the property and all its rights from the seller to the buyer.
Vendor
Another name for a seller, the person that has the legal right
to sell their property.
