FAQs - what are you talking about?

If you're buying or selling a property for the first time you could be forgiven for thinking everyone is talking in another language sometimes, and that's before you see the legal paperwork!

We try to use plain English wherever possible, but inevitably there are a few terms, abbreviations and yes even jargon that you may not be familiar with that needs some clarification. We've put together a list for quick reference, it includes the most common words or phrases should something come up and we're not around to clarify for you...

What is?

Agreement in principle 

This is an estimate of how much money you can borrow from a mortgage lender. It can be used as evidence that you have the funds in place when you make an offer on a property for sale, it's certainly required if you have an offer accepted. It may also be referred to as a 'decision in principle', 'mortgage in principle'.

Buy to Let

Refers to the purchase of a property not to live in but to rent out.

Conveyancer

Essentially a lawyer who specialises in the transferring of homeownership. They are required if you are using a mortgage and will cover every legal aspect of the home purchasing process. But you wouldn't want to buy a property without one however it's being paid for. Unless you're, well a lawyer or conveyancer. 

Conveyancing

This is what the above conveyancer will be doing for you. When selling & buying property, the conveyancing process establishes exactly what you are selling, buying or both. Assess all of the legal documentation, including title deeds, and carries out 'searches', and 'enquiries' before 'completion'. 

Completion Date

Completion of the legal transaction when selling or buying a property. All monies and documents have been distributed and it's the legal moving day, estate agents will be instructed to release the keys. 

Contract

An obvious one perhaps but something you will hear being referred to as part of the conveyancing process. It's the legal agreement between a buyer and a seller. The agreement stipulates the main terms that have been agreed including price, address, boundaries and of course names. Two copies are drawn up, and each party signs one for 'exchange of contracts'.

Deeds

Documents that show ownership of the title of a property or land, along with any responsibilities on the property, e.g. what you can/cannot alter, rights of way, etc. Deeds are usually held by the mortgage lender until you pay off your mortgage, then they can be held by you or your solicitor.

Deposit

In this context, it's part of the purchase price which the buyer pays on the 'exchange of contracts'. It's usually 10% on standard purchases (5% on Help to Buy purchases).

Disbursements

These will be costs such as Stamp Duty, Land Registry fees & Search Fees charged to the acting conveyancer or solicitor but then paid for by the purchaser.

Enquiries

These are the questions raised by the Conveyancer acting for the buyer. These questions are to help the buyer’s Conveyancer understand any potential legal issues that may affect the property and that the buyer &/or their mortgage lender may need to be aware of before committing to purchasing.

EPC

Energy Performance Certificate; so this is the graph you'll see on property listings, much like the one on your white goods. It's the guide to the property's energy efficiency. The full report contains information on energy use, energy performance, carbon dioxide emissions, and fuel bills and also suggestions on how to improve the performance. Not the most riveting of reads but hugely important, it informs estimations on the cost of living and allows new owners to plan to improve efficiencies and become as sustainable as possible. If you are selling your property you must provide an EPC.

Exchange of Contracts

This is the swapping of signed contracts by the solicitors (together with the buyer’s deposit) mentioned above. After this, the contract is legally binding, from which neither party can withdraw without financial penalties. It's also when your 'completion' moving date is confirmed and each party can make final arrangements accordingly.

Freehold / Freeholder

The system of legal ownership of the land a property sits on. A freeholder has ownership of the land a building stands on.

FTB 

This is the abbreviation most agents, brokers and solicitors will use so if you are one, and you haven't seen or heard it yet, you will (sorry!) it's First Time Buyer

Gazumping

When a higher offer is made by another party and accepted, but, this is after an offer from a previous buyer (hopefully not you!) had been accepted. Point of fact, Ocean and in fact most estate agents do not encourage this activity at all. The difference in price is very unlikely to make much of a difference to the estate agent's fee, but the unfortunate stress and disappointment of the original buyer will. But, we are legally bound to present all offers and our commitment is to the property seller.

Ground Rent

The annual fee which a 'leaseholder' pays to the 'freeholder.

IFA

Simply 'Independent Financial Advisor'. In this context, it's going to be someone to offer the best advice, find the best mortgage product for you and make arrangements/applications. Some will charge, Ocean DO NOT. Click here if you're yet to find your perfect mortgage.

Land Registry

The Government department that records who owns what land, and under what conditions.

Leasehold / Leaseholder

Commonly referred to when buying or selling a flat/apartment but can also apply to some houses, there's actually quite a lot in Bristol. The leasehold means ownership of the building or part of the building such as a flat, but not the land it is built on. This normally requires payment of ground rent to the landlord or freeholder. A leasehold can be offered for various numbers of years for example 125, 250 or 999 years.

LTV

Loan to value. The ratio of how much your loan (usually a mortgage) will cover the price of your property, is written as a percentage. For example, a mortgage that offers 60 per cent LTV will cover 60 per cent of the property’s price.

Longstop Date

This one is for those buying a new build property. A longstop date is the date building works should be completed. If a developer fails to finish the property by this date, you may be entitled to withdraw your offer to buy the property without penalty.

Maintenance Charge

A charge that is made towards the upkeep of a freehold or leasehold property. For example, a building made up of apartments will need communal areas cleaned or lifts maintained. Even houses may benefit from shared parking or gardens that require upkeep.

Memorandum of Sale. Sales Letters

This is a document recording the fact that both the seller and buyer have agreed to a transaction. It can also be called a 'Notification of Sale'. It usually records the details of the purchase price, the details of the seller and buyer and their respective lawyers. If there are any conditions to the sale such as a specific exchange date this will form part of the Memorandum of Sale.

Mortgage Offer

A formal written offer made by a bank or building society to lend an approved amount to purchase a specific property.

Mortgage Term

Simply the period of time over which the mortgage loan is to be repaid.

Off-plan

Here we are talking about buying or more specifically reserving a property that isn't yet built. A decision is made from the site, building and specific property plans and drawings along with other marketing materials. 

Ombudsman

Not something you're likely to need but it's the Independent professional bodies that investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.

Property Information Form. Fixtures, Fittings and Contents Form

Standard forms about the property that the seller answers for their solicitor for example what appliances are to be included in the sale, details of guarantees, etc.

Repayment Mortgage

Your monthly repayment includes part interest and part capital repayment. So long as you meet all of the payments required by the lender on time, your mortgage will gradually reduce until it is repaid in full at the end of the mortgage term. For more about mortgage types, here's an FAQ all about them! 

Retention

If it transpires essential repair work to a property is required the mortgage lender may retain a proportion of the mortgage until the remedial work is completed.

Reservation Deposit. Reservation Fee

As you would expect it's a fee paid as a deposit, in this instance when reserving a new build property, sometimes 'off-plan'.

Searches

Checks of local authorities and utility provider records for planning applications, restrictions and issues. Click here for our FAQ to find out more.

SDLT. Stamp Duty

A tax, paid by the buyer, that's calculated on the percentage rate applicable to each portion of the property purchase price. Here's our Stamp Duty calculator to see what it might be if you are buying a property.

Snagging

One for new builds usually, but it may be that you are buying a recently refurbished property, snagging could be featured in the terms of sale in this instance also. It might include touching up paintwork, adjusting appliances and other fittings, and fixing any other faults within the property found within a fixed period of time after completion. A snagging survey is usually completed prior to the buyer moving in to spot minor cosmetic issues and check the quality of workmanship.

SSTC

This means Sold Subject to Contract. What we're saying here is that a property has had a sale agreed, but contracts have not been signed. You are very unlikely to be able to view a property that is listed as SSTC even if the sale is not yet completed. But it's worth keeping an eye on it if you are particularly interested as sometimes property becomes re-available, and contracts weren't exchanged.

Survey

An inspection made by a qualified surveyor. There are three main types of survey - Valuation Report (for mortgage purposes), Homebuyers Report (also comments on general condition) and Full Structural Survey (examines structural detail). These are carried out at the buyer’s discretion, click here for all you need to know.

Title Deeds

Legal documents that prove ownership of land or buildings, and the terms on which they are owned.

Vendor

This legal name is sometimes, (well often actually) used to describe the seller of a property.

We hope this was useful and demystified a few terms you may have already come across. Let us know if we can help with your home move in any way, there may be some jargon and a little stress along the way but it will be worth it. Good luck finding the place for you... 

Mon 09 May 2022