Do you ever get confused by some of the language that estate agents use? We have put together this jargon buster tool for you! If you want us to add anymore to this list then please just let us know and we will be more than happy to help.
Chain
When you hear the term "chain" in the context of real estate, it refers to a sequence of property transactions that are dependent on each other. For instance, if you're selling a property and simultaneously purchasing another, your sale is linked to your purchase, and thus, you become part of a chain. Understanding the concept of chains can help you anticipate potential delays or complications in your own transaction.
Conveyancing
Conveyancing is the legal process of transferring property ownership from one person to another. It involves various legal tasks, such as conducting searches, preparing contracts, and exchanging funds. While estate agents are not typically responsible for conveyancing, they often work closely with solicitors or conveyancers to ensure a smooth transaction.
Gazumping and Gazundering
Gazumping and gazundering are terms used to describe specific negotiating tactics in property transactions. Gazumping occurs when a seller accepts a higher offer from another buyer after already accepting an initial offer. On the other hand, gazundering refers to when a buyer lowers their offer just before the exchange of contracts, putting pressure on the seller to accept a lower price. Both practices can be frustrating and stressful for all parties involved.
Leasehold and Freehold
These terms refer to the different types of property ownership. Leasehold means you own the property for a specific duration outlined in the lease agreement, typically long-term but not perpetual. Freehold, on the other hand, grants you complete ownership of the property and the land it stands on. Understanding the distinction between these two types of ownership is crucial, as it affects your rights and responsibilities as a property owner.
Instruction
When an individual or entity formally engages an estate agent to sell or rent their property, it is referred to as an instruction. The agent then becomes responsible for marketing the property, finding potential buyers or tenants, and negotiating the terms of the transaction. The instruction is the starting point of the agent's involvement in the sale or rental process.
Offers Over, Offers In Excess, and Guide Price
You'll often come across these terms in property listings. "Offers Over" indicates that the seller is expecting offers higher than the stated price. "Offers In Excess" suggests a minimum price that the seller is willing to accept. "Guide Price" provides a rough indication of the property's value, often reflecting the seller's expectations. It's important to remember that these terms are not set prices but rather starting points for negotiations.
Valuation
A property valuation is an assessment of a property's worth conducted by a qualified professional, such as a surveyor or valuer. The valuation takes into account factors such as the property's condition, location, size, and market conditions. It provides an estimate of the property's market value, which is essential for setting an appropriate asking price or determining an offer.
EPC (Energy Performance Certificate)
An Energy Performance Certificate is a document that assesses the energy efficiency of a property. It provides information on the property's energy usage, carbon dioxide emissions, and suggestions for improving energy efficiency. EPCs are mandatory for most residential and commercial properties when they are sold, rented, or constructed.
Completion
Completion is the final stage of a property transaction when legal ownership is transferred from the seller to the buyer. It involves the exchange of funds, keys, and legal documents. On the completion date, the buyer takes possession of the property, and the seller receives the agreed-upon payment.
Disbursements
Disbursements are additional costs incurred during the conveyancing process that are not directly related to the estate agent's fees. These expenses include search fees, Land Registry fees, stamp duty, and other legal expenses. It's important to be aware of potential disbursements as they can significantly impact the overall cost of buying or selling a property.
Mortgage in Principle
A mortgage in principle, also known as a decision in principle or agreement in principle, is a statement from a lender confirming that, based on an initial assessment, they would be willing to lend you a certain amount of money. It gives you an idea of how much you can borrow, which helps when making an offer on a property.
Exchange of Contracts
The exchange of contracts is a significant milestone in the property buying process. It occurs when both the buyer and seller have signed identical copies of the contract and their solicitors swap these contracts. Once exchanged, the agreement becomes legally binding, and neither party can back out without facing financial penalties.
Vendor
A vendor is the term used to refer to the person or entity selling a property. It could be an individual homeowner, a property developer, or a company. Understanding this term helps clarify the roles of the parties involved in a property transaction.
Open House
An open house is an event organized by an estate agent where multiple potential buyers are invited to view a property within a designated time frame. It allows for efficient and convenient viewing opportunities for prospective buyers, particularly in a competitive market. Open houses are typically advertised in advance to attract a larger pool of interested buyers.
Survey
A property survey is an assessment of a property's condition conducted by a qualified surveyor. It helps identify any structural issues, defects, or potential problems that may affect the property's value or require repairs. Surveys can range from basic home condition surveys to more detailed building surveys, depending on the level of inspection needed.