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Glossary of Terms
Below is the most common words and phrases you will come across when moving home.
A
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Advance |
Mortgage Loan |
| Auction |
The sale of a property to the highest bidder. |
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APR |
Annual Percentage Rate, the total cost of a loan, including all costs, interest charges and arrangement fees, shown as a percentage rate and easily comparable with mortgage interest rates. |
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| B |
Balance Outstanding |
The amount of loan owed at a particular time |
| Bridging Loan |
A temporary loan advanced to help buy a new property before the existing one has been sold. |
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Buildings Insurance |
Insurance against the cost of repair or rebuilding a property from scratch following structural damage,
for example by flood, fire or storm. |
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| C |
Chain |
A number of linked property sales where exchange of contracts must take place simultaneously. |
| Closing Date |
The date set for submission of offers when more than one party show interest in the property. |
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Completion Date
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Completion of the legal transaction with all monies and documents having been distributed. This is also when the seller's solicitor will instruct the estate agent to release the keys. |
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Conclusion
(Scotland Only) |
See under 'Subject to contracts exchanged' |
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Contents Insurance |
Insurance against accidental damage or theft of all moveable contents, including furniture, appliances and soft furnishings. |
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Contract |
A formal agreement between the buyer and the seller, usually prepared by a solicitor or licensed conveyancer, detailing the terms and conditions of the sale. |
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Conveyancer |
Person other than a solicitor who may conduct the conveyancing. |
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Conveyancing |
The legal work involved in buying and selling properties. |
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Council Tax |
Levied by local councils to cover the cost of local amenities and services. |
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Covenant |
A condition, contained within the Title Deeds or lease, that the buyer must comply with, which is usually applied to all future owners of the property. A restrictive covenant is one that prohibits the owner from doing something. |
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| D |
Deeds |
Legal documents assigning ownership of a property and/or land. |
| Deposit |
Sum of money that represents the personal capital that the buyer is putting toward the purchase of the property. |
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Disbursements |
Fees, such as Stamp Duty, Land Registry and search fees on top of conveyancing which you normally pay via your solicitor. |
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Draft Contract
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Unconfirmed version of the contract. |
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| E |
Early Repayment Charge |
A charge made by the lender if the borrower terminates a mortgage in advance of the terms of the particular mortgage. Normally occurs when the borrower has benefited from reduced payments or cash back in the early period of a mortgage. |
| Equity |
The difference between the value of a property and the amount of mortgage owed. |
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Exchange of Contracts |
The point at which the sale becomes legally binding from which neither party can withdraw without financial penalties - In Scotland see 'Missives Concluded'. |
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| F |
Fixtures and Fittings |
All non-structural items included in the purchase of a property. |
| FIMBRA |
Financial Intermediaries Managers & Brokers Regulatory Authority. |
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Fixed Price
(Scotland) |
Offers are invited at the price shown. |
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Freehold |
Ownership of the property and land upon which the property is situated. |
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Full Structural Survey |
A full structural survey looks at all the main features of the property, including walls, roof, foundations, plumbing, joinery, electrical wiring, drains, and garden. |
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| G |
Gazumping |
The practice by a seller accepting a higher price than that previously agreed with someone else. |
| Gazundering |
The practice by a buyer lowering his offer just before exchange of contracts. |
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Ground Rent |
The annual fee which a leaseholder pays to a freeholder. |
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| H |
Home Buyers Report |
The homebuyer's report comments on the structural condition of most parts of the property that are readily accessible, but does not involve in-depth investigation or the testing of water, drainage or heating systems. |
| Housing Association |
A non-profit making body which lets you buy a percentage of the property and pay rent on the rest. |
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Higher lending charge |
Required by some lenders if your loan is for more than a required percentage of the value of the house. Although the borrower pays the premium, the policy protects the lender not the borrower. |
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| I |
IFA |
Independent Financial Advisor |
| IMRO |
Investments Managers Regulatory Organisation. Regulates investment managers. |
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Instruction |
When a seller instructs an estate agent to market a property. |
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| J |
Joint Agency |
Where two estate agents work together to market a property. |
| Joint Mortgage |
A mortgage where there is more than one individual named responsible for the mortgage. |
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| L |
Land Certificate |
A Land Registry certificate proving ownership of property. |
| Land Registry |
The Government organisation that holds records of all registered properties in England and Wales. |
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LAUTRO |
Life Assurance Unit Trust Regulatory Organisation. |
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Leasehold |
To be given ownership of a property but not the land it is built on. This normally requires payment of ground rent to the landlord. A leasehold is normally offered for either 999 years, 99 years or shorter terms. |
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Local Authority Search |
An application made to the appropriate Local Authority requesting details of any planning or other matters which might affect the property being sold. |
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| M |
Maintenance Charge |
A charge made towards the upkeep of a leasehold property. |
Missives Concluded
(Scotland) |
See under ' Subject to Contract' |
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Mortgage deed |
A legal document relating to the mortgage lenders interest in the property. |
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Mortgage offer |
A formal written offer made by a bank or building society to lend an approved amount to purchase a property. |
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Multi-agency |
The selection of two or more estate agents to act on the seller's behalf, usually incurring a higher fee than if the sale is completed by a sole agency. |
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| N |
Negative Equity |
When the value of a property is less than the outstanding sum owed on a mortgage |
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| O |
Offer |
A bid made by a prospective buyer, this is not legally binding. |
| Offers Over |
Offers are invited above the price shown. |
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Ombudsman |
Independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies. |
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| P |
Part-possession |
The term used when a property is being sold, where a tenant has legal right of occupation. |
| Private Treaty |
The way in which most house sales are completed in England and Wales. |
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Property |
Your home or the property you wish to sell or buy. |
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| R |
Repayment Mortgage |
Monthly interest combined with capital repayment against the original sum borrowed. |
| Repossession |
When loans are in default the mortgage lender can repossess the property and sell it so they can repay the debt. |
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Retention |
Holding back part of a mortgage loan until repairs to the property are satisfactorily completed. |
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| S |
Sale Agreed |
A verbal agreement from the seller. |
| Searches |
Checks of local council records for planning applications and restrictions, etc. |
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Sole Agency |
The choice of a single estate agent to act on the seller's behalf, incurring a lower fee than multi-agency. |
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Solicitor |
Legal expert handling all documentation for the sale and purchase of a property. |
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Stamp Duty |
A tax paid to the Government by the buyer upon completion. |
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Subject to Contract |
Words used to indicate that an agreement is not yet legally Binding. |
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Subject to Conclusion of Missives (Scotland Only) |
Words used to indicate that an agreement is not yet legally binding. |
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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). |
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| T |
Tenants |
People living in a property owned by someone else. |
| Tender |
The process whereby the seller asks for written offers on a property usually with a set closing date. |
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Title |
The ultimate record of ownership of a property, the evidence of which is found in the title deeds. |
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Transfer Deeds |
The Land Registry document that transfers legal ownership from seller to buyer. |
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| U |
Under offer |
When the seller has accepted an offer on the property but contracts have not yet been exchanged. |
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| V |
Variable Interest Rate |
Rate of interest payment that fluctuates over time inline with general interest rates. |
| Vendor |
The legal name sometimes used to describe the seller of the property. |
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Verbal Offer |
Offer from prospective purchaser, not legally binding on either party. |
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| W |
Writ |
Mode of commencing legal proceedings. |
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| Y |
YOUR MOVE |
Estate agents. |
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| Z |
ZZZ |
Rest when your move is complete! |
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