Jargon Buster

Chain

This refers to succession of transactions and buyers and sellers involved in a house move. Thus if we were to sell your house to a buyer, who in turn had sold their house to another buyer, who in turn had sold to a First Time Buyer, there would be four people in the chain. All these links have to be continually checked during the transaction, otherwise should one link break at the end ie, the First Time Buyer pulls out because they cannot get a mortgage, then all of the sales will fall through.

Completion Date

This is the date that ownership of the property officially passes from the seller to the buyer. Upon Exchange of Contracts (see below) the seller and buyer will agree a suitable date for completion and notify their Solicitors. Thus you should leave all final arrangements, such as home removals, until such time as this date is fixed.

Conveyancing

This is the legal process where the ownership of the property is transferred from the seller to the buyer, carried out by a Solicitor or qualified Conveyancer (your Solicitor will have full details).

Deposit

This will be a sum of money which forms part of the purchase price. It is handed over to the sellers’ Solicitor upon Exchange of Contracts.

A deposit can be anything up to 10% of the selling price and is negotiated in advance. Your Solicitor will explain all implications, but you should be aware that if you pay a reduced deposit and fail to complete through no fault of the seller, you will be liable to make the deposit up to the full 10% and could be liable to further compensation to the seller through your failure to complete.

Disbursements

Solicitors make these payments to other people on your behalf, these include such things as Local Authority Searches, Official Searches and Stamp Duty.

Equity

This is the difference between the amount you owe on your mortgage and the current value of your property. Negative equity, on the other hand, is when your property (current market value) is worth less than your mortgage, making it hard and expensive to move.

Exchange of Contracts

After completing all the necessary work on your behalf, the Solicitors will undertake “Exchange of Contracts”, upon which a seller and buyer are now legally bound. The seller must sell and the buyer must buy at the price stated in the Contract. Before Exchange of Contracts occurs, either party can walk away from the transaction at any time.

Home Information Packs

A HIP is a set of documents that provides the buyer with key information on the property and must be provided by the seller or the seller's agent. It is a legal requirement to have a HIP and you can't market your property without one.

The HIP lets buyers see important information about the property at the start of the process, free of charge. This means there is less chance of buyers becoming aware of any surprises at the end of the process. The HIP can help reduce delays and extra expense to the buyer and seller. Full details are available on our website by clicking here

Freehold

If the property you purchase is Freehold, the property and the land the property stands on are owned by you.

Land Registry

Established in 1925, the Land Registry retains records of all sale transactions, who owns land and under what conditions.

Leasehold

A Leasehold property, most often a flat or apartment, involves temporary ownership of the property which stands on land owned by the Freeholder. When the Lease expires, ownership of the property returns to the Freeholder. Your Solicitor will be happy to explain full implications.

Local Authority

Search Is a search of the Local Land Charges Register for the property being sold. A search of the records held by the Local Authority on matters of interest to buyers is also carried out and this includes planning decisions and road building proposals. These searches are carried out by a Local Authority or personal search company on behalf of your Solicitor, a copy of this document must also be provided in any Home Information Pack.

Mortgage

This is the loan to help you pay for your home. The company which gives you a mortgage will hold your Deeds until you have paid off the mortgage or sold the property and paid off any outstanding monies.

Mortgage Deed

This gives the mortgage company a legal right over the property until the loan is repaid.

Property Information Questionnaire

This is a form completed for inclusion in a Home Information Pack. It provides a helpful checklist of simple information about a property buyers need to know before making any decision on the property. If you fail to disclose information or disclose inaccurate information about your property, it could give the buyer grounds for legal action against you. You should discuss this thoroughly with your Solicitor who will be happy to give you further advice.

Redemption

This is the final payment of a mortgage loan.

Stamp Duty

This is paid by the buyer for any property purchased over £125,000 (with the exception of certain areas where it is up to £150,000 due to disadvantaged area relief). (Currently the Stamp Duty limit has been raised to £175,000). If the property you are purchasing is between £125,000 and £250,000 you pay 1% of the purchase price, £250,001 to £500,000 is 3% and above £500,001 is 4%.

Subject to Contract

After a buyer makes an offer, the Estate Agent will check their finance to purchase the property, plus details of any chain which is involved. Once the Estate Agent has advised the owner that all these details are satisfactory and the buyer, in principle, is in a position to proceed, then an offer can be accepted and Solicitors instructed. The property is then sold, subject to contract. As stated previously, under “Exchange of Contracts”, under the current law of the land, a seller or buyer can withdraw from this agreed purchase at any stage up until Exchange.

Surveys

All surveys are covered on our website under “Buying a Home”. Briefly, it is the buyers’ responsibility to discover any physical defects before purchase, a survey will be a report carried out on your behalf. You will be required to have a mortgage valuation undertaken if you are taking out a mortgage, you should specifically note that this is not a survey, but merely satisfies the lender that the property is worth the amount of the loan.

If you wish to have a survey carried out specifically on your behalf, you can commission an RICS Homebuyer’s Report or a Building Survey. Again, full details of these surveys are available on this website.

Title Deeds

These documents are legal proof that the person selling the property owns it to sell. Secondly, it sets out any rights or obligations that affect the property. Most Deeds are held by the mortgage company, if appropriate, who may charge a fee to release them. Your Solicitor can advise you further.

Transfer Deed

This is the documentation that confirms, officially, the transfer of ownership of the property from the seller to the buyer. When the completion date is agreed, it is dated and forwarded to the Land Registry.