Real Estate Dictionary Terms

A.

Assignment – the transfer to another of a right, interest or title to property (this can include for example a lease, insurance policy etc).

Auction – the sale of a property to the highest bidder.

B.

Building Survey (prev. a Full Structural Survey) – a complete inspection of the property to be purchased, conducted by a fully qualified Chartered Surveyor (and any other professionals he may deem appropriate such as electrician, plumber, structural engineer), usually paid for by the purchaser. A detailed report is then written and sent to the purchaser. Recommended for any property, especially older properties which have been poorly maintained, extensively altered or extended and also for any property which you may wish to alter or extend.

C.

Chain – refers to the number of property sales linked together by onward purchases, reliant on the proceeds of the sale, to complete on that purchase.

Completion Date – the date when a property is transferred to the buyer when the balance of the purchase price is handed over to the seller’s solicitor and the seller must vacate the property.

Conditions of sale – details that determine the rights and duties of the buyer and the seller.

Contract – a legally binding agreement between the parties which sets out the terms of the sale, and once signed completes the transaction.

Conveyancer – a qualified individual such as a lawyer or conveyancer who deals with the legal aspects of buying and/or selling a property.

Conveyancing – term given to the legal process of buying and/or selling property.

Covenants – obligations and restrictions relating to a property.

D.

Deposit – a percentage of the purchase price – usually 10% - paid by the buyer at the Pre-Contract stage.

Dilapidations – any disrepair or damage to a rented property.

Disbursements – fees paid by the lawyer on a purchaser/vendor’s behalf such as Transfer Tax, Land Registry Fees, Notary fees, search fees etc.

Discharge – paying off a mortgage.

Draft Contract – preliminary, unconfirmed version of the contract, usually drawn up by the seller’s solicitor and sent to the buyer’s solicitor for approval.

E.

Equity – the difference between the sum achieved for the sale of the property and the outstanding mortgage.

Energy Certificate - Indicates how energy efficient a home is. The Certificate is issued by the vendors’ chosen engineer and forms an integral part of the final contracs.

F.

Fixtures and Fittings – any non structural items contained within the property such as door handles, light fittings, built-in cupboards etc.

Freehold – term referring to the ownership of the property and the ground on which it is built, without the limitation of time.

G.

Gazumping – occurs when a vendor accepts a higher offer from a third party after having agreed a sale initially with someone else before the pre contract stage.

Gazundering – usually occurs on the day of contract and is when a buyer re-offers at a lower purchase figure than is agreed on the contract, in order to force the purchase price down.

I.

Inventory – a list which details the contents and describes the condition of furnishings, decoration and contents of a leased property at the start and end of a tenancy in order that any dilapidations may be assessed.

L.

Land Registry Fee – fee paid to the Land Registry to register the ownership of a property.

Lease – a legal document by which the freeholder or landlord of a property lets the premises – or part of it – to another party for a specific length of time, after which point ownership may revert to the freeholder or superior leaseholder.

Leasehold – denotes that tenure of a property is by way of a lease.

Listed Building – a building registered as being as of specific architectural or historic importance, which cannot be demolished nor have its external and in some listings, interiors altered without special permission from the local Listed Buildings Officer and possibly English Heritage.

Local Authority Search – an investigation undertaken by a purchasing lawyer, whereby a search of local authority and other agencies is carried out in order to identify any circumstances which may ultimately affect the sale.

M.

Maintenance Charge (or Service Charge) – payment levied by a management company with responsibility for the repair and upkeep of external and internal areas of a building or scheme commonly used by the residents, charged to the owners or leaseholders of individual properties contained within.

Mortgage – a sum of money advanced by a lender, usually a bank or building society, to assist in the purchase of a property. The loan is secured against the property and is usually taken out over a number of years.

Mortgage Deed – a legal document relating to the mortgage lender’s financial interest in the property and containing the terms by which the loan has been agreed.

Mortgage Offer – a formal document drawn up by a mortgage lender detailing the terms by which the loan is agreed.

Mortgage Term – the period of time over which mortgage repayments are made.

N.

Negative Equity – is the term applied when the amount of the mortgage owed is higher than the market value of the property.

Notary Public - The professional who ultimately draws up the contracts for the transaction, and is responsible for the legality of any documentation, and registration of the contracts with the relevant govt departments

O.

Offer – a suggestion of a sum of money put forward by a potential purchaser for consideration by the owner, for the purchase of an individual property. Can also be used to refer to a mortgage offer.

P.

Pre Contract - The stage at which the sale is agreed and any special conditions are noted, a deposit exchanges hands, and the subsequent transaction is legally binding.

Preliminary Enquiries – initial questions about an agreed property sale, raised by a purchasing lawyer on behalf of his client, asked of the seller’s lawyer, which the seller must answer.

Property Information Form – form that is completed by the seller giving answers to questions raised on the buyer’s behalf.

Premium Lease – lump sum paid up front as rental payment for a property, rather than staged payments throughout the term of the rental period.

R.

Repossession – occurs when a mortgage company obtains a court order to take possession of a property due to non payment of the mortgage.

Retention – a sum of money held back by the mortgage company until such time as repairs or remedial works are satisfactorily carried out to the property they have loaned on.

S.

Search – numerous searches concerning the property and its locality are made by the buyer’s lawyer during the purchasing process; these include a Local Authority Search, Land Registry Search, Water Search, Registration Search, Mortgage Registry Search etc. The buyer’s lawyer will decide which searches are appropriate according to the location/age of the property concerned.

Subject to Contract – words used to indicate that an agreement is not yet legally binding.

Surveyor (Chartered) – professionally qualified expert who carries out property inspections.

T.

Tenancy – temporary possession of a property by a tenant.

Tenancy Agreement – legal agreement designed to protect the rights of both tenant and landlord setting out the terms under which the rental of a property has been agreed.

Tenant – the person who has temporary use and possession of a property owned by another person, the landlord. The duration and terms of a tenancy are usually fixed by a lease or tenancy agreement.

Tenure – describes the manner in which the property is held by the owner i.e. either Freehold or Leasehold.

Title Deeds – documents evidencing ownership and extent of a property, also sets out any rights or obligations that affect the property, also show whether there are any mortgages on the property. Title Deeds will be held by the mortgage lender until such time as the mortgage has been redeemed.

Transfer Tax – A tax paid direct to the govt, by the purchaser, based on the contract value of the transaction

Transfer Deed – The document that transfers the ownership of the property from the seller to the buyer. The Land Registry will require this document before the change of ownership can be recorded.

U.

Under Offer – term applied to the sale of a property once an offer has been made by a potential purchaser and which has been accepted by the owner, prior to exchange.

V.

Valuation – an assessment of a property’s market value carried out by a recognised professional on behalf of a lender and/or the buyer, backed up with comparable evidence from recent sales of similar properties in similar locations.

Vendor – term used to describe the owner of a property which is being sold.

Y.

Yield – income from a property calculated as a percentage of its value