Selling Your House Glossary

Active

Simply put, when a property is active it means that it is open and available for sale on the market. This doesn’t necessarily mean that it isn’t receiving offers or views, but it means the seller is open to new offers and proposals. Active buyers, on the other hand, mean people who are committed to purchasing a property and are searching the market.

Agreement in Principle

This is a general estimate of how much you can borrow from a lender when applying for a mortgage. Sometimes written as AIP or a ‘mortgage in principle’, your advisor takes into account your credit history, income and deposit. This estimate can be used as proof of funds once your offer for a property has been accepted.

Arrangement Fee

An additional administration charge made by mortgage lenders for arranging and organising credit.

Annual Percentage Rate of Charge

Also known as APRC, this is the total rate of interest you’ll pay for the entire duration of your mortgage. Lower APRC’s usually mean a better rate, as it takes into account all the different costs that will influence your mortgage.

Buy-to-Let

This refers to – or represents – a property that has been bought for the purpose of letting it out to tenants, rather than the buyer living in it themselves. Some mortgage lenders specialise in offering loans tailored to those exclusively looking to buy-to-let, and the practice is generally seen as making an investment within property.

Buyer

Essentially what it says on the tin, a buyer in real estate terms is a person who is buying a house, flat or some kind of property.

Break Clause

A Break Clause is a term in property law that is a written, explicit right that anyone within a lease contract can terminate it at a certain point. This can mean that tenants, landlords or both can stop the lease at a determined time or on a ‘rolling break’, which lets the person in question step away at any time during the lease’s term. These conditions are likely suited to tenants who prefer flexible leases, as opposed to a fixed-term tenancy.

Blank Canvas

In interiors, a Blank Canvas is a property that comes completely unfurnished. Usually landlords will advertise their rentals as to whether they come with fixtures such as appliances, sofas and other additions.

BMV

This stands for ‘Below Market Value’, which means that residential properties are available for sale at a price below their actual market value. Usually, this means that the seller is keen to sell their property to prospective buyers in order to secure a quick sale. The benefits mean a smoother, faster process for the owner and a cheaper option for the buyer. For more information on property valuations, JonSimon is here to help.

Cash Purchases

Also known as a cash sale or cash buyer, this is a purchase from someone who can buy the property immediately with money they have on hand. This means they don’t have to take out a loan or apply for a mortgage to secure the home, but they must have the cash fund available at the time of making an offer to be considered.

Covenant

This is a responsibility for homeowners found within the title deeds to a property. Covenants can stop the owner from doing certain things to the property, such as keeping boundaries, or prohibit the property from being used for another purpose.

Contract

This is the document that details the agreement between the buyer purchasing the property and the seller. This contract will set out the terms of the sale and should feature the Law Society’s Standard Conditions of Sale within the body of the draft.

Compulsory Purchase Order (CPO)

This is a legal order that allows local authorities that wish to acquire property or land the ability to do so without the permission of the owner.

Completion Date

This is the agreed date that sees all aspects of the property transaction finished, meaning the ownership is officially transferred from the seller to the buyer – completing the sale!

Chain

These are premises on the property market that are ‘chained’ together during the process of moving. Each buyer and seller are connected by whether the sale or purchase of a property is successful: if one moves out, another can purchase that home and move in, freeing up their own. Chains can vary in length, and they depend on whether the exchange of contracts happens at the same time.

Chain Free

As the name suggests, this is when the buying or selling process is not affected by other people exchanging contracts at the same time.

Collateral

Collateral is a property or asset that a person or entity, such as a business, offers to a mortgage lender as security for a loan. It’s used as a way to guarantee that a loan is protected against potential loss or possible default, should the borrower become unable to pay. If this happens, the collateral in question will belong to the lender as compensation on unreturned borrowed money. Depending on how long payments are left unmade, a repossession process may start if the lender takes court action.

Declaration of Trust

This is a document that notes who will receive the money from a property sale and in what measures, once the sale is finalised. This document will usually be handled by a solicitor and can also be known as a Deed of Trust.

Deeds

A deed is a formal, written document that confirms an interest, right or passage of property to a person who will take on any binding obligations, which essentially, confirms ownership. Deeds need more than a signature, as they can be enforced without further consideration and typically last twelve years – although it is six years for claims for arrears of rent or arrears of interest under a mortgage.

Default

A default (or to default) on a pre-arranged mortgage is when a person fails to repay, or makes smaller repayments than originally agreed, to the lender. Before a mortgage officially goes into default, the lender will usually get in touch to issue a notice following missed payments spanning between three and six months. This can also be termed as ‘arrears on mortgage payments,’ which can have repercussions, as defaults can reduce people’s chances of securing credit, raise interest rates on existing loans and lower credit scores.

Deposit

This is a lump sum of money put down by the seller usually at the request of a landlord or agent at the beginning of a tenancy. Deposits are used as security against possible property damage or rent non-payments, but it’s important to note that rent paid in advance is not classed as a deposit.

Energy Performance Certificate (EPC)

EPCs are a method of measuring how efficient a property is in terms of energy usage, which marks them on a scale of A, which is the most effective, all the way to G.  Usually the most efficient houses will yield the cheapest energy, and UK homes rank variably. They are a legal requirement for a building to be let, built or sold and are valid for ten years, having been first introduced in 2007.

Estate Agent Fees

Estate agencies charge a fee that covers the cost of their services, which may involve the listing of a property, expert valuations, dispensing advice and more. They are required to tell you by law what is included as part of this fee and issue a breakdown of costs, which is normally due on completion. An agent may charge upfront, but each agency will notify clients when fees should be paid.

Exchange of Contracts

The exchange of contracts is when a transaction involving a property becomes legally binding, and both the buyer and seller are contractually required to finish the purchase on the agreed date of completion. If either party decided to pull out at this point after the entire process, it wouldn’t be without financial penalties.

Early Repayment Charge (ERC)

This is a charge paid by a person borrowing from a mortgage broker when they choose to pay their loan off earlier than the agreed term. This can also be known as an Early Repayment Penalty.

Easement

This is where a landowner has usage rights on a section of land, near their own, for their own benefit.

First-Time Buyers

The classic definition of a first-time buyer is ‘a person buying a house or flat who has not previously owned a home – and therefore has no property to sell.’ But anyone who is applying for a mortgage who isn’t a homeowner, buy-to-let investing or planning to remortgage is also broadly classed as a first-time buyer – although the Government requires you to have never owned a property before to qualify for tax benefits.

Freehold

When someone owns a property outright, including the land it is built on, it is termed as a freehold. Those who own freeholds are responsible for looking after the land and any property it entails.

Flying Freehold

This occurs when part of the property in question lies under or hangs over another person’s land or residence. Some common examples include: balconies that lean over the property next door, basements that go beneath the neighbouring home, rooms above shared passageways and unequal dividing lines between houses.

Fixtures and Fittings

Fittings (also known as chattels) are items that aren’t permanently attached to a property – usually held in place by glue, nails or screws – and can be removed if needed. These are not typically passed on to the next buyer of the house unless the seller makes an exception. In contrast, fixtures are items that form part of the property that cannot be removed and, as a result, come with the residence once the sale has been completed. Fittings are usually items such as carpets, blinds, decorative items, ovens, lamps and appliances such as washing machines and refrigerators, while fixtures are television aerials, electric sockets, light fixtures, security systems and built-in furniture such as fitted wardrobes.

Fixed Price

When a house is put on the market at a Fixed Price, this means the seller is hoping to attract offers at the price as advertised. This is a popular choice for properties that have been on the market for a few weeks with little movement, as it infers that the asking price will not rise above that limit. No offers will be accepted unless it meets or exceeds the fixed price.

Gazumping

This is one of the stranger terms within property vocabulary, which describes a situation where a person is pushed out of a purchase thanks to another party making a higher offer. While unpleasant, it isn’t an illegal occurrence. Although two parties may accept an offer on a property, nothing is set in stone until contracts are exchanged.

Gazundering

Often mixed up with its similarly strange sibling, Gazundering happens when a buyer chooses to lower their proposed offer just before contracts are exchanged. Although it may seem unfair, this is also a legal practise.

Ground Rent

In England and Wales, this is a yearly amount paid by a leaseholder to the landlord or freeholder of a property. This rent can differ from lease to lease, and rates can be fixed or escalated depending on the agreement.

Guarantor

This is a person who agrees to sign documentation guaranteeing the repayment of a loan or debt on behalf of the borrower should they not be able to repay as per the terms laid out in the lending agreement.

House in Multiple Occupation (HMO)

Simply put, an HMO is a residential property that has multiple tenants living together at once. Properties termed under such are regulated under different conditions than normal rental properties and must fall into one of the following sections: a building or flat in which two households share a basic amenity, a converted building that does not entirely comprise of self-contained flats, a converted block of flats that does not meet the relevant standards and, finally, a building declared a HMO by the local authority.

Home Buyers Report

This is a document that covers the conditions regarding structures in the main areas of a property. It’s a survey best suited for conventional properties in a reasonable condition, increasing in price depending on the home’s value. This report helps owners find problems such as damp, structural issues or subsidence, but it does not look beyond the walls or under the floorboards.

Interest Rate

An interest rate is a percentage charge added to the total amount paid back on a loan. Any changes in interest rates can influence the amount that is repaid in total – especially if it rises – as it means you will be paying back the entire loan plus the new value of interest on top. Interest is charged similarly to a hire cost, which comes with borrowing from a mortgage broker or loan provider.

Instruction

This essentially means what it implies: that a seller has told an estate or lettings agent to list their property on the housing market. The same term also applies to conveyancing solicitors and legal advisers, in relation to someone carrying out parts of the transaction on their behalf.

Indemnity Policy

This is a term relating to a particular insurance policy that protects a buyer or their mortgage broker while in the process of buying property. These policies cover a number of potential surprises, such as small repairs that must be fixed before the sale resumes, or larger issues such as work carried out without permission or problems found in the deeds. The premium only needs to be paid once after the transaction goes ahead.

Inventory

An inventory lists the entire contents of a property, including its structural state and condition. This is  usually found in Assured Shorthold Tenancies, often used as a tool by landlords to mark how much of a deposit will be returned at the end of the tenancy.

Joint Tenancy

The identifying factor of a joint tenancy is that a property is equally owned between two people. Usually found when couples or relatives choose to buy a residential space together, it can be a good choice as it streamlines beneficial ownership. There may also be fewer legal fees thanks to a simpler process and less documentation needed.

Joint Agency

In a similar principle to a Joint Tenancy, this is where two estate agents work together to sell a property. This may work to secure a quick sale on behalf of a client or ensure that a particular residence, such as a premium listing, gets sold.

Joint Mortgage

In theory, a Joint Mortgage is exactly like a regular mortgage – except that it is in the name of two or more people. This is useful for people wishing to share a mortgage with their partners, family members or anyone who is assisting in buying a property. It is also used when more than one person wishes to purchase a location for their business, and it isn’t necessarily limited to just two people. Some brokers may offer mortgages for up to four people looking to enter a joint venture, meaning that a larger amount of money could be borrowed.

Kicked Out

Getting kicked out is more formally known as getting evicted. Started with an ‘Eviction Notice’, this is a communication from a landlord that marks the first step in ending someone’s tenancy. Eviction is a legal process that must be adhered to – it is usually made up of three stages in regard to private rentals: notice, court action and eviction by bailiffs. There are different procedures to follow depending on the type of tenancy, including assured shorthold, excluded tenancies and licenses, and regulated tenancies. 

Leasehold

A leasehold is the occupation of a property by way of a lease agreement, usually for a predetermined span of time. Such an agreement doesn’t only apply to flats but houses and can last for 99 years or more. You own the property for this length of time, but not the land (although you may be responsible for its maintenance). Ownership returns to the freeholder at the end of this lease.

Land Registry

The Land Registry is a non-ministerial department of the UK Government, responsible for registering the ownership of land and property in England and Wales. Any charges against the property, such as mortgages, are also recorded.

Land Registry Fee

Now you know about the Land Registry, we must inform you that there is also a Land Registry Fee. This is a simple fee charged by the Land Registry to record the change in ownership of a given property.

Letting Agent

A letting agent works for the landlord of a property to find a suitable tenant. We, at JonSimon, are one of many proficient letting agencies in the country, where we draft property particulars, market a property, conduct viewings and deal with the formalities of drafting a tenancy agreement.

Listed Buildings

If you’re looking to sell your house and are perusing the market, you might come across a listed building. Listed buildings have special cultural, architectural or historical interest; they (almost always) carry certain restrictions and obligations with them that oversee its careful use, restoration and maintenance.

Local Authority Search

Here, a buyer’s conveyancer will make a formal enquiry to the local authority, requesting to find out if there are any matters of importance affecting the property that is being purchased. These can include listed building status, financial charges against the property, tree preservation orders or conditional planning permissions.

Maisonette

The housing market also includes maisonettes – a term you might have never encountered before, a maisonette is a two-storey flat with its own private entrance. Here, the front door is your own, meaning you can exit your house directly, as opposed to a regular apartment where you share a corridor/exit.

Mortgage

A mortgage is an agreement between you and a lender, usually your chosen bank or building society, that gives the lender the right to take your property if you fail to repay the money borrowed. Mortgage loans give many the opportunity to buy a home for themselves. You may also encounter a mortgage valuation, mortgage offer and mortgage broker in your effort to secure the right mortgage for your home.

Maintenance Charge

A maintenance charge is dispensed for the upkeep of a leasehold property. This is most evident in blocks of flats or apartments, and the charge is distributed to the number of units within.

Multiple Agent Instructions

Sometimes, a seller or landlord will associate with multiple letting agencies or estate agencies and instruct several to offer a property for sale or rent.

Memorandum Of Sale

The memorandum of sale document confirms the key details of the sale, regarding the property, the buyer and the seller. It acts as a summary of the sale and can sometimes be known as a ‘Notification of Sale’. Issuing this document signifies to all parties that the property is no longer ‘Under Offer’ and has moved to the status ‘Sold STC’.

Negotiator

A negotiator is an individual, employed by an estate agent – like us! – who promotes and sells properties on the housing market. A negotiator will build a strong and trusting relationship with a client, only selling homes to whom they develop a close relationship with, and this distinguishes their role from the usual property agent.

Negative Equity

Negative equity occurs when the sale value of a property is less than the amount outstanding on the mortgage. To sell your house, you will need to pay the difference between the sale price and the balance on your loan. Here’s what you can do about negative equity if you find yourself struggling with this issue. As always, we at JonSimon are on hand to advise about any of your pressing mortgage FAQs!

NAEA Propertymark

The NAEA Propertymark, with its full moniker being the National Association of Estate Agents, is the UK’s leading professional body for estate agencies. Reputable estate agencies will always be associated with the NAEA as an MNAEA (Member of the National Association of Estate Agents). We at JonSimon have team members fully affiliated with the NAEA Propertymark.

Open House

Alternatively known as an open viewing, this is a process – managed by estate agents like JonSimon – where several prospective buyers are guided through a property over a period of a few hours or so, as opposed to a private viewing, where just one potential buyer will be shown the property.

Open Market Value

The open market value is the likely sale price of a property, in the situation that there is both a willing seller and a willing buyer, with a fair and reasonable period of marketing, advertisement and publicity without unique factors affecting the property.

Ombudsman

An ombudsman is one of many independent and free professional bodies who will investigate complaints against a given service – in this case, estate agents, insurance companies and the like! – in order to reach a fair and just resolution. Always contact the relevant ombudsman, such as The Property Ombudsman, if you feel misconduct is being carried out.

Offer (Over)

When Offer (Over) or ‘offers over’ are mentioned, it simply means that offers over the sale price advertised are invited. Many sellers might want offers in excess of the price advertised, in contrast to offers in the region of a guide price or offers below.

Part Exchange

Part exchange is where your current property is taken in as payment – whether part or whole – for a new property. This is often viable when buyers are seeking a new home in a different area (or improved location) and do not want a lengthy or drawn-out purchasing process.

Probate

Probate is the process of administering a dead person’s estate. If the deceased owned property as an asset, probate can involve a property sale, either handled by family members or a solicitor, in the event of a death. Often, when a property owner dies, their assets may be reviewed by a probate court: such a court provides the final ruling on the distribution of assets to beneficiaries.

Peppercorn Rent

Peppercorn rent is usually a very low sum of rent, or ground rent, relating to a leasehold property! Although peppercorn rent is exactly as it sounds – quite a little sum – it must be in effect for the lease to remain, and be, active.

Property Auctions

Property auctions are another viable way of selling a home. These sales are conducted at set times, by a qualified auctioneer, both online and at a physical location. Here, competing buyers bid openly over the properties they’d like and the highest offer wins! As soon as the auctioneer’s hammer hits the table, the purchase is as binding as any paper contract.

Property Agent

Property agent is just another name for estate agent! An estate agent arranges the sale, rent or management of various properties; taking the stress right out of the client’s hands. The responsibilities of a property agent involve advising clients throughout the purchase and sale process, which can include dispensing important information about market conditions and the like. Property agents may even conduct walkthroughs for your benefit!

Purchaser

Of course, a purchaser is the interested party who will be – or is currently in the midst of – buying a property.

Preliminary Enquiries

Generally, when a sale is agreed on, the buyer’s conveyancer will confer with the seller’s conveyancer and send across a list of questions about the property. This list often involves standard enquiries, such as whether any issues are present in the property, and are accepted as part of due diligence by a prospective buyer in a property transaction.

Repayment Mortgage

A repayment mortgage refers to monthly mortgage repayments, made of part accrued interest and part capital repayment. If repayments are made to date and on time, the mortgage amount will gradually decrease until repaid in full at the end of the mortgage term.

Retention

Retention involves withholding part of a purchase payment or mortgage loan until repairs to a property are completed to a suitable – or satisfactory – level. This is a step often conducted before a property is valuated, upon which a surveyor will point out pressing issues.

Repossession

If a mortgage is not paid over a certain period of time, a lender may repossess or ‘seize’ ownership of the property with the intention of selling it, to repay the standing debt of the loan.

Sole Agency

Sole agency is when a single estate agent works on a seller’s behalf, marketing and handling the sale of their property. Often, a sole agent establishes a close rapport with the seller, with the aim of finding a suitable buyer.

Sole Selling Rights

When an estate agency or representative is granted ‘sole selling rights’ by the seller of a property, they can claim an agreed fee regardless of who actually introduces the buyer to the property. In fact, sole selling rights are much the same as sole agency, but you have to pay the estate agent even if you find your own purchaser!

Stamp Duty

Stamp duty is a tax paid by the buyer of a property to the government. Stamp Duty Land Tax can vary in charge and cost, and rates are ‘banded’ progressively – much like income tax. Calculate the stamp duty that you will need to pay as a first-time homeowner or seasoned real estate buyer.

Survey

A major part of selling a home involves inspection, carried out by qualified surveyors. With three kinds of surveys available to us, a surveyor can conduct a Valuation Report for mortgage purposes, a Homebuyer Report to determine the good and safe condition of your property, or a Full Structural Survey, encompassing the structural integrity of your future home.

Solicitor

When selling your home or purchasing a new property, you will likely encounter a solicitor. A solicitor is a legal expert regulated by the Law Society, and an authority able to handle all of the legal aspects of buying or selling a property. The right solicitor will keep you regularly updated regarding the process of buying or selling your property and should be able to answer any questions you may have.

Sale Agreed

When the seller has verbally agreed to the purchase offer made by a buyer, this is when a sale is agreed!

Shared Ownership

Shared ownership is an accessible, affordable type of homeownership that occurs when a building contractor or housing association retains a percentage of a property. Here, the purchaser will take out a mortgage on a share of the property, paying rent to the given landlord on the remaining share. For example, if you purchase a 50% share, you’ll pay rent to a landlord on the remaining 50%.

Tenants

A tenant possesses a property, owned by a landlord, under the terms of a lease or tenancy agreement. As a tenant, you will likely enter into a tenancy agreement legally agreeing to certain terms that govern the occupation of a property. These arrangements are usually temporary but can last for a number of years.

Tenancy Deposit Scheme

A landlord must put the deposit of a tenant in a government-approved tenancy deposit scheme, and, if the property remains undamaged, this deposit must be returned within 10 days of both landlord and tenant agreeing how much will, and should, be returned.

Transfer Document

This is the final, legally binding document that transfers the rights of a property – and, indeed, the possession of the property – from the seller to the buyer.

Tender

Tender is when a seller invites written offers for a property, to be received by a predetermined closing date. This allows for a property to be sold with efficiency at a date most convenient to the seller.

Title Deeds

Title deeds are paper documents that detail and confirm the legal ownership of a property; they can include conveyances, contracts for sale and more. Bear in mind that a copy of your Title, found within the Title Deeds, which outline your legal ownership of land or a home, once registered, can be obtained from the Land Registry.

Tied Up

An informal way of saying that, yes, the seller has accepted your offer on a property. Although buying and selling a property can seem like a very serious and difficult process, there is some industry-specific lingo that is more informal, but helpful to remember. When a property is tied up, no other offers will be accepted.

Tenure

Tenure simply refers to the various ways of holding ownership over a property, such as through a freehold or leasehold. Having a freehold or leasehold tenure can affect the purchase price of the property and hold repercussions for sale – something to bear in mind!

Under Offer

When a property is ‘under offer’ it means that a purchase offer has been accepted by a seller, but formal contracts have yet to be exchanged. Legal contracts can take some time, and until the point at which the buying-and-selling process is formalised, a property will remain Under Offer.

Vendor

Vendor is a fancy way of referring to the seller of a property. Vendor is a term to look out for, as it may feature in much of your future documentation. When struggling to parse through terms such as this, JonSimon professionals are always on hand to help; a good estate agent, like us, will help you figure out the most confusing documents and processes.

Vendor Paid Deposit

Sometimes, a vendor will gift a certain amount of deposit to aid the purchaser. This enables a buyer to purchase a property where, otherwise, they may not have the means to. A vendor paid deposit can encourage eager homebuyers who do not have the required equity for larger loan-to-value mortgages, and there are no expectations on this deposit being returned.

Variable Interest Rate

The variable interest rate refers to the fact that the rate of interest payments will usually always fluctuate over time, in line with general interest rates. This holds significance for your mortgage; a mortgage with a variable interest rate is an adjustable-rate mortgage.

Valuation (Market Appraisal)

Valuation, otherwise known as market appraisal, is a term often used by estate agents – like us! – to summarise the process of our trained agents giving an opinion on the open market value of a property. We are trained in determining the open market value of many homes across Bury, Radcliffe, Ramsbottom and Burnley, with a clear idea of the eventual price of sale.