When buying or selling a property, there are many legal terms that we often take for granted. We thought these explanations might help if you are relatively new to it all.
Completion: The day you can move into the property if you are buying, and must move out if you are selling. The balance of the purchase price is also paid.
Deposit: A solicitor will say this is the proportion of the purchase price, usually 10%, which is paid over to the seller on exchange of contracts. House builders sometimes use the term to describe money paid to secure the right to buy a property being built. Banks and Building Societies call the deposit the difference between the purchase price and their mortgage.
Estate Agent: A firm that markets the property on behalf of the owner. They will advertise the property and arrange for prospective purchasers to view it. They charge the seller for this service, usually a percentage of the sale price.
Exchange of Contracts: Your solicitor will ensure this is carried out. Once contracts are exchanged, there is a legal contract for you to buy the property. You are now committed and if you withdraw you may have to pay a heavy financial penalty. The seller is also committed and also may have to pay a heavy financial penalty if they withdraw.
Fixtures and Fittings Form: A form completed by the sellers giving the purchaser more information about what is included in the sale of the building, for example, carpets, garden ornaments, fitted cupboards. Fixtures are assumed to be included but it’s always worth confirming. Fittings are not (eg curtains).
Gazumping: When a seller has accepted an offer from a buyer and is about to exchange contracts, but goes one to accept a higher offer.
Gazundering: Where just before exchange of contracts the purchaser demands a price reduction or they will not exchange.
Home Buyers Survey: A detailed survey, carried out by a surveyor, giving more information about the structure of a property than is supplied by the mortgage company in a simple valuation survey.
Land Registry: A government organisation that holds details of who owns registered property in England and Wales.
Land Registry Fee: The Land Registry charges for its services, which include giving information about the current registered owners of a property and registering new owners.
Local Authority Search: These are questions put to the Local Authority about plans they have for the area around the property. This will also reveal any planning consents for the property. This is done by submitting a form to the authority who reply on the standard form. The results will show, for example, whether there are plans to build roads or other developments nearby.
Mining Search: This search will show whether there are old mine workings under the property.
Mortgage: A long term loan to buy a home. It is repaid by monthly instalments over, typically, 25-30 years.
Mortgage Offer: An offer from a mortgage company saying how much they are willing to lend you. This must be in writing.
Property Information Form: A form completed by sellers giving more information about the property such as whether there are any neighbour disputes, what works have been undertaken at the property and boundary ownership.
Redemption Penalty: A charge made by a mortgage company if the mortgage is repaid early. The charge can amount to six months’ worth of mortgage payments or even more. Such high penalties usually only apply in the early years of mortgages that came with attractive discounts.
Stamp Duty: A tax paid to the government by purchasers on completion. The amount payable is based on the value of the property.
Survey: A report about the structure and condition of a property. Typically, the more expensive the report, the more detailed it will be, reflecting the time spent by the surveyor at the property.
Unregistered property: Some properties are not yet registered with the Land Registry and the old deeds are used to provide evidence of ownership. The conveyancing will involve the solicitors going through the old deeds for the property.
Valuation Report: The cheapest type of survey that does little more than give the surveyor‘s view of the value of the property.
If you have any questions about buying or selling a property, please give us a call on 0117 926 4121.