Whilst Halloween may have been and gone, for some people the terror lies within the property buying or selling process and the terminology involved. At Austin Gray, we believe in making the process as simple as possible, so we’ve broken down some of the property jargon you’re most likely to come across if you’re thinking of buying or selling a house.
Agreement in principle
An agreement in principle is a pre-qualifying document that states the approximate amount mortgage lenders are willing to provide, which put you in a stronger position when viewing properties as it reflects your intention and competency to buy a home.
If you are buying a house that is not a new build, it is often the case that the seller of the property will also be purchasing a property. This is what is known as a chain.
Similarly, if you are moving from a property you own, the new buyers of your property will be waiting for you to purchase and move into your new home.
You will often hear people refer to their date for completion. Completion is the final stage of the property buying process and means the property has been legally transferred into your ownership.
Exchange of contracts
The exchange of contracts is usually managed by your solicitor and is the point at which signed contracts, detailing agreed fixtures and fittings and dates for completion, are exchanged between the buyer and seller. This is a formal commitment for both parties to complete the process.
Fixed rate mortgage
A fixed rate mortgage means that the interest rate you pay on your mortgage will stay the same throughout the agreed length of the deal. These are commonly advertised as two, three and five-year fixed rates. After this period, you will need to look for another mortgage deal.
If you are buying a property described as freehold, this means that you own the entire property and its land outright, with no time limitations.
A homebuyer report or survey is different to the survey carried out as part of the mortgage process. This is a report that many homebuyers choose to pay for additionally, as it conducts a more thorough survey of structural components of a property, including assessments of damp proofing and insulation, faults or issues that require specialist attention and the condition of wood and timbers.
When you are buying the freehold of a property, your solicitor normally manages the process of land registry with the Land Registry government office. This concerns the ownership and rights attached to the land itself, as this will need to be transferred between owners.
If you are buying a property described as leasehold, this means that you own the property itself but not the surrounding land and, in most cases, the containing building. This often applies to flats, apartments and maisonettes, but in some cases can also apply to houses.
Stamp Duty Land Tax is a tax paid to the government in the form of a lump sum when purchasing a property. The amount of tax paid will depend on the value of the property you are purchasing, although the government have recently scrapped Stamp Duty for first time buyers purchasing a property worth up to £300,000.
A home valuation is a basic survey to estimate the value of a property, most often for mortgage purposes or if you’re looking to sell your home. You can read our recent blog about why these are important here.
The vendor is a term you may often come across within official documentation. This refers to the person selling the property.
At Austin Gray, we’re proud to have been serving Brighton and Hove for over forty years. If you’re looking for help understanding parts of the buying or selling process, get in touch with a member of our residential team today.
If you’d like to receive more property information like this directly to your inbox, why not sign up to receive our newsletter?