The world of property sales can often seem like a labyrinth of complex terms and jargon. Navigating through this linguistic maze is crucial for both seasoned homeowners and first-time buyers.
Eve Wilson, Head of our Residential Property team, has put together a quick guide that sheds light on the terms commonly encountered during house sales.
And if you want to understand not just the language but the processes involved in moving home, we have produced a handy video which you can see on our residential conveyancing page (just scroll down the page a bit, it’s called ‘What the Solicitors do’).
Freehold vs Leasehold
Freehold is when you own the property and the land it sits on outright. You have full control over both the building and the land. In contrast, leasehold means you own the property for a fixed period but not the land it stands on. The land is typically owned by a third party, and you may have to pay rent.
Conveyancing
The legal process of transferring property ownership is called conveyancing. It involves various steps, including property searches, reviewing contracts, and handling the exchange of funds.
Completion
The completion date is when the property officially changes ownership. On this day, the buyer pays the remaining balance, and the keys are handed over.
Chain
A property chain is formed when multiple buyers and sellers are linked because each transaction depends on the success of the previous and subsequent ones. Chain-free transactions are generally more straightforward.
Chain Break
When a property sale falls through, it breaks the chain. This can happen for various reasons, such as financing issues or a change of heart by one of the parties involved.
Gazumping and Gazundering
- Gazumping: Occurs when a seller accepts a higher offer from another buyer after already agreeing on a lower one.
- Gazundering: Happens when a buyer reduces their offer just before the exchange of contracts.
Exchange of Contracts
The point in the process where the buyer and seller exchange signed contracts, legally committing to the transaction. At this stage, the buyer usually pays a deposit.
Survey
A survey is an inspection of the property’s condition, and it can range from a basic valuation to a more detailed structural survey.
EPC (Energy Performance Certificate)
A document providing information about a property’s energy efficiency. It includes recommendations to improve energy performance.
Stamp Duty
A tax paid by the buyer on properties over a certain value. The rates vary depending on the property price and whether it is a first-time purchase.
Retention
The buyer’s solicitor retains a sum of money until the seller addresses certain issues, like repairs.
Title Deeds
Legal documents proving ownership of a property. In modern transactions, these are often held electronically by the Land Registry.
Redemption Statement
A document from the seller’s mortgage lender detailing the amount needed to pay the mortgage in full.
Covenant
A legal obligation or restriction related to the use of the property is often outlined in the property’s deeds.
Land Registry
A government office is responsible for maintaining a public register of properties in England and Wales, providing details of ownership and any charges on the property.
Understanding the terminology associated with house sales will help you to make informed decisions and ensures a smoother and more transparent property transaction process.