OC Sales Progression :: Terminology

Terminology

Chain - This is when more than one property is involved in the transaction. For example:
Mr A is a first time buyer and is buying 1 High Street from Mr B, who is buying 2 High Street from Mr C, who is not buying another property. Here there are 2 properties in the chain.

Completion Date - The date when the sale/purchase has reached a successful conclusion and each party will move house.

Contract - Legally binding agreement between the seller and buyer, specifying the details of the house sale/purchase.

Conveyance or Transfer - The legally binding document that transfers the rights and the benefits of land to the new owner.

Council for Licensed Conveyancers - A regulatory body for Conveyancing with whom all conveyancers should be registered.

Deeds - Legal title document which provides historical information about the property.

Deposit - This is the amount paid at exchange of contracts, which is only refundable in exceptional circumstances. The deposit is often 10% of the purchase/sale price although this can differ.

Disbursements: Expenses paid by the Solicitor / Licensed Conveyancer on the buyers behalf such as land registry charges and search fees.

Draft Contract - The seller’s lawyer will prepare and send the draft contract to the buyer’s lawyer along with the title deeds and any other relevant documentation.

Enquiries - Preliminary enquiries are raised to the seller’s lawyer which will include any related matters about the property. Once these are received by the buyer’s lawyer, they may decide to raise further enquiries if more information is required.

Exchange of contract - When all the formalities have been completed and the seller and buyer have signed the contract, exchange of contracts will take place and the transaction is legally binding. The deposit is paid by the buyer at this point and the completion date is set.

Fixtures and Fittings - A list of the items at the property, which are either included or excluded from the agreed price.

Freehold: One of the two current tenures of land recognised by English law. This recognises the whole of the land not just a building. This usually relates to a house as apposed to a flat.

FSA - The financial Services Authority is an independent government body concerned with consumer protection in the financial market.

Gazumping - When the house seller accepts a higher price offer from another buyer after already accepting an offer from an initial buyer.

Gazundering - When the house buyer lowers his/her offer after the sale has been agreed.

Indemnity insurance - A policy taken out by the conveyancing firms to cover losses to clients arising from errors or fraud in dealing with their matters.

Land Registry - The official body responsible for recording the ownership of land. Fees will be paid by the conveyancing lawyer on behalf of the buyer to record the new ownership.

Leasehold - The second current tenure of land recognised by English law. This is over a term of years and not forever. There will be a landlord who will own the freehold. This usually relates to a flat or apartment.

Licensed Conveyancer - A Licensed Conveyancer is a specialist property lawyer, someone who is trained and qualified in all aspects of the law dealing with property. Licensed conveyancers are sufficient to secure adequate protection for consumers and that the conveyancing services provided by such persons are provided both economically and efficiently.

Memorandum of Sale - This outlines the sale/purchase property, the seller’s information and the buyer’s information, it is produced by the estate agent, acting for the seller. A copy is sent to both parties and their solictors.

Mortgage Deed - The legal agreement that gives the lender a legal right to property.

Mortgage - A loan to help you buy your house. The loan is secured on the property to prevent you selling the property without paying it off at the same time.

Searches - A method of checking matters that may affect the value of the property. The only obligatory one before exchange is a Local Authority Search which covers items such as road maintenance, planning applications etc. The search covers the property not the surrounding area.

Stamp duty - A government tax payable by every home buyer of a property over £125k. Duty is charged at 1% for homes priced between £125k and £250k. The rate is 3% for homes over £250k but not more than £500k. For homes over £500k the rate is 4%.

Structural survey - A survey giving details about the building and its integrity.

Subject to contract - A provisional agreement between the house buyer and the house seller that is not legally binding.

Transfer document - The final document that transfers the property from the house seller to the house buyer.

Valuation Survey - A survey to allow a property value to be determined for mortgage purposes. If a mortgage is not required a buyer can arrange for a private valuation survey to be carried out for peace of mind. This is not to be confused with a structural survey.