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Email: enquiries@apmorgan.co.uk
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Property Search

Agreement in principle (AIP)

AIP is a certificate or a form usually approved by a lender/building society, stating the maximum amount of money that a property buyer can borrow. A mortgage consultant can provide an AIP before they actually submit the mortgage application. Estate Agents usually ask the potential buyers to show them AIP certificate prior to arranging viewings.

Applicant

A term used by estate agents for potential property buyers or potential tenants who register their details with estate agents while looking for a property.

Annual percentage rate (APR)

APR is the total cost of a loan to include arrangement fees, interest charges and all other costs. APR is shown as a percentage rate and is easily comparable with the mortgage interest rates.

Arrangement fees

It is a broker’s or a lender’s charge to arrange a loan on certain products. It is typically applied to loans where a special interest rate applies e.g. fixed or capped rates.

Auction

The sale of a property to the highest bidder.

Bridging loan

A short term loan commonly used to cover or ‘bridge’ the overlap between the purchase of a new property and the sale of an old one.

Buy to let mortgage

A type of mortgage explicitly intended for investors/landlords buying a property with the intention of letting it out.

Capital

The total amount of the loan on which interest is calculated.

Chain

The situation that occurs when a buyer is reliant upon completion of the sale of their existing property in order to complete on the purchase of the new property, or when a sequence of buyers are each reliant upon the completion of the sale of their existing property in order to purchase a new property.

Commission

The estate agent’s fee for selling your property.

Common areas

Areas of land or buildings, such as gardens, hallways, recreational facilities and parking areas, where more than one resident shares access.

Completion date

The completion date is the day on which all transactions concerning the property’s sale are concluded and the money is transferred from the buyer’s to the seller’s solicitor. It is the date that the buyer becomes the legal owner of the new property.

Conditions of sale

The details that determine the rights and duties of the seller and buyer. These may be national, statutory or the Law Society’s conditions.

Contract

A legal agreement between the seller and buyer of a property, which binds both parties to complete the transaction.

Contract race

When two parties make an offer on the same house and both request and receive a contract to purchase. The vendor then sells to the first party to exchange the contracts, i.e. it's a race between the buyers!

Conveyancer

A qualified individual such as a solicitor or a licensed conveyancer who deals with the legal aspects of buying or selling a property.

Conveyancing

The legal process surrounding the transfer of ownership of a property from seller to buyer.

Covenants

Rules and regulations governing the property, contained in its Title Deeds or Lease.

Deeds

Legal title documents proving ownership of the land and/or building(s). The deeds will often be held by a mortgage lender.

Deposit

A sum of money (usually 10%) paid by the buyer on exchange of contracts. Buyer’s solicitor usually transfers this amount into the bank account of seller’s solicitor upon exchanging contracts.

Disbursements

Fees paid by the buyer's solicitor on behalf of the buyer; Such as stamp duty, land registry and search fees etc.

Down Valuation

An appraisal of the value of the property where the value is lower than the asking price or the agreed sale price.

Draft contract

Preliminary version of the contract.

Early redemption charge (ERC)

ERC is a charge made by the lender if the borrower terminates a mortgage in advance of the terms of the specific mortgage. It usually arises when the borrower has benefited from special discounted or reduced payments or cash back in the early period of a mortgage.

Easement

A right over the land of another for a specific purpose such as a drain or a cable etc.

Energy Performance Certificate (EPC)

An EPC measures the energy efficiency of a property using a scale of A-G. You and your estate agent must use all reasonable efforts to obtain the EPC within seven days of marketing beginning, and the EPC must be available no later than 28 days from marketing beginning.

Enquiries

The process of asking a question.

Enquiries before contract

Questions raised by a solicitor after the title and ownership of a property during the purchasing process and prior to the exchange of contracts.

Equity

The difference between the value of a property and the amount of mortgage owed.

Equity Release

When a new or larger mortgage is taken out to free some of the equity that has built up in your property

Estate Agency Act

An act of Parliament which regulates the sale of property.

Estate Agent

The person or company employed to sell a property.

Exchange of contracts

The point at which signed contracts are physically exchanged, legally binding the seller and buyer to the sale and purchase of a property at the agreed price.

Fixtures and fittings

All non-structural items agreed to be included in the purchase of a property. These items are found in a property and may or may not be attached to the property e.g. carpets, curtains, wall lights, fire places, kitchen fittings etc. In the sale a schedule will set out what is included and what is not.

Flying Freehold

Where a part of a ‘freehold’ property is built over part of another so that it does not touch the ground.

Freehold

Technical word used for the ownership of the land and/or property, meaning that it belongs to the owner without any limitation of time.

Gazumping

When a seller accepts a higher offer from a third party on a property that they have already agreed to sell to someone else prior to exchange of contracts.

Gazundering

When a buyer reduces their agreed offer prior to exchange of contracts.

Grant of probate/representation

An order of the Court that provides the executor the authority to administer a deceased person’s estate under a will.

Ground rent

The annual rent levied by the freeholder to the leaseholder.

Guarantor

The lender may sometimes require a borrower to appoint a guarantor. This is someone who promises to pay the borrowers debt if the borrower defaults.

Homebuyer’s survey

This is an inspection of a residential property by a Surveyor, carried out in a prescribed manner reporting all defects in the property and advising on its current value.

Inventory and or Schedule of Condition

This is a comprehensive list of all the contents of a building, also showing the condition of each room. This is usually done at both beginning and the end of a tenancy so that it can be determined whether a tenant is returning the property in a good a condition or not compared to the condition of property at the time when the tenancy started.

Joint Agency

When two estate agencies are marketing the same property for sale.

Land registration

The process of registering the legal title of an area of land with the Land Registry, typically handled by a solicitor.

Land registry fee

Paid to the Land Registry to register ownership of a property.

Landlord

A person who has a formal interest in property and is in possession of the property and who has rented it out or proposes to.

Lease

A legal document by which the Freehold (or Leasehold) owner of a property lets the premises or a part of it to another party for a specified length of time, after the expiry of which, ownership may revert to the Freeholder or superior Leaseholder.

Leasehold

Denotes that the ownership of the property is by way of a lease.

Letting Agent

The Letting Agent acts on behalf of a landlord of a property to let and/or manage their property.

Listed building

A building officially listed as being of special architectural or historic interest, which cannot be demolished or altered without (local) government consent.

Loan to value (LTV)

LTV is the size of the mortgage as a percentage of the property’s value.

Local authority consent

Planning Permission and Building Regulation proposals which are submitted to the local Authority for scrutiny and approval.

Local authority search

Procedure whereby a buyer’s solicitor checks with the local council regarding any outstanding enforcement or future development issues that might affect the property or immediate area.

Maintenance charge / Service charge

The cost of repairing and maintaining external or internal communal parts of a building charged to the tenant or leaseholder.

Management company

is responsible for the management of properties on behalf of the person or persons who have an interest in properties. They may collect rent and service charges and they may be responsible for the day to day running or maintenance of a property or of its shared parts.

Matrimonial Valuation

is the valuation of a property owned by a husband and wife following their separation or divorce and is used to calculate the interests of each.

Memorandum of Sale

A legal document usually produced by the estate agent, showing the parties to a sale of a property, the solicitors, the purchase price and any conditions.

Mortgage

An amount of money advanced by a lender such as a bank or a building society on the security of a property and repayable over a long period (typically 25 or 30 years).

Mortgage offer

Once a building society, bank or other lender has completed all of their investigations into the persons and property which are party to a mortgage application they will issue a form known as a mortgage offer which sets out the amount of mortgage they are prepared to lend and the terms and conditions attached. Only once the mortgage offer has been provided can exchange of contracts take place.

Multi Agency

When more than two estate agencies are marketing the same property for sale. Generally, the agent who sells the property gets the commission fee paid and the others get nothing.

Negative equity

A situation in which the value of a property has fallen to below the level of the loan secured on it.

No Chain / No Upward Chain / Chain Free

This indicates that the vendor of a property does not plan to buy another property when sold.

Offer

A sum of money that the buyer offers to pay for a property.

Preliminary enquiries

The initial enquiries about a property put forward to a seller which the seller must answer before the exchange of contracts.

Probate

This is the administration of deceased person's estate. The grant of probate by a court commits the executor to administer the estate in accordance with the will.

Property Misdescription Act

The Property Misdescriptions Act 1991 makes it an offence for an estate agent or for a property developer to make false or misleading statements in the course of their business, about any of 33 property related matters listed in the Property Misdescriptions (Specified Matters) Order 1992.

Purchaser

A person who is buying a property.

Redemption

When a mortgage is fully repaid.

Registered Title

is the description given to the title or details of ownership of property when it has been registered at the Land Registry Office (a government body sponsored with recording ownership of all property in the country). Where the title of the property is not registered it is regarded as Unregistered Title.

Re-mortgage

Refinancing a property by either switching a mortgage from one lender to another or by taking out a second mortgage to draw down any equity gained by a rise in property value.

Repayment mortgage

A mortgage repaid by way of monthly repayments of capital combined with interest over a set period of time.

Repossession

When the mortgage lender takes possession of a property due to non-payment of the mortgage.

Right of Way

is a right of access along a prescribed route across a property. The right should set out whether it is for the public or attached to a specific property or person and what restrictions there are to it, i.e. by person, vehicle or horse drawn carriage etc.

Roof report

This is a report into the condition and structural integrity of a roof and its cladding such as tiles, slate or felt.

Search

A request or enquiry for information concerning the property held by a local authority or by the land registry.

Seller

Someone who promotes or exchanges goods or services for money. In the estate agency, this term is used for person(s) selling a property or land through the agent.

Service charge

Please refer to ‘Maintenance Charge’.

Settlement

Please see ‘Subsidence’.

Shared Ownership

Where two or more persons have a similar interest in property. It includes the government sponsored scheme operated by Housing Associations where a person purchases half interest in a property paying a mortgage on this with the housing association owning the remainder of the interest and the first person may or may not pay a rent or interest on this part.

Sole Agency/Sole Selling Rights

Where an estate agent has exclusive rights to sell a property. Details are set out in the Estate Agency Act and the estate agent must serve notice in accordance with the act if it is that type of agency.

Sole agent

When only one estate agency is selling a property.

Solicitor

A legal expert handling all documentation for the sale or purchase of a property.

Stamp Duty Exempt

Some types of property purchases or transfer of land are exempt from Stamp Duty tax. The Government has designated certain areas and price ranges, where the buyer does not have to pay any Stamp Duty tax.

Structural survey

is a detailed survey of a building including its structure carried out by a qualified building surveyor or structural engineer.

Subject to contract

Words that confirm that an agreement is not yet legally binding and is subject to the parties signing the contract.

Subsidence

Ground movement which can result in cracking in structural walls. It can be caused by clay shrinkage, defective drains, trees, removal of trees and mining etc.

Survey

A survey of a building examines and reports on its overall condition.

Surveyor

A professional person qualified to estimate the value and condition of land and property.

Tenancy

A temporary possession of a property by a person (the tenant) for a period of time and who pays a rent.

Tenancy agreement

A legal agreement designed to protect the rights of the tenant and landlord and setting out all the terms and conditions of the rental arrangements.

Tenancy Deposit

A sum of money paid by a tenant at the start of tenancy and which is held by the landlord or the agent must lodge/register the deposit with a government backed Tenancy Deposit Scheme, against the tenant complying with the terms of the tenancy, i.e. paying the rent and leaving the property in a comparable condition at the end of the tenancy.

Tenancy Deposit Scheme (TDS)

An independent dispute-resolution service which is available to participating landlords, their agents, and tenants who are unable to resolve a dispute relating to the tenancy deposit at the end of the tenancy. From April 2007 all agents have had to join and all tenancy agreements from that date must be subject to it.

Tenant

A person who has temporary possession of a property by agreement and pays rent or consideration.

Tenure

Conditions on which a property is held i.e. length of lease.

Timber and damp proof reports

A detailed report into all of the timbers in a building including floor and roof timbers and also into the damp proof course. This report states whether there is any wood rot or wood worm in the timbers and whether the building has any rising damp due to defects in the damp proof course.

Timber and damp report

A report prepared by a specialist firm following a survey of a building. This report provides details of any damp in a building or wood rot or wood worm.

Title deeds

Documents showing the legal ownership of a property.

Title search

An investigation carried out by a conveyancer or solicitor into the history of ownership of a property. The search will check for liens, unpaid claims, restrictions or any other problems that may affect ownership.

Tracker rate

The interest rate which is set at a percentage above the Bank of England Base Rate for a period of time (i.e. the rate ‘tracks’ the base rate.)

Transfer deeds

The Land Registry document that transfers legal ownership from seller to buyer.

Under offer

The status of a property for sale when a seller has accepted an offer from a buyer, prior to exchange of contracts.

Underpinning

Method of strengthening weak foundations whereby a new, stronger foundation is placed beneath the original foundations.

Unproceedable Offer

An offer from a party who is not presently in a financial situation to proceed with the property purchase either because they have not been able to agree a mortgage in principle or have not sold a property.

Unregistered Title

The right of ownership (or title) of a property that has not been registered at the Land Registry (please refer to ‘Registered Title’)

Utility charges

This includes charges, rates or costs relating to Council tax, gas, electricity, telephone, water rates and oil etc.

Vacant possession

This term relates to the ownership of property and suggests that on completion of a sale, the property will be empty, i.e. will not be subject to any tenancy.

Vendor

The person who is selling a property (also known as ‘Seller’).

Yield

Income from a property calculated as a percentage of its value.

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