Buying Jargon Buster

Home Buying Terminology Explained

A: This is an evaluation of the property carried out by the selling agent, who will then advise in their estimation the current market value of the property. This is also known as a valuation.

A: The vendor is the owner of the property.

A: The vendor has complete ownership of the land on which the property is built.

A: Possession of the land is subject to an annual fee/ground rent which is paid to the owner of the freehold. A leasehold property is normally a flat, although in some areas houses and bungalows of leasehold tenure exist.

A: The term vacant possession means that the previous occupants must vacate the property before the buyer moves in, including any tenants that may have been staying at the property.

A: Conveyancing is the legal process that is carried out when transferring the ownership of a property from the vendor to the purchaser.

A: A contract is a document that is entered into by both the vendor and the purchaser which then becomes legally binding upon exchange of contracts.

A: Usually there are two separate costs incurred by a sale, the estate agency fee and the legal fees for the conveyance.

A: Stamp Duty is a government tax which is payable only by the Buyer once the purchase is complete. Your solicitor will deal with this tax on your behalf.

A: If a property is sold subject to contract, this means that the vendor has accepted an offer from a prospective purchaser but the solicitors have not agreed the contracts at this stage and are not in a position to exchange contracts.

A: Exchange is the point at which your sale/purchase becomes legally binding, and neither party can pull out without incurring serious penalties.

Completion is the point at which the property title transfers to the new owner in law. All outstanding monies are paid to the vendor and the property is now owned by the purchaser. A date for completion is fixed at the time of the exchange of contracts, this can be any time after exchange (it can even be simultaneous with the exchange if necessary) and will occur at a date mutually agreed between purchaser and vendor. On the day, completion will usually take place late morning/early afternoon. At this time funds need to clear through the banking system. Once cleared funds are received by the vendor’s solicitor completion has occurred and the buyer can collect the keys to their new home.

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