BUYING or selling a house is often a landmark event – representing the next step in life’s journey.
While this often an exciting time, it can also be stressful and the terminology involved can be daunting. Here is a guide to some of the frequently used terms:
Leasehold: A leasehold property is one situated on land owned by somebody else, the freeholder. There is usually an agreement in place – a lease – for the land to be used for a specified period of time. A leaseholder owns the property for the duration of a lease.
Freehold: A freehold property means the property will all become owned by you upon purchase. Changes can be made to the property without seeking express permission, so long as they fall within the parameters of planning permission or matters listed in the title (if any).
Gazumping: Gazumping is when a seller accepts a higher offer from another buyer after previously accepting a lower offer.
Gazundering: Gazundering involves a buyer initially putting forward an offer on a property, before reducing it prior to contracts being exchanged. This can create pressure for sellers to accept as refusing the offer could lead to the entire chain falling apart.
Exchange: Exchanging contracts is the point at which the deal becomes binding. Before this, it is legally possible for any of the parties to withdraw without any come-back. Upon exchange of contracts the buyers are required to pay a deposit, usually 10% of the agreed sale price, to the sellers’ solicitor. Then a moving date is fixed.
Completion: Completion is when the balance of the payment for the property is passed over to the seller’s solicitor and legal ownership transfers to the buyer. This is usually the day keys can be collected. There is no set time between exchange and completion. This time period is agreed before exchange of contracts takes place.
Deposit: The deposit is the amount of money needed on top of a mortgage to buy the property. This is usually written into the contract and represents 10% of the purchase price. The deposit is paid at the point contracts are exchanged. If the deposit is more than the 10% required on exchange, you would pay 10% on exchange and the rest just before completion.
Disbursement: Disbursements are the expenses a conveyancing solicitor pays for as part of a sale or purchase. This can include searches and Land Registry fees. A solicitor will usually provide a quote and it is common for this fee to be charged up front.
Title: A property title recognises who is its legal owner and this information is stored electronically by Land Registry.
Transfer deed: This is the document which officially finalises a sale. If you are buying a property, you will usually sign this at the same time as your contract documents. When completed, the transfer deed will be sent to the Land Registry by your solicitor and the property’s title will be updated to reflect the new ownership.
Covenant: These are legal promises, basically what you can and can’t do with or at the property.
• For more information or advice or to obtain a competitive quote for conveyancing, call Claire Egerton, Head of Residential Property at O’Donnell Solicitors, on 01457 761 320 or email email@example.com