Navigating the housing market can be daunting for first time buyers, especially when it comes to understanding the key terms and jargon that estate agents use regularly. To get yourself ahead of the curve, we’ve compiled a list of popular real estate terms and placed them into a glossary to help you with your property browsing:
Agreement in principle (AIP)
A document given by a mortgage lender that confirms you will be given lend of a certain amount based on your income and usually a credit search and credit score. An AIP will help you prove to a seller you’re a serious buyer.
Annual percentage rate (APR)
The APR is the total percentage cost of the loan every year, which includes interest and any additional fees. APRs are a legal requirement when advertising mortgages and any other financial deals.
Asking price
The price a seller wishes to achieve for their property.
Bank Rate
Also known as ‘base rate’, it is the interest rate set by the Bank of England which influences other banks – generally used as a benchmark for the interest rate a bank charges when they lend money.
Building Survey
A report into the physical state of a property, carried out by a professional.
Chain
The scenario involving several buyers and sellers whose purchases are interwoven and dependant on one another in a chain-like fashion. For example, first time buyers are the first link in the chain as they enable the owners of the house they wish to purchase to move up to a different property and so on.
Conveyancing
The term given to any legal work involved in transferring the ownership of a property from one party to another.
Curb appeal
The overall attractiveness of a property’s exterior.
Deeds
Documents detailing who owns the title of a property, along with any responsibilities on the property e.g. what you can/cannot alter, rights of way etc.
Deposit
A sum of money used to secure a property purchase, usually around ten to fifteen percent of the property’s full value, paid to display your commitment to the purchase with the remaining amount to be paid in the form of a mortgage.
Energy performance certificate (EPC)
A certification to show the efficiency of a property, indicative of how much energy bills will cost.
Equity
Equity, also known as ‘capital’, represents the amount of money a homeowner has put into a property. This value is built up over time as the owner pays off the mortgage and the market value of the property increases.
Freehold
A system of ownership which means you own the building and the land it sits on.
Gazumping
When a higher offer from another party is accepted by the buyer, even after the offer with the first buyer has been accepted.
Interest rates
A percentage charge added to the amount you pay back on a loan.
Leasehold
A system of ownership where you own the property but not the land it sits on, which means a time period will be placed on the lease which will need to be renewed with the landowner.
Mortgage
A specialist loan used to pay for a property which is paid back over time with interest to the mortgage lender.
Stamp duty
A lump-sum tax that anyone buying a property over a certain price in England and Northern Ireland must pay.
Surveyor
A qualified expert who specialises in examining the property for any potential issues or benefits which will affect the home’s value.
Vendor
Person who is selling a property. They may also be known as the seller.
Valuation
A survey conducted to establish an estimation of the market value of your house, carried out by a property professional.
Yield
The income generated from a rental property presented as a percentage of the property value.
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