Understanding the specific language used by estate agents can be challenging for those unfamiliar with the industry. Estate agents often use terms and abbreviations that are unique to the property market, which can lead to confusion for buyers and sellers. Here, we explain some of the most commonly used jargons to help you navigate the property buying and selling process more easily.
1. Appraisal
An appraisal is an objective assessment of a property’s market value. It is essential in real estate transactions as it helps establish a property’s fair price, which can influence buying, selling, or securing a mortgage. Appraisals consider factors like location, condition, and market trends.
2. Broker
A broker is either a licensed estate agent or a real estate company responsible for facilitating property transactions. They act as intermediaries between buyers and sellers, negotiating terms and ensuring the transaction proceeds smoothly. Brokers earn a commission for their services, which varies based on the deal’s value.
3. Certificate of Eligibility
This document confirms that an individual meets specific criteria to be eligible for certain public benefits, such as housing assistance. In the property market, it may be required to prove eligibility for public housing or rent assistance.
4. Commission
A commission is the fee paid to an estate agent for their services in buying, selling, or renting property. This fee is usually a percentage of the property’s sale price and can vary based on the agent’s role and the complexity of the transaction.
5. Escrow
Escrow involves a neutral third party holding funds or assets during a property transaction. This company ensures that both the buyer and seller meet all contractual obligations before the transaction is completed. Once all conditions are met, the escrow company releases the funds accordingly.
6. Fair Market Value
Fair market value is the estimated price that a property would sell for on the open market. It reflects what a willing buyer would pay and a willing seller would accept, considering the property’s condition, location, and market conditions.
7. For Sale By Owner (FSBO)
FSBO refers to properties that are sold directly by the owner without the involvement of an estate agent. This method is often used to save on commission fees, though it requires the owner to handle all aspects of the sale, including marketing and negotiations.
8. Home Inspection
A home inspection is a detailed assessment of a property’s condition, usually conducted before a sale. Inspectors examine the property’s structure, systems, and components, identifying any defects or necessary repairs. This process helps buyers make informed decisions.
9. Property Portals
Property portals are online platforms where properties are listed for sale or rent. Examples include Rightmove, Top 10 Property Agents UK and Zoopla. These websites provide comprehensive listings, including photos, descriptions, and pricing, making it easier for buyers to find properties.
10. Listing
A listing refers to the detailed description of a property available for sale or rent, typically found on property portals or estate agency websites. It includes essential information such as price, location, and key features.
11. Property Valuation
Property valuation is the process of determining the worth of a property. It involves assessing various factors, including the property’s condition, location, and market trends. Accurate valuations are crucial for setting sale prices, securing financing, and assessing taxes.
12. Chain
In real estate, a “chain” refers to a sequence of linked house purchases where each transaction is dependent on the preceding one. A break in the chain can delay or collapse the entire series of transactions.
13. Completion Date
The completion date is the day when the legal transaction of transferring ownership of a property from the seller to the buyer is finalized. It’s the day the buyer can move into the property.
14. Conveyancing
Conveyancing is the legal process of transferring property ownership from one person to another. This process involves a series of legal checks, document preparations, and finalizing the transaction.
15. Equity
Equity in a property refers to the difference between its current market value and the outstanding amount of any mortgages or loans secured against it. It represents the owner’s financial stake in the property.
16. Freehold
Freehold ownership means that the owner has outright ownership of the property and the land on which it stands, indefinitely. This is the most complete form of ownership.
17. Gazumping
Gazumping occurs when a seller accepts a higher offer from a new buyer after already agreeing to a sale with another buyer, but before the contracts are exchanged.
18. Leasehold
Leasehold is a form of property ownership where the buyer owns the property for a specified number of years, as outlined in the lease. The land on which the property stands is owned by a freeholder.
19. Mortgage Offer
A mortgage offer is a formal document from a lender confirming that they agree to provide a mortgage loan for a property. It includes details of the loan amount, interest rate, and terms.
20. Surveyor
A surveyor is a professional who assesses the condition of a property. There are various types of surveys, including basic valuations, homebuyer reports, and full structural surveys, depending on the buyer’s needs.
21. Under Offer
A property is described as “under offer” when a buyer has made an offer to purchase, and the seller has accepted it, but the sale has not yet been finalized.
22. Yield
Yield refers to the return on investment a property generates, typically expressed as a percentage. It’s calculated by dividing the annual rental income by the property’s purchase price.
Including these additional terms expands the list to cover more of the commonly used jargons in the UK property market, providing a more comprehensive understanding of the language used by estate agents.