Buying a property can be a nerve-racking endeavour, and you may stumble across several industry terms that you aren’t familiar with, especially if you haven’t purchased a home before.
So, whether you’re a first time buyer, a second stepper or a seasoned homeowner seeking new horizons, use this guide to help equip you with some essential homebuying jargon.
Agreement in principle (AIP)
An agreement in principle is a way to find out how much you can afford to borrow to buy a home and is given by the bank. Getting an AIP before applying for a mortgage, can place you in a strong position as a buyer, secure a set interest rate and help speed up the buying process.
Building survey
A building survey is an expert inspection of a property’s condition. These can identify any potential problems with the home and ensure that the buyer won’t uncover any unwanted surprises after moving in. There are many types of surveys that vary in their inspection levels, so be sure to consider the options and what would best suit the property you are interested in.
A chain is formed when a group of buyers and sellers are linked together because their purchases are reliant on each other’s. If one sale falls through, this could possibly cause a break in the chain, resulting in other sales collapsing. However, if circumstances allow, there is also an option to intentionally break a chain to help ensure the sales continue to run smoothly.
Energy Performance Certificate (EPC)
An EPC measures a property’s energy efficiency by rating it from A (most efficient) to G (least efficient). This certificate is valid for 10 years and an in date copy is legally required when selling a home.
Equity is the amount of your property you own, calculated by the amount you’ve paid off your mortgage plus your deposit.
Fixtures and fittings
Although they sound similar, there is a key distinction between fixtures and fittings. Fixtures are items in a property that are attached or ‘fixed’ to the building. Fittings, however, are items that are not attached to the property, and can be easily removed. There should be an itemised list of what is included in the sale written into your contract, but some buyers and sellers may be open to negotiate on certain items that aren’t included.
Land Registry
The Land Registry is a government database containing the registrations of the owners of all property and land in England and Wales. If you are missing important title documents for your property, this database is usually where they can be recovered from.
A mortgage is a specialist loan used to purchase a property. This loan is paid back over an agreed period of time, with interest, to the lender. The mortgage repayments made should hopefully increase the equity you have in your home. There are varying types of mortgages, each suitable for a specific set of circumstances and it is always advisable to speak to a broker.
Conveyancing process
This refers to the legal process which takes place when the ownership of a property is changed from seller to buyer. The conveyancing process starts when an offer is accepted, and ends when completion takes place. Conveyancing involves many different steps, including but not limited to - instructing a solicitor, drafting contracts and raising enquiries, arranging surveys and carrying out searches.
Title deeds
Title deeds are a series of documents which are used as evidence of legal ownership of the property and the history of its ownership. These are required during the conveyancing process so that the ownership of the home can be passed over to the buyer.
A property valuation determines the home’s value based on its location, condition, and multiple other factors. Sellers have their property valued before deciding on an asking price, as this prevents overpricing or underselling.