13 Common Phrases You’ll Come Across When Buying a House
If you are planning to buy a house for the first time, chances are you’re going to come across a wide range of phrases that are new to you. From no chain to a cash buyer, mortgage in principle to offers in region of, understanding the various common phrases that are typically used will help you better navigate the property buying process. While you may not be familiar with a lot of these phrases right now, you can usually be sure that by the time your property purchase is finalised you will have used and heard quite a lot of them, quite often. Here are some of the most common phrases and terms that you will come across when buying a house, explained.
What Does Cash Buyer Mean?
A cash buyer is exactly that – somebody who is purchasing the house with cash. Typically, they do not need to borrow via a mortgage or a loan in order to purchase a property, and they do not need to sell an existing property in order to make the purchase. Some properties are offered for sale to cash buyers only; in this case, it’s typically where a bank or other lender wouldn’t feel comfortable lending, for example, if the property has no inside kitchen or bathroom or is otherwise uninhabitable. Many first time buyers mistakenly believe that they are cash buyers since they do not need to sell a property beforehand, but if you need a mortgage to purchase the property, this is not true.
What Does Chain Free Mean?
Chain free property is a term that you are probably going to come across a lot in your search to buy the perfect home, yet it’s difficult to define. A property chain occurs when both buyers and sellers have the common goal of moving home. The first buyer in the chain will be purchasing the property without needing to sell a current property to make the sale complete, while on the other hand, the seller who is at the bottom of the chain will need to sell the property to complete the chain. There may be other parties in the chain, such as solicitors, surveyors, mortgage providers or estate agents. Chain free means that there are no other parties involved that you will need to wait for while they purchase or sell properties. Commonly, new builds are chain free since you will not need to wait for the current owner to buy a new property to complete the chain, but they are only completely chain-free when purchased by a first-time buyer who is not selling an existing property.
What Does No Chain Mean?
No chain means pretty much the same as chain-free, where there is no need to wait for the previous owners to purchase another property or sell your own existing property before purchasing a new home.
What Does No Onward Chain Mean?
Again, no onward chain is just another way to describe chain-free or no chain. It means that the buyers and sellers do not have to sell their current property before they can purchase a new one.
What Does Leasehold Mean?
Most properties are sold as freeholds, which means that you own the land that the property is built on and you are entitled to live indefinitely in the property. However, owning a leasehold on a property means that you will only have the right to live in the property for a certain amount of time. In the UK, this is usually 125 years. However, this means that you’re essentially a tenant in your own home; you may be unable to sell the property and might need to ask the freeholder for permission before doing certain things.
What Does Share of Freehold Mean?
A freehold is the common ownership of land, property, and any immovable structures included with the land. However, a share of freehold is slightly different, and there are a few different ways in which it can be set up. It is common with blocks of flats, for example, where the freehold is split equally between a number of flat owners and the freehold is held in their personal names. This is possible with up to four flat owners. On the other hand, it can also occur when a company owns the freehold and each tenant or flat owner also holds a share of that company. If you purchase a flat with a share of freehold, you will either be given a share in the company that controls the freehold, or you will have your name on the property deeds.
What Does Mortgage in Principle Mean?
A mortgage in principle is also called a decision in principle or a mortgage promise. It is usually characterised as a statement or certificate from a lender to say that they would lend you a certain amount in principle. This involves the lender checking your credit file and financial history to determine whether or not you are eligible to borrow from them, and if they are willing to lend you the amount that you need. You do not have to get a mortgage in principle, but it can help make the process run more smoothly if you are looking for a property to purchase. You will only need to go through the full application process for the actual mortgage when you have had an offer on a property accepted.
What Does Interim Payment Mean?
An interim payment or interim financing refers to the process of obtaining short-term funding to close the transaction. It is also called a bridge loan and is often used by buyers who need to sell an existing home in order to purchase another but are unable to complete the sale of the first home before purchasing the second one. This payment is used to cover the cost of the remaining purchase price of the second property until the first property sale has been closed and the proceeds are received.
What Does Offers in Region of Mean?
If you’re looking to purchase a property and find one that invites you to make offers in the region of a certain amount, this indicates that you can offer under or over the asking price for the home depending on what you think that it is worth. It typically indicates that the seller is willing to be flexible on the price.
What Does Under Offer Mean?
Under offer simply means that an offer has been made on the property by a potential buyer. Technically it could be described as such even if the offer has been made and rejected by the seller, but typically, most estate agents will only use this term when the offer has been accepted or accepted in principle.
What Does Sold Subject to Contract Mean?
Although ‘sold subject to contract’ and ‘under offer’ are not the same thing, estate agents will often use ‘under offer’ for the same circumstances. If a home has been ‘sold subject to contract’, this usually means that there is an offer that has been accepted on the property, but no contract has yet been exchanged. This could be due to the buyer waiting for their mortgage application to be accepted or for an existing home to be sold before they can purchase the next one. Many estate agents will no longer continue showing the property to other prospective buyers once it has been sold subject to contract, and a new buyer coming along with a better offer on a property that’s already under offer is not as common as it once was, but does still happen.
What Does Sold STC Mean?
Sold STC is simply a way of abbreviating ‘sold subject to contract’. This means that there has been an offer made and accepted on the property, but no contract has yet been signed. It usually indicates that the property is no longer available for sale or to make an offer on unless anything changes with the current circumstances.
What Does Energy-Efficient Mean?
Energy-efficiency is becoming more and more important to people looking to purchase a property as it indicates just how much energy the property uses. Energy-efficiency may be characterised by a wide range of different factors including whether or not solar panels are fitted to the property, the type of glazing on the windows, and the energy efficiency rating of any integrated appliances that come with the home. The boiler’s efficiency rating will often make a big difference to the overall energy-efficiency of the home. Of course, you can also make any property more energy-efficient when you move in, so this might not always be something that is highly important to all buyers, especially if you have plans to renovate. Typically, newer properties tend to be more energy-efficient compared to older ones, but this is not always the case.
Now that you have a better understanding of some of the most common phrases you’ll come across when buying a property, check out the great range of homes for sale at greaterlondonproperties.co.uk.