Estate Agent Jargon: What Do All Those Terms Really Mean?
When buying, selling, or renting a property, estate agents often use terms that can leave you scratching your head. While they might sound like industry shorthand, understanding these terms can help you navigate the property market with confidence. Let’s break down some common estate agent jargon and what it really means.
- “Chain-Free”
This refers to a property being sold without the seller needing to complete another purchase simultaneously. For buyers, this is a dream scenario—it typically means a faster, more straightforward transaction with less risk of delays.
- “Under Offer”
When a buyer has made an offer on a property and the seller has accepted it, the property is described as “under offer.” However, until contracts are exchanged, the sale isn’t legally binding, and other offers can still be made.
- “Sold STC” (Subject to Contract)
This is a step beyond “under offer.” It means the seller has accepted an offer, but the sale is still not legally complete until contracts are signed. Surveys and legal checks are usually underway at this stage.
- “Guide Price”
A guide price is just that—a price to guide potential buyers. It’s not necessarily the final selling price but gives an idea of the seller’s expectations. Offers may go above or below this figure, especially in competitive markets.
- “Freehold” vs. “Leasehold”
- Freehold: You own the property and the land it stands on outright.
- Leasehold: You own the property but not the land, and you’ll have a lease agreement for a set number of years (e.g., 99 or 125 years). Additional charges like ground rent and service fees often apply to leasehold properties.
- “Exchange of Contracts”
This is a crucial stage in the buying process. Once contracts are exchanged, the sale becomes legally binding, and both buyer and seller are committed to completing the transaction.
- “Completion”
The final step in the process. On this day, money is transferred, keys are handed over, and the buyer officially becomes the new owner of the property.
- “Offers in Excess Of” (OIEO)
This means the seller is looking for offers higher than the stated price. It’s often used to generate interest and attract serious buyers who are willing to negotiate upwards.
- “Vendor”
The vendor is simply the seller of the property. Estate agents often use this term when discussing the person responsible for making decisions about the sale.
- “Covenants”
These are legal rules or restrictions attached to a property. They might include limits on how the property can be used, what can be built on it, or whether you can make certain changes.
- “Gazumping”
A dreaded term for buyers! Gazumping happens when a seller accepts a higher offer from a different buyer after already agreeing to sell to someone else. This is more common in competitive markets.
- “Yield”
A term often used for investment properties, yield refers to the annual rental income expressed as a percentage of the property’s purchase price. It helps investors gauge the profitability of a buy-to-let property.
- “Part Exchange”
This allows a buyer to use their current property as part payment towards a new one. It’s commonly offered by developers to encourage buyers to move into new-build homes.
- “Shared Ownership”
A scheme where buyers purchase a percentage of a property (e.g., 25% or 50%) and pay rent on the remaining share, typically to a housing association. It’s designed to make homeownership more affordable.
- “Probate Sale”
A property being sold as part of a deceased person’s estate. These sales can sometimes take longer due to the legal process involved in settling the estate.
Final Thoughts
Understanding estate agent jargon can demystify the process of buying, selling, or renting a property. The clearer you are about what these terms mean, the easier it is to make informed decisions and communicate effectively with agents.
Still unsure about a term or need guidance on your property journey? Get in touch with KUAVO today—we’re here to make the process as smooth and jargon-free as possible!