Terms explained

Click on the following terms for a full explanation of their meaning:

Contract

Survey

Exchange of Contracts

Fixtures and Fittings and Contents Form

Property Information Form

Enquiries

Local Search

Deposit

Title Deeds

Mortgage

Completion

Stamp Duty

Contract

The contract is the legally binding agreement made between the buyer and seller.

It sets out all the terms of the purchase including the property concerned the parties and the price.

Two identical copies of the contract are drawn and one is signed by the buyer and one by the seller.

Survey

If you are having a mortgage your lender will carry out a valuation of the property to ensure that the property is sufficient for their lending purposes.

This is not a detailed survey of the property and you are recommended to have a further survey. For most properties, an RICS House Buyers Report is more than sufficient although for much older and very expensive houses the surveyor may recommend a full structural survey.

These are very detailed reports on the condition of the property, which will make various recommendations for works to be carried out or further reports to be obtained. Where defects are found, it enables you to renegotiate the price or request your Seller to carry out remedial works before you complete your purchase.

Otherwise, once you have completed, you generally take the property in the condition that it is in and have no recourse to the Seller. If you obtain a survey report, then please pass this to us.

Exchange of Contracts

The contracts once signed and agreed are exchanged.

From that moment the buyer is bound to buy and the seller is bound to sell. Until this stage either party may withdraw from the transaction.

The completion date and the price are fixed.

Fixtures and Fittings Form

This is a list of items at the property which are to be taken or left behind. This is prepared by the seller of the property and signed by them and becomes binding upon both parties once contracts are exchanged. It will include such items as carpets, curtains, wardrobes etc.

Property Information Form

This form is filled in by the seller of the property and provides information about guarantees, neighbour disputes and other things which affect the property. Honest answers must be given to the questions raised in this document and there are penalties for not so doing.

Enquiries

Having checked the title and other information supplied and received as a result of searches, the Buyer's Solicitors may feel the need to raise enquiries on certain aspects and these will be addressed to the Seller's Solicitors, but the Seller's Solicitors will normally ask the Seller's for assistance in responding.

If you are a Buyer and have any queries about the property or if your surveyor has raised queries, these should be raised with your Solicitor so that the enquiries can be raised with the Seller's Solicitors and the enquiries and responses are then effectively incorporated in to the terms of the contract and are binding upon the Seller.

Local Search

This is a set of questions which are directed to the Local Authority to ascertain anything that may affect the property. It will disclose planning permissions and applications, road widening schemes, local authority charges, smoke control orders and a variety of other matters.

The search relates only to the property that is being purchased and does not cover the surrounding area. If you are concerned about anything that is likely to be built in the immediate area you should always attend the local authority in question and ask to examine their records.

Deposit

To ensure a binding contract, a deposit has to be paid by the Buyer through his Solicitors to the Seller's Solicitors.

The usual deposit is 10% of the purchase price, although sometimes a reduced deposit is agreed depending on the circumstances of the case.

If you are just purchasing the property, then you will be asked to pay the deposit just prior to exchange of contracts and the deposit is then deducted from the total price on completion.

If you are selling and buying a property, then the deposit received on your sale can usually be used as a deposit on your purchase although you will sometimes be asked to make this up to the full 10%.

Title Deeds

Title deeds to the property are proof of ownership. Most of the land in England and Wales is registered at HM Land Registry.

The State therefore guarantees the title. If you take a mortgage on your home then the title deeds will be retained by the lender until such time as you have paid the loan off.

Mortgage

A mortgage is a loan which is secured on your property.

Provided you pay the loan back in the manner that has been agreed between you and the lender all is well. If you fail to make payments due under a mortgage then the lender can institute proceedings for possession.

If at any time during your mortgage you are unable to make payments on it you should immediately contact the lender.

Generally they have departments specifically set up to assist people with financial difficulties.

Completion

On exchange of contracts, the completion date is fixed. This is the moving day.

On the completion day the Seller must vacate the property and remove all furniture and effects which are not included in the sale.

The Seller should have fully vacated the property no later than midday on the completion day which then gives the Buyer time to move into the property.

The completion day has to be Monday to Friday inclusive, because monies are transmitted through the Bank system and Banks do not operate at a weekend.

Stamp Duty

A tax on the sale or other disposition of property.

Generally speaking stamp duty is payable if you pay £60,000.00 or more for a property but there are exceptions in some areas of the Country where you can pay up to £150,000.00 and yet not pay stamp duty. Details are available from us.

Stamp duty rises the more you pay for the property.

For prices from £175,001.00 - £250,000.00 it is at 1% of the whole of the purchase price from the 3rd Septemeber 2008 for 1 Year. From £250,001.00 - £500,000.00 it is charged at 3% of the purchase price and above £500.000.00 it is charged at 4% of the whole purchase price.

Most certainly you will need to have regard to this when considering your costs of moving.

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