Buying a home can often be the most stressful decision of your life, but here at Mishon Mackay we try to make it that little bit easier. We’ve put together a list of some of the terms you might’ve read or heard whilst property hunting, but you’re still not sure about. We’re going to be splitting this into a three-part series, covering residential sales, lettings and new homes.
Let’s get started with residential sales and some of the lingo you might come across when buying or selling a property.
Buying a leasehold property means that you own the bricks and mortar but not the land that it stands on. A lease will run down from whatever term it had to begin with and there are instances where it becomes necessary to extend the lease so that it doesn’t become a problem to sell the flat. However, it is not generally a problem buying a leasehold flat as it should ensure that there is a collective responsibility to keep the standard of the building itself up to scratch. In most circumstances, a managing agent is appointed to run the maintenance of the building and it would be their responsibility to collect service charges and appoint contractors to do work when necessary. There are more and more occasions now though when leaseholders form their own “right to manage” associations so that they can be in control of the maintenance situation themselves.
- Share of Freehold
This is essentially a leasehold flat but the owner has a share in the freehold of the building. In other words, the land that the building stands on. If a lease runs down when there is a share in the freehold, the lease can be extended without having to pay a premium for doing so, unlike the leasehold flat situation when you would have to pay a premium to the freeholder.
A maisonette is a set of rooms for living in typically over two storeys of a larger building with its own separate entrance.
- Top of Chain
Often when we agree a sale there is a chain of properties as a seller looks to tie in a purchase. The top of chain is a term often referred to and this is the sale at the top where there are no further links onwards.
- Bottom of Chain
The reverse of the top of the chain – so the sale that is at the beginning of a chain of properties that is being bought by someone with no related sale.
- AIP (Agreement in Principle)
This is when a buyer has already spoken to a lender to understand what they will be able to borrow and the lender has issued them with an ‘agreement in principle’. This agreement will then be subject to further checks on income and outgoings and the property itself but it does give some buyers a slight head start and at least an understanding of what they are likely to be able to borrow.
- Offers in Excess Of (OIEO)
When you see this prefix, (OIEO), ahead of a price it generally suggests that the seller thinks their property is worth at least the headline price and that they are hoping for a little more. There is no predetermined figure as to how much more, but it is essentially an indication given by the seller.
- Offers in the Region Of (OIRO)
A fairly loose term that is inviting reasonable offers within an acceptable range of the asking price to the seller.
- On the Market Not Sold (OMNS)
A property that is still on the market.
- Sold Subject to Contract (SSTC)/ Under Offer
Effectively when a sale is agreed on a property, it means sold subject to contract (which is the conveyancing process that the solicitors do).
- Exchange of Contracts
The point at which you become legally bound to sell or purchase a property.
This is when the money exchanges hands and you are able to move into your new home, out of your old one, or both – although it’s important to note that sometimes there are delays and this isn’t always the case.
- STPP (Subject to Planning Permission)
Most extensions or conversions will need planning permission, which you will need to get checked by your local council. This comes at a fee.
- DI (Direct Instruction)
When, as an agent, we are instructed by a seller to act for them in the sale of their property.
- DFL (Down from London)
This is a term used for those who are looking to make the move from the capital, London, to the south.
This is when the sellers of a property accept a higher offer on their property and let down the buyers they had previously agreed a sale to. Estate agents often get the blame for this but the reality is that if we receive an offer on a property we are duty bound to report it. Unfortunately sellers’ heads are often turned by more money but these situations do generally cause angst with all parties.
This term is usually used when a buyer attempts to renegotiate the price downwards, often when the transaction is close to exchange of contracts. It can be for a variety of reasons such as results of a survey, renegotiation on the sale of their own property or a perceived downturn in the market.