With so much to think about when buying, selling or renting a property, it’s natural to feel overwhelmed by the mountains of jargon thrown your way.
Whether you’re a buyer, seller or tenant, also known as a contract-holder in Wales, we’ve broken down some of the most common jargon we see so you can start your property journey with ease.
Key terms for buyers to know
Property chains: A property chain is created when a group of buyers and sellers are connected, with the respective transactions depending on each other and needing to occur at the same time. A chain will only progress at the same rate as its slowest link and if something goes wrong, it can impact the rest of the chain.
Exchange and Completion: Exchange is the exciting bit; this is where your property purchase becomes legally binding with the exchange of contracts. At this point you will need to pay a deposit to the seller and, being legally binding, if you back out of the agreement, you will lose money. Completion means the property is finally yours! For completion to take place the money should be fully transferred to the seller, and they will transfer ownership of the property to you.
Freehold: When you purchase a freehold property, you own the entire property and the land it is on in full. This makes you responsible for the maintenance of the property but could allow the possibility to extend or change the property, with the appropriate planning permission, at your own leisure.
Common phrases for sellers to be aware of
Down Valuation: A down valuation occurs when a surveyor values the property for less than the original agreed price. If your property receives a down valuation, be prepared to lower your asking price or lose your current buyer. Alternatively, if the down valuation has brought forward issues with the property that you were unaware of, and you are not working to a strict deadline, you could work on fixing those areas to avoid the issue coming up with your next buyer.
Gazundering: Gazundering occurs when a buyer makes an initial offer that has been accepted, but then subsequently reduces the offer just before exchanging contracts. This is usually done in the hope that the seller will accept less for the property and agree to the lower figure. Altering the offer amount, even after accepting, is legal until the exchange of contracts.
Compulsory Purchase Order (CPO): A Compulsory Purchase Order is the right for local authorities to purchase a property outright regardless of whether the owner wants to sell. To go ahead, the CPO must demonstrate how the purchase would benefit the public and adequately compensate the homeowner. Reasons could include if the property is obstructing any regeneration projects such as road widening schemes or improving sewers and water mains.
The terms contract-holders should brush up on
Covenants: As a contract-holder (tenant), the covenants are the terms that you agree to as part of your tenancy agreement. These could include specifications on what you can or can’t do while occupying the property and the promises that a landlord or contract-holder make during the course of the tenancy.
Security deposit: A security deposit is a refundable sum paid by a contract-holder (tenant) and acts as a reassurance for landlords against any property damage – also known as dilapidation – or unpaid rent. The deposit is protected under the government’s Deposit Protection Scheme.
Rent Smart Wales: Rent Smart Wales is a scheme put in place to support landlords in Wales to comply with the Housing (Wales) Act 2014. It offers advice and training on renting out safe and healthy homes and ensures clarity and fairness in the occupation contract. Landlords who let or manage their own property and those who let or manage on behalf of others must obtain a licence through this scheme.
We have been selling and letting properties in Cardiff for over 50 years and know the industry through and through. Whether you’re a seasoned pro or taking your first step of your property journey, our friendly and efficient staff are on hand to guide you. Call us at 0292 062 6252 or visit us in branch in our Radyr or Whitchurch offices to meet our experts.