Buying as new property doesn’t need to be daunting. Here’s some help with the terminology used during the process.
AFTER CARE
After you move into your property, we will provide you with contact details for the team who will be on hand to look after any issues you may experience after you move in. This is normally a customer care/after care adviser from the developer or contractor.
BUILD-ZONE BUILD WARRANTY
Most new build homes are covered under build warranty’s, which are designed to offer buyers peace of mind that any defects in their home will be put right. Warranties typically last 10 years, and are essentially an insurance policy for newly built homes. The warranty is taken out by the builder or developer but is in place to protect the buyer. At The Waterfront, we use a reputable provider called Buildzone.
COMPLETION DATE
There are usually two dates, a ‘short stop’ and a ‘long stop’ the former is the date by which the developer expects to have finished the building works.
CONTRACT
The agreement that sets out the main terms that have been agreed – for example: price, address, names etc.
Two copies are drawn up, and each party signs one in readiness for the exchange of contracts.
DEPOSIT
The part of the purchase price which the buyer pays on exchange of contracts.
ENERGY PERFORMANCE CERTIFICATE (EPC)
This contains information on energy use, energy performance, carbon dioxide emissions, and fuel bills.
EXCHANGE OF CONTRACTS
The swapping of signed contracts by the solicitors (together with the buyer’s deposit).
After this, the contract is legally binding, from which neither party can withdraw without financial penalties.
HANDOVER/WELCOME MEETING
Your agent/developer will welcome you to your new home on the day you move in. They will make sure you understand how your new home works and all the appliances and systems. They will also make sure your new home is clean and tidy and ready for you. You will complete a handover form together which confirms that your new home is in good order, that you have all your keys and the meters have been accurately read. We will provide you with a handover pack, which offers you advice on caring for your new home and contains all the relevant warranties.
IFA
Independent Financial Advisor.
LAND REGISTRY
The Government department that records who owns what land, and under what conditions.
LEASEHOLD
To be given ownership of a property but not the land it is built on. A leasehold is
normally offered for either 999 years, 99 years or shorter terms. It is a 999 year leasehold for The Waterfront.
LEASEHOLD SERVICE CHARGE
A charge made towards the upkeep of a leasehold property.
MEMORANDUM OF SALE / SALES LETTERS
This document records the fact that both the buyer and seller have agreed to the transaction. It can also be called a Notification of Sale. It usually records the details of the price being paid, the details of the seller and buyer and their respective lawyers. If
there are any conditions to the sale (e.g. exchange by a date for example) then this will form part of the Memorandum of Sale.
MORTGAGE OFFER
A formal written offer made by a bank or building society to lend an approved amount to purchase a property.
MORTGAGE REDEMPTION FIGURE
The amount required to repay the outstanding capital/interest of a mortgage.
OMBUDSMAN
Independent professional bodies who investigate complaints on behalf of customers against estate agents, solicitors and insurance companies.
PREDICTED ENERGY ASSESSMENT (PEA)
Predicted energy assessments are for New Build homes. Normally, when a home is designed, a “target energy rating” based on the design is produced to show a building inspector that the property will meet requirements under Part L of the Building Regulations. The final energy performance of the property must achieve at least this target energy rating to receive its final sign-off from the building inspector.
Given the importance of conveying energy efficiency information to the prospective buyer, this existing process will be used to produce a “predicted energy assessment.”
PROPERTY INFORMATION FORM/FIXTURES, FITTINGS AND CONTENTS FORM
Property Information Form/Fixtures, Fittings and Contents Form Standard forms about the property that the seller answers for their solicitor (for example: what will be left behind, details of guarantees, etc.).
REPAYMENT MORTGAGE
Your monthly repayment includes part interest and part capital repayment. So long as you meet all of the payments required by the lender on time, your mortgage will gradually reduce until it is repaid in full at the end of the mortgage term.
REQUISITION ON TITLE
An enquiry relating to the completion agreements.
RESERVATION FEE
Making an offer on a new-build home follows a slightly different route to the typical purchase transaction. You may have to pay a reservation fee to reserve a plot for a specific period. This reservation fee, will be deducted from the purchase price if you then go on to complete the purchase of the property. You will need to have a mortgage agreed in principle before you can fully reserve a property, and again having a solicitor instructed is also good practice.
SEARCHES
Checks of local council records for planning applications and restrictions etc.
SELLER’S PACK
This comprises a Property Information Form, a Fixtures, Fittings and Contents Form, a copy of the title deeds and the draft contract.
STAMP DUTY
A tax, paid by the buyer, that is calculated on the percentage rate applicable to each portion of the sale price. The current rates of duty are as follows:
0% – up to £125,000
2% – on the share from £125,001 up to £250,000
5% – on the share from £250,001 up to £925,000
10% – on the share from £925,001 up to £1,500,000
12% – on the share £1,500,001 and over
If you already own another property anywhere else in the world and decide to purchase an additional property in England, Scotland, Wales or Northern Ireland, you will need to pay the 3% stamp duty surcharge.
If you are a first time buyer you will be exempt from paying stamp duty for properties up to £500,000.
SUBJECT TO CONTRACT
Words used to indicate that an agreement is not yet legally binding.
SURVEY
An inspection made by a qualified surveyor. There are three main types of survey. Valuation report (for mortgage purposes), Homebuyers report (also comments on general condition) and Full Structural survey (examines structural detail).
TITLE DEEDS
Legal documents that prove ownership of land/buildings, and the terms on which they are owned.
TRANSFER OF TITLE
The document that passes the ownership from the seller to the buyer.
VENDOR
The legal name sometimes used to describe the seller of the property.
