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Terms To Be Familiar With When Buying A Home |
ACREAGE
1 Acre = 0.404686 Hectares
1 Hectare = 2.471 Acres
APPRAISAL
An estimate of the price achievable for a property for marketing purposes, which is not a Valuation.
APPRECIATE
An increase in value in a property.
ASKING PRICE
The initial starting price at which a vendor is looking to sell their property.
AUCTION
The procedure by which a property is purchased through competitive bidding on the open market. Remember that if you bid at auction and are successful you are legally bound to buy the property.
BID
An offer of a specific amount of money in exchange for a property.
BOOKING DEPOSIT
A deposit paid usually to the vendors estate agent. This is to demonstrate good faith on behalf of the purchaser. The deposit remains refundable to the purchaser until such time as contracts are signed.
BROKER
The word Broker in property is usually associated with mortgage intermediaries who advise purchasers on which products they should choose to help finance a property or protect their borrowings through life assurance. The Broker usually receives a commission from the product provider.
CAPITAL GAINS TAX
This is a tax that arises on gains in capital realised upon the disposal of certain assets. The current standard rate is 20%. This tax is not generally payable on the sale of your principal private residence on up to an acre of ground.
CAVEAT
A warning, caution or explanation to prevent misunderstanding.
COLLATERAL
Property or other assets provided as security for a loan which is acceptable to a financial institution.
CONDITIONS OF SALE
This is a term interchangeable with the contract for sale and having the same meaning being namely the contract prepared by the vendor’s solicitor setting out a legal description of the property to be sold, an indication as to how the vendor has come to own the property, and any special conditions relating to the sale.
CONTRACT
This is an agreement between the buyer and seller of a property.
DEED
A legal document that shows who owns a property.
EQUITY
In the context of property you own it is the value you hold in the property net of the mortgage or alternatively, when purchasing a property, it is the capital you put into the property which when combined with the mortgage pays for the property.
FIXTURES AND FITTINGS
This describes items of contents which a vendor may include with the sale of the property. Usually, items which are fastened to the property are regarded as going with the property. It is important for the vendor to state precisely what is or is not included. Any doubt will usually be determined by whether or not the particular fixtures are regarded as being securely attached to the property.
GAZUMPING
Gazumping is when the vendor of a property accepts an offer from one prospective purchaser, only to change their mind and then accept a higher offer from an alternative prospective purchaser.
GAZUNDERING
Gazundering is the opposite of gazumping. It is when the buyer after agreeing a price with a vendor, then reduces their offer at a later point, when they perceive that the market may have moved or the vendor of the property is under some pressure to sell.
GUARANTOR
A guarantor is responsible for a borrower’s loan in the event of the borrower defaulting.
HOMEBOND
This is a guarantee scheme offered to purchasers of new homes by the construction industry federation. It lasts for ten years and covers major structural defects but expressly excludes wear and tear and any damage caused to the property by the negligence of the occupier.
HOUSING INDEX
This is an indices that measures house price movement. The Department of Environment were historically the only organisation either public or private in Ireland, that published any data on house prices up to 1992, when Sherry FitzGerald launched a Dublin housing price index.
LEASE
Refers to a written contract between a landlord and a tenant, which sets out the conditions by which both parties agree to the renting of a property. It sets out the names of the parties, the premises being rented, the duration of the lease, the rent and how it is to be paid, the deposit arrangements, and any special conditions that may apply e.g. no smoking rule, no pets, etc.
LIFE ASSURANCE
Is a policy that one puts in place with an assurance company that in the event of one’s death, the company will pay out a lump sum. In the area of property these policies are normally put in place to clear an outstanding mortgage in the event of one’s death during the period of the mortgage.
PRIVATE RESIDENTIAL TENANCIES BOARD
It was established as a statutory body in 2004 with the responsibility for the overseeing of all residential tenancies in the future to include registration of all leases and the first port of call for the resolution of all disputes between landlords and tenants. By law all tenancies must be registered with the PRTB and failure to do so leaves the landlord liable to penalties as well the forfeiture of the certain tax allowances that can be claimed against the rent.
SALE AGREED
The status of a property for sale, when the vendor has verbally accepted an offer from a buyer but contracts have not yet been exchanged.
SNAG LIST
In purchasing a new home this is a list of any defects or items that require finishing that is prepared by a purchaser’s surveyor in advance of closing.
STAMP DUTY
A government tax you add to the purchasing price when you buy a residential or commercial property.
SQUARE FOOTAGE
To convert square feet to square metres - multiply the sq. feet by 0.0929 to get the square metres e.g., 2,000 sq. feet = 186 sq. m. approximately.
SQUARE METRES
To convert square metres to square feet - multiply the sq. metres by 10.76 to get the square footage e.g., 188 sq. metres approximately = 2,025 sq. ft.
SUB LETTING
Refers to the situation where an existing tenant agrees to sublet some of the property to a third party. It is normally a requirement that the landlord has to give their permission to the creation of a subletting agreement and in any event the subletting agreement would always be subject to the conditions of the master lease agreement for the property.
TENDER
A sale or letting process usually conducted formally i.e. publicly that requires a prospective purchaser or prospective lessee to submit a bid for the subject property in accordance with parameters that have been set down by the vendor’s or lessor’s solicitor in the tender document.
UNDER OFFER
The status of a property for sale, when the vendor has verbally accepted an offer from a buyer but contracts have not yet been exchanged.
VALUATION
An independent valuation of a property is usually required by a financial institution, to give them comfort as to the security being offered for the mortgage they are granting.
VENDOR
The vendor is a description to describe the person selling a property.
WITHDRAWN
A reserve price is agreed by a seller and their auctioneer before their property goes to auction. The property will only be sold if the reserve price is reached. If the agreed reserve price is not achieved then the property is usually withdrawn from auction.
YIELD
Income from a property calculated as a percentage of its value i.e. it is one’s return on the value of one’s investment usually net of purchasing costs i.e. net yield. There are various terms applied in relation to yields, each with their own underlying assumptions which should be understood if relying upon a quoted yield. |
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