I find myself using a lot of these words very carelessly, sometimes forgetting that not everyone speaks estate agent. People in every industry are guilty of this and can find themselves getting carried away with their lingo. So I thought I’d put together a few words and terms that I think are handy for you to know the meaning of, especially for those of you that are on the market right now whether you are selling or letting, this should hopefully make things easier to understand.
Sole Agency/Multi Agency
These terms can apply for sales and lettings and you will most likely come across it when you are looking to sell or rent your property. Sole agency would mean that you are agreeing to market your property through one agent and giving them exclusivity. Multi agency would be (you guessed it) when you allow multiple agents to market your property. Multi agency usually carries a premium as for the agent the risk is higher of putting in work and losing out. Sole agency is therefore cheaper as there is less risk.
This stands for ‘Offers In Excess Of’. You may see this on adverts where it says, OIEO £400,000. This is sometimes used by agents where they want to eliminate low ball offers, meaning offer 400 and above nothing under please. This might also be used when the agent/vendor is not sure how to price the property due to there being not many comparables on the market. Sometimes the advertising price is very low to generate interest for the property.
You will also see this on adverts as well, this stands for ‘Offers In the Region Of’. This is also used when an agent/vendor may not be sure on the price and wants to encourage offers.
On adverts you will see this written something like ‘guided between £400,000 and £450,000. This usually means they are trying to achieve something in between. This is also sometimes used to generate interest where they were able to by advertising at £425k, so by advertising at a guide from 400 you get a whole new set of eyes looking.
This stands for, Price On Application. This again is a tactic used to draw people in by creating a bit of mystery about the property/advert. Your left thinking I wonder how much this property is, so you enquire and then your details are with the agent, now even though price may not be something you are willing to pay, its created enough of a buzz and possibly brought in a buyer for the agent.
Subject to valuation
This term is very widely used, and I urge everyone to use it when making offers on properties. whether you are getting lending or not. If you are getting a mortgage then your lender will surely send a surveyor to make sure the value adds up. As a cash buyer I would still urge you to get a homebuyers survey done so that you are comfortable that the property you are buying is worth what you are paying for it. Either way, if the value doesn’t stack up then you may want to rethink your offer. That’s why it’s important to make offers saying ‘subject to valuation’.
Subject to contract
This is mainly used when accepting an offer. This means you are happy to accept the offer but it’s subject to the contract obligations. This can also be used by the buyer making the offer.
This is when you may be buying or selling your property and you have reached the second to last stage where your solicitors exchange contracts. The main thing to note here is that the buyer will have to transfer 10% of the purchase price to their solicitor which will be sent to the seller’s solicitor whether the sale completes or not. For a £400,000 property this would be £40,000. If the sale happens to fall, due to the buyer, this amount will be given to the seller and the seller would pay their agent from this. This is why all agents charge their fees on exchange rather than completion.
This is when the property sale transaction is complete. Exchange would have already happened and on this day all the funds get transferred to the seller. If the seller has a mortgage then that gets paid off first and the surplus is transferred into the seller’s bank account. For the buyer, this is essentially when you get to pick up your keys. Exchange and completion can happen simultaneously but are more common to happen a couple weeks apart. In my experience chain purchases with homemovers like to have a gap after exchange. This allows the seller and buyer to be much more confident that the transaction will definitely take place and prepare for the move, whereas BTL purchasers tend not to worry about a gap so much as they don’t need to move. Moving homes is after all one of the most stressful things we do.
I hope this proves useful to some of you. If there are other words/terms/phrases you’ve come across and do not understand, don’t hesitate to ask (email email@example.com). I’ll be happy to explain, and I’m sure I’ll be writing part 2 very soon.