Real Estate Alliance

Jargon Buster

Advised Minimum Value (AMV)
Advised Minimum Value is the auctioneer’s true opinion of value of the property at the commencement of the marketing campaign.

Approval in principle
This is the first document you will receive from your mortgage lender and it will outline how much you can borrow

Annuity
Fixed payments paid at regular intervals over a specified period. These are usually made after a period of investment which has helped create or purchase the annuity.

Annual percentage rate (APR)
This is the effective interest rate that would be paid on a loan, taking into account one time fees and standardising the way the rate is expressed. It amounts to the total cost of credit to the consumer expressed as an annual percentage of the amount of credit granted and is likely to differ from the rate advertised by the lender to give a rate which is a truer reflection on the actual cost to the consumer.

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.

Arrears
This is the total of late or overdue payments for a mortgage or any other regular payment.

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.

Auctioneer / Estate Agent
Is an individual or an organization who on their own behalf or on behalf of their organization holds a license to practice as same under the Auctioneers and House Agents Acts 1947 - 1973.

Arrangement fee
A fee sometimes charged by a lender on the drawdown of a mortgage.

Best and Final Offer Procedure
This is usually a process used by estate agents to create an event that crystalises all interested parties highest offers for a property to be submitted by a particular time, on a particular day.

Bid
An offer of a specific amount of money in exchange for a property, as in an auction.

Bidding
A purchasing process where offers from different parties are communicated to the vendor for their consideration.

Booking deposit
A deposit paid usually to the vendor’s estate agent, or in the case of New Homes, to the developer. This is to demonstrate good faith on behalf of the purchaser in an intended purchase of a property. The deposit remains refundable to the purchaser until such time as legal relations arise when and if the contracts are signed but if this should not happen then the deposit is refundable.

Buy to let
Usually an investment property one buys to rent out to a tenant.

Capital
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 equity you put into the property which when combined with the mortgage pays for the property.

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%, which is normally applicable having adjusted the gain for an annual individual Capital Gains Tax allowance and indexation, if appropriate. This tax is not generally payable on the sale of your principal private residence on up to an acre of ground. We advise that Tax Advice be sought from an appropriate professional Tax Advisor or Accountant in regard to matters of Tax.

Capped rate mortgage
This is a mortgage where the interest rate is fixed at a particular interest rate for a period of time.

Caveat Emptor
This is the Latin for 'let the buyer beware'. When buying a property the prospective purchaser should be aware that the law does not offer them blanket protection as to the faults of the property, and therefore the purchaser needs to satisfy themselves, as to what if any the faults might be.

Collateral
Property or other assets which are acceptable to a financial institution as security for a loan.

Closing Date
This is the date specified in the contract for the sale or purchase of property in which both the vendor and purchaser are obliged to complete the sale by paying the balance of the monies due and handing over ownership and possession of the property.

Completion
This is when all the legal documents between purchaser and vendor have been signed and full ownership and occupation has been legally transferred to the purchaser.

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.

Contract Deposit
Money paid when contracts are exchanged, usually 10% of the purchase price. In the event of a Booking Deposit having been already paid it is normal that a balancing payment is made to increase the sum to 10%.

Conveyancing
This describes the legal process whereby the title in property is transferred from the vendor to the purchaser so as to ensure that the purchaser obtains a good and marketable title together with all the rights that he needs to own and occupy the property.

Deeds
A legal document that shows who owns the property.

Deferred Payment
This is what it states - but in the context of property, it can often mean taking an agreed short break from paying your mortgage often at a time of high or one off expenditure.

Disbursements
These are expenses usually incurred by your solicitor while handling a conveyance on your behalf.

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.

Exchange contracts
This phrase is used to describe the moment when legal relations arise between the seller and the buyer of property and defines the crystallisation of legal relations between them. The contracts are signed by the purchaser in duplicate, then passed over to be counter signed by the vendor. The "exchange" takes place when the vendor returns back a signed contract back to the purchaser creating a binding situation between them.

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.

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 index that measures house price movement.

Inventory
This is taken to refer to a list of contents provided to a tenant who is renting a residential property.

Interest Only
This applies to a mortgage where the borrower simply pays interest on the outstanding capital amount owing on the mortgage.

IAVI
This is a national body representing Auctioneers and Valuers throughout Ireland.

Investment Property
This is used to describe a building that is let out to a tenant / tenants.

Land Registry
This is the state authority which used to be responsible for the registration of certain types of title in Ireland. It has recently been replaced by the Property Registration Authority which is now the registration authority in relation to all property registration in Ireland and covers the two types of title in this country namely "registered" title and "unregistered" title.

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.

Lessor
This is the term used to describe a land owner who leases out his land to a lessee for a term of years subject to certain covenants and conditions.

Lessee
This is the term used to describe a person who takes a lease from a lessor or landlord for a term of years subject to certain covenants and conditions.

Loan Offer
This is the formal letter one receives from a lender outlining the terms and conditions attached to their loan / mortgage offer.

Loan To Value Ratio (LTV)
A calculation which compares the size of your mortgage to the value of your house.

Maintenance/Service Charge
Annual charge payable to a Management Company to administer, maintain and repair the communal areas of an apartment complex or a housing development that has not been taken in charge by a Local Authority.

Money Laundering
Since the 8th March 2005 Auctioneers and Estate Agents are now officially "designated bodies". In effect this means that individuals and companies engaged in providing such services must comply with provisions of The Criminal Justice Act 1994 relating to anti-money laundering provisions.

Mortgage Protection
An insurance policy which covers your mortgage repayments if you can't repay same, due to illness or redundancy or any other specified circumstances.

Mortgage Term
The agreed duration in terms of years for the repayment of a mortgage.

Offer
This is the amount that one submits in terms of a price that one is prepared to pay for a property. If there are any conditions attaching to your offer, you should make them crystal clear to the estate agent acting for the vendor.

Penalty
In terms of property, a penalty might be used to define an additional charge on your mortgage if you for instance break a fixed interest rate.

Pre '63
This is a term used to describe residential investment properties let in multiple units and converted into such prior to the operation of the Local Government Planning and Development Act 1963. This term "Pre 63" is slightly misleading as the operational date of the Act was actually in October 1964. One's solicitor can advise one more fully as to the detail concerning the legal status of a Pre '63 property which is normally evidenced by a statutory declaration in writing by the vendor, or other informed party who own the property at the operative date of this Act.

Principal
In terms of property this is the total amount of money one borrows on a mortgage to purchase a property.

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.

Private Treaty Sale
This is the normal type of property sale, where an Asking Price is quoted by an estate agent on behalf of the Vendor.

Property Portal
This is the type of website that collates properties from a number of different sources e.g. estate agents.

Redemption Figure
In terms of property this is the capital amount outstanding that has to be paid back to a financial institution in order to clear an outstanding mortgage.

Registered Title
This is the term used to describe title which was formerly registered in the Land Registry but is now registered with the Property Registration Authority following the merger of the Land Registry with the Registry of Deeds. In simple terms agricultural land will generally speaking be registered title. Most urban properties and in particular older properties will generally be "unregistered" title. The essential difference between the two is that with the registered title one essentially is dealing with one document of title - namely the Land Certificate. One does not have to look behind the Land Certificate to trace the previous owners. With an "unregistered" title a vendor's solicitor offers a number of documents of title tracing back the ownership of the particular property for up to forty years so that a chain of ownership is disclosed and a purchasers solicitor is entitled to be satisfied as to it's completeness.

Reserve Price
This is the minimum price at an auction that a vendor has decided to sell at having consulted with their estate agent. For understandable tactical reasons, this decision by the vendor is not made public until the auctioneer at the auction decides to declare that the property is "on the market".

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 property.

Section 23
Section 23 relief is a tax relief that applies to rented residential property in a tax incentive area or for certain types of buildings. It is available to a person who has incurred expenditure in the purchase, construction, conversion or refurbishment of a qualifying property and who lets the property, having complied with certain conditions. Relief for expenditure incurred can be set against the rent received from that property and other Irish rental income so that one's taxable income is reduced.

Section 50
Section 50 relief acts in a similar manner to section 23 above, but specifically relates to expenditure on qualifying student accommodation. As with section 23 relief above, qualifying expenditure had to take place before 31 July 2006.

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.

Tenant
A person who rents a property. An alternative description for a tenant is a lessee.

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. When submitting a tender the party is required to enclose a deposit cheque. Usually, there is a period after the receipt of tenders, which is often 14 days for the vendor or lessor to consider the tenders submitted. In the event the vendor or lessor decides to accept a particular tender, the bidder whose tender is accepted is bound by the law of contract and cannot change their mind.

Tracker Mortgage
A tracker mortgage is a form of the mortgage tied to the base interest rate as set by the European Central Bank (ECB) with an additional specified margin (often 0.75% to 1.0%) to cover the risk and administration costs that the lending institution incur.

Unregistered Title
This the term used to describe property which is not registered title. The essential difference is that with registered title the vendor's name is recorded in a Land Certificate and a purchaser does not have to trace back the previous owners as the persons whose name appears as owner is regarded as being conclusive proof of his ownership. With an unregistered title however, a chain of ownership going back to as far as forty years is produced giving a "root" of title.

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.

Viewing
A period of time during which a property for sale or rent is held open for public viewing.

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. Afterwards the auctioneer usually approaches the highest bidder to see if they can agree a purchase price.

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.