Real Estate Terminology

Speaking the Language of Property with Confidence

In every profession, there’s a language you need to master—and real estate is no exception. Whether you’re talking to buyers, developers, solicitors, or lenders, using the correct terms helps you sound credible, knowledgeable, and professional.

This module isn’t about memorizing everything in one go. It’s about recognizing the most common words you’ll encounter and knowing where to find the meaning when you need it.

Why Terminology Matters

Real estate conversations include technical terms about financing, legal procedures, ownership rights, and property types. If you understand these words, you’ll navigate contracts with ease, explain things clearly to clients, and avoid misunderstandings that cost time and money.

Think of it like learning key vocabulary in a new country—you don’t need to speak every word, but you do need to understand the essentials.

AGREEMENT IN PRINCIPLE

An estimate of how much money you can borrow from a mortgage lender.What you can borrow is based on your income and credit history. Also known as a decision in principle, mortgage in principle, approval in principle or mortgage promise.

APPRAISAL

An appraisal is required to gather the estimated value of a piece of real estate. During the sale, the mortgage lender sends out an appraiser to get a professional opinion of the value of the property. This helps the lender decide if the property is worth the amount of the loan the potential buyer is seeking.

ASKING PRICE

The listed price of the property, which may be negotiable.

BANK RATE

Also known as 'base rate', it is the interest rate set by the Bank of England which influences other banks. It is generally used as a benchmark for the interest rates banks charge when lending money.

BUY-TO-LET

Term used for either a property purchased for the purposes of renting (letting) or a mortgage associated with said purchase.

CLOSING COSTS

Closing costs are an assortment of fees, including fees charged by: a lender, the title company , attorneys, insurance companies, taxing authorities, homeowner's associations, real estate agents, and other closing settlement related companies.These closing costs are typically paid at the time of closing a real estate transaction.

COMPLETION DATE

When the transaction is complete and ownership of the property passes from seller to buyer. Normally, the seller's solicitor will ask the estate agent to release the keys to the buyer at this time.

CONVEYANCER

A qualified individual, either a solicitor or licensed Conveyancer who deals with the legal aspects of moving the legal ownership of a property from one person to another (Conveyancing).

CONVEYANCING

Legal work involved in buying and selling a house.

COUNCIL TAX

This is an annual tax charged by local authorities in the United Kingdom that is based on the relative value of the property. Both homeowners and tenants must pay this tax.

DEEDS

Documents that show who owns the title of a property or land, along with any responsibilities on the property, e.g. what you can/cannot alter, rights of way, etc. Deeds are usually held by the mortgage lender until you pay off your mortgage, then they can be held by you or your solicitor.

DEPOSIT

An amount of money used to secure a property purchase, usually ten per cent (or lower) of the full price. Paying a deposit displays your initial commitment to purchase with the remaining amount to be paid later or provided in the form of a mortgage.

DETACHED

Property that stands alone and is not attached to a neighboring house.

DUE DILIGENCE

A due diligence period of time might be available in the purchase agreement, which is a time frame provided to a buyer to fully examine a property, often by hiring experts to inspect the property, perform tests, etc., so that a buyer may decide on how to proceed.

ENERGY PERFORMANCE CERTIFICATE (EPC)

It shows the efficiency of a property and gives an indication of how much the energy bills will be. It is displayed as two graphs: the energy efficiency and the environmental impact of the property. Both are graded from A (the best) to G (the worst).

EQUITY

Equity, or capital, represents the amount of money a homeowner has put into a property. This value is built up over time as the owner pays off the mortgage and the market value of the property appreciates.

EXCHANGE OF CONTRACTS

The point at which both parties are committed to the property transaction.

FIRST TIME BUYER

A buyer who has not previously purchased a property.

FIXED RATE MORTGAGE

A term used to describe a mortgage that has an interest rate which stays the same for a predetermined 'fixed' period - the interest rate will not change during this time.

FREEHOLD

Absolute ownership of property and land.

GROUND RENT

The money paid to the freeholder for use of the land and property.

INTEREST RATES

A percentage added to the amount you pay back on a loan. For example, a mortgage with a four per cent interest rate would mean you have to pay back the full amount of the loan - plus four per cent of its value.

LAND LEASE

Traditionally, when you purchase a home, you own the home and the land the property is built on. There are some circumstances that involve a land lease, which means you would own the home while paying rent to the landowner for the land.

LEASE

Document in which the owner of a freehold property lets out their premises to a named party at a certain price and for a specified time.

LENDER

A person or company that lends money for an agreed time period. They expect to have the money repaid with interest added. A mortgage company is an example of a lender.

MAISONETTE

An apartment that is set over two or more floors.

MORTGAGE

A specialist loan used to pay for a property which you pay back over time with interest to the mortgage lender. The property itself is considered collateral, this means if you don't keep up with your repayments, it can be repossessed and sold to reclaim the money owed. There are varying types of mortgages, see our guide to find out more.

MORTGAGE BROKER

An advisor who can arrange your loan for you, potentially getting a better deal than you'd find elsewhere.

MORTGAGE PRE-APPROVAL LETTER

Getting a mortgage pre-approval letter is important because it gives home buyers an idea of what they can afford. A mortgage pre-approval letter is issued by the lender and identifies the terms, loan type and loan amount the buyer qualifies for after checking the buyer's debt-to-income ratios along with cash on hand and credit history.

NEW BUILD

A property that hasn't been lived in and has been recently built. Bear in mind that different banks and mortgage lenders have their own definitions. They can vary from whether the property has been lived in but not bought, whether it has been converted or refurbished or whether it was finished within a certain amount of years.

OFFER

Buyers make a formal offer on the home they want to purchase. The offer can be the full price, or what you and your agent deem a fair market value.

OFF - PLAN

When a property is bought before the building work has begun, or has been completed.

PRE - APPROVAL

Getting pre-approved requires home buyers to fill out an application that allows a lender to determine their financial situation, including their debt-to-income ratio, ability to repay and credit-worthiness. Once this is in hand, the lender can give the buyer a letter stating the exact loan amount they have been pre-approved for along with the total sales price they are approved for.

SEMI - DETACHED

Property joined to another house on just one side.

SERVICE CHARGE

An annual fee to help cover the cost of running a building and looking after communal areas .

SHARED OWNERSHIP

Shared ownership is a government-backed scheme that allows you to buy a percentage of a property (usually 25-75%) and pay rent on the remaining share. Over time, you can increase your ownership through a process called "staircasing." This option makes home-ownership more affordable, especially for first-time buyers.

SOLICITOR

A type of lawyer who deals professionally with legal matters. Like a conveyancer, they will handle the transferring of home-ownership but their knowledge goes above and beyond just that of property.

STAMP DUTY

Tax that must be paid to the government on the purchase price of the property.

SURVEYOR

In the context of property, they are a qualified expert who specialise in examining and highlighting any potential issues or benefits within a property. Such issues may affect its price or need fixing in future.

TENANCY

A temporary possession of a property owned by another person or party.

TENANCY AGREEMENT

A legal agreement to protect the rights of the tenant and landlord and setting out all the terms and conditions of the rental arrangements.

TOWNHOUSE

A Georgian or Victorian house set out over several floors, sometimes with as many as five floors.

UNDER OFFER

If a property is under offer, it means that the seller has accepted an offer from the buyer but the contracts have not yet been exchanged.

VALUATION SURVEY

The survey undertaken on behalf of the lender to ensure the house value is high enough to secure against any mortgage.