Like many businesses, for those of us that are involved in property transactions every day there are some terms and expressions that we use to denote a particular position. The purpose of this week’s market thoughts is to explain some of these terms.

Cash buyer

This is a purchaser with money in the bank or in readily accessible funds such as shares or pension assets.  It can also include buyers who have exchanged on their property meaning that there is a high chance of money being paid to them in the near future.

Buyer subject to finance

This is someone who will apply to the bank for funds. This will be subject to a detailed application and verification.  The security on which the mortgage advance is to be made will also be subject to a valuation.

Buyer subject to sale

This is the highest risk category as the level of sale proceeds and the timing of that sale are beyond the control of the seller. The existence of a buyer in this position results in a chain.

Under offer/ Sold subject to contract

These two phrases are very similar. The seller has accepted an offer from a party that has the means to progress to an exchange of contracts. It is not a legally binding contract nor has any money exchanged hands. This is the start of exclusive negotiations; while the price and purchaser have been agreed the legal, mortgage and practical aspects of the sale need to be resolved.

It is wrong to say that a property is ‘Sold’ until after exchange of contracts; that is why I prefer to say ‘Under Offer’, as until the money is handed over no property is completely and legally sold.

Exchange of contracts

This is the point at which the two parties enter a binding legal agreement. A deposit has normally been paid, and most importantly a completion date or method has been set.  The buyer and seller can be highly confident that they will progress on to completion.


This is the point at which legal ownership is transferred from one party to another. All of the money had been paid over and the property has been vacated in accordance with the agreement for sale.  The packing up will have been completed, the meters read and the keys left at the estate agents for the new owners.

These are the most common terms that buyers and sellers come across. It is important people know their meanings in order to accurately describe their positions and allow deals to progress more smoothly.