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A language on its own: real estate jargon defined

The Real Estate process can be daunting in itself for those entering the market. In addition to that, there is a whole world of terminology to understand. We can help you learn the lingo used throughout the buying and selling process. Here are the most common terms, defined.

 

Appraisal:

A Certified Professional (Appraiser) carries out this process for estimating the market value of your home.

Appreciation:

The increase in value of your home because it is not worth more than when you purchased it.

Amenities:

In Condos -an amenity is a common area used by residents (fitness facility, pool, a rooftop terrace, party room or theater room) or a shared service (security and concierge) which residents pay monthly maintenance fees towards.

Community Amenities– are parks, schools, community centre/sports facility or walking trails which are freely and publically used by the residents in the neighborhood.

Builder:

A company whose business is the sale and construction of high-rise or low-rise homes.

Closing Date:

The Closing date is the date where a purchaser takes full ownership of their home. This date is agreed to by all parties in the Agreement of Purchase and Sale.

Closing Costs:

In addition to the purchase price of the home, legal fees and transfer fees are payable on the closing date.

CMHC

The term CMHC is an acronym for Canada Mortgage and Housing Corporation. This corporation administers the National Housing Act for the federal Government as well as develops and sells mortgage loan insurance products.

Conditional Offer

An Agreement of Purchase and Sale that is subject to specified conditions, for example, the arrangement of a mortgage. The purchaser has a certain amount of days to fulfill these conditions before the property is considered Sold Firm.

Condominium:

Often referred to as ‘ Condo’.

Condominium is a type of real estate divided into several units where residents own individual units and share ownership rights for the common areas along with other development owners.

Counteroffer:

After a purchaser submits an ‘Offer’ to the Vendor, the Vendor has the opportunity to make any changes to the agreement, in turn rejecting the initial offer and presenting new terms to the purchaser. The purchaser has a certain amount of time to either accept or decline the Vendor’s new terms.

 

Credit Report:

When buying or renting a property, your credit report may be requested by a financial institution or Landlord. This report is generated by the Credit Bureau and includes information regarding your past/current debts and your ability to make payments on time.

Curb Appeal:

How your property appears from the street. A home with ‘Curb Appeal’ will have a well-maintained exterior.

Deed:

A legal and binding document that refers to the ownership of a property.

Deposit:

Funds that are provided to the Vendor when an Offer to Purchase is made, held in trust by a Real Estate Brokerage or Lawyer until the Closing Date.

Depreciation:

The decrease in value in a property because it is worth less now than when purchased.

Down Payment

The Down payment is the sum in which is not financed by the mortgage loan. The purchaser must use liquid savings or other qualified finances.

Equity:

The variance between the value of a sold price minus any debts registered against the property.

Fixed Mortgage Interest Rate

A rate which does not fluctuate during the time-frame agreed upon between the purchaser and the mortgage lender.

Floor Plan:

A Diagram of a room or space, scaling dimensions and displaying the arrangement of rooms as seen from above.

Foreclosure:

Where the purchaser has delinquent mortgage payments, the mortgage lender becomes the power of sale and sells the property to pay the outstanding balance.

Freehold:

Complete ownership of real property or land indefinitely.

Home Inspection:

A professional Home Inspector carries out this process to identify any problems or repairs the property requires. Typically, agreements of purchase and sale are conditional upon Home Inspection.

High-Rise:

An industry term used to describe a residential or commercial building several stories tall and is equipped with an elevator.

Land Registration:

An administrative system to record the ownership and transfer of land.

Lawyer:

A licensed individual who practices and represents other individuals in legal matters. There are specialized ‘Real Estate Lawyers’.

Lien:

An outstanding claim against a property which has not been paid. A contractor may file a lien against a client’s property for an outstanding payment on completed work.

Listing:

An arrangement or agreement for the marketing of any kind of property that is for sale for a specified period.

Low-Rise:

An industry term used to describe a building that is only a few stories high. For example, single-detached homes, semi-detached home, townhomes or bungalows.

Mortgage:

A monetary loan in which is provided by a ‘Lender’ (bank institution, or trust company) and used by an individual to purchase real estate.

Mortgage Loan Insurance:

This insurance allows purchasers to purchase home with a 5% down payment while protecting lenders against mortgage default.

 

MLS- Multiple Listing Service

A database which provides accurate and controlled data about properties for sale.

 

Offer to Purchase

A formal contract the purchaser and their agent arrange setting out the terms under which the purchaser agrees to buy the property.

 

Open-House

A short time period where a seller and their agent allow the public to view a property for sale without requesting a showing.

 

PDI- Pre-Delivery Inspection

During the inspection, this is the builder’s opportunity to explain the properties features and systems. This is also where the buyer makes note of any deficiencies.

Pre-Construction:

The preliminary planning and engineering of a project to be built in the future. Sales may commence before construction and buyers are purchasing property from plans.

Property Tax:

Property Tax is based on the value of your home and is charged by the governing authority or municipality.

Purchaser:

Refers to the individual who is on the buying end of the property transaction.

RECO:

The Real Estate Council of Ontario operates in the public interest, regulating the trade of real estate in Ontario and is designed to uphold the integrity of the industry. All Salespersons, Brokers, and Brokerages must obtain registration regulatory body.

Reserve Fund:

A fund which unit owners residing in condominium buildings are asked to contribute to and used in the event a major repair to the building is required.

Townhouse:

Often referred to as a row house, Townhomes are attached, side-by-side, joined by walls.

Vendor:

The Seller of a property for sale.

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Vaughan, ON, L4k 4k2

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