Real Estate Glossary

1 MONTH VISIT

This visit occurs 1 month after Home Delivery. During this visit the assigned Service Rep will review manufacturer suggested care of home components, revisit the warranty process and guidelines, and explain the procedure for requesting service.

11 MONTH VISIT
This visit occurs 11 months after Home Delivery. During this visit the assigned Service Rep will review the performance of various home components, revisit the warranty guidelines and timelines, and explain the procedure for requesting service.

5 MONTH VISIT
This visit occurs 5 months after Home Delivery. During this visit the assigned Service Rep will review responsibilities and periodic maintenance of home components, revisit the warranty process and guidelines, and explain the procedure for requesting service.

ARCHITECTURAL DESIGN  (Elevation)

This is the term for what the front of your home looks like. Most home plans are available with choices between several different elevations, meaning that although they are the same home plan they will look different from the front, with different roof lines, porch sizes, or placement of windows.

APR (Annual Percentage Rate)

The yearly interest percentage of a mortgage as expressed by the actual rate of interest paid given the term, rate, amount and cost of arrangement.

ARM (Adjustable Rate Mortgage)
A mortgage for which the interest rate is adjusted periodically according to movements in a pre-selected index.

ABSTRACT OF TITLE
A written history of the title to a parcel of real estate as recorded in a Land Registry Office.

ACCELERATION CLAUSE
A clause in the mortgage document which accelerates the maturity date and states that upon default, the principal sum of the mortgage and accrued interest falls due.

ACCRUED INTEREST
Interest which has accumulated unpaid since last payment date.

ADVERSE POSSESSION
When an individual, not the owner, takes actual possession of the property, hostile to, and without the consent of, the owner.

ADD-ON INTEREST
An interest amount added to the principal of a debt and made payable as part of the debt , usually in equal periodic instalments (also called Pre-calculated intrest).

AFFIDAVIT
A statement of declaration in writing and sworn or affirmed before an authorized individual, such as a notary public.

AGENCY
A relationship which arises out of a contract, where an agent is authorized by a principal to engage in certain acts, usually in dealing with one or more third party(s).

AGREEMENT OF PURCHASE AND SALE
A written contract to buy property in which the purchaser and vendor agree to sell upon terms and conditions as set forth in the agreement.

ALIENATION CLAUSE
This is a clause that enables the mortgagee to demand payment of the outstanding balance including interest upon sale or transfer of title. (also known as a "due on sale" clause)

AMORTIZATION
The gradual retirement of a debt by means of partial payments of the principal at regular intervals.

AMORTIZATION OF A MORTGAGE
The arrangement for paying off a mortgage by instalments, over a period of time.

AMORTIZATION PERIOD
The time period required to completely retire a debt through scheduled payments of principal.

ANNIVERSARY DATE
The occasion of one year from an event pertaining to a mortgage. (Eg. Registration date)

APPRAISED VALUE
An estimate of property value written by a qualified individual (AACI). Appraisals performed for mortgage lending purposes, may not reflect the market value of the property, or the purchase price.

APPURTENANCE
Something which is outside the property itself, but belongs to the land and is joined thereto; eg. a road over another's land providing an access (right-of-way) is an appurtenance.

ARREARS
To be "in arrears" is to be behind in the payments called for under a mortgage agreement.

ASSESSED VALUE
An amount assigned to taxable property, for the purpose of equalizing the burden of taxation.

ASSIGNEE
One who takes the rights or title of another by assignment.

ASSIGNMENT OF MORTGAGE
The assigning of a mortgagee's interest in the mortgage to a new mortgagee. The legal sale of the mortgage with or without an agreement to repurchase.

ASSIGNMENT OF RENTALS
The enforcable diversion of income from mortgaged property to the Mortgagee.

ASSIGNOR
One who transfers or assigns the rights or title to another.

ASSUMPTION AGREEMENT
A document which binds someone other than the mortgagor, to perform mortgage obligations.

ASSUMPTION OF MORTGAGE
The action of a purchaser taking responsibility for a mortgage debt by way of a legal agreement. The original covenantor(s) responsibility pursuant to the mortgage obligation remains intact in such arrangement, so long as the existing documentation remains registered.

ATTORNMENT OF RENT
The redirection of rental income to a Mortgagee, usually in the event of default.

AUTHORITY
The legal right given by a principal to an agent to act on the principal's behalf in performing specific acts or negotiations. 


BALANCE DUE ON COMPLETION
The amount of money a purchaser will be required to pay to the vendor to complete the purchase, after all adjustments have been made.

BALLOON PAYMENT
This is a final mortgage payment at the end of the term which pays off the outstanding loan in full. The amount of money (principal) required to discharge a mortgage at maturity.

BLANKET MORTGAGE
A single registered document which encumbers more than one property.

BLENDED PAYMENT
Equal payments consisting of both principal and interest, paid regularly during the term of the mortgage.

BREACH OF CONTRACT
Failure to fulfil an obligation under a contract. Breach confers a right of action on the offended party.

BUILDING CODES
Regulations established by government providing for structural requirements.

BUYDOWN

A payment to the lender from the seller, buyer or third party causing the lender to reduce the interest rate during the term of the mortgage.

CAP
Refers to a maximum interest rate increase for a mortgage.

CAPITALIZED VALUE
The value of a property based on the net income.

CAPITALIZATION RATE
The rate of return anticipated by an investor in property.

CAVEAT EMPTOR
"Let the buyer beware". A buyer must examine fully before the purchase is made.

CERTIFICATE OF CHARGE
A mortgage document in the Land Titles System.

CESSATION OF CHARGE
A discharge of a mortgage in the Land Titles System.

CHAIN OF TITLE
The sequence of conveyances and encumbrances affecting a title to land from the time that the original patent was granted or as far back as records are available.

CHARGE
The name given to a mortgage document when title is registered under the Land Titles Act.

CHATTELS
Moveable possessions and personal property that may be removed without damage to the property, (eg. appliances).

CHATTEL MORTGAGE
An encumbrance against moveable possessions, or personal property that may be removed without damage to the property, (e.g. appliances).

CLOSED MORTGAGE
A referance to the absence of the privilege to accellerate repayment during the term of a mortgage either by bulk payment(s) or increase to scheduled remittances.

CLOSING
See "Date of Completion"

CLOUD ON TITLE
Any encumbrance or claim that affects title to property.

CMHC
The Canada Mortgage and Housing Corporation a Canadian Crown Corporation which administers the National Housing Act. CMHC services include the insuring of high ratio mortgage loans for lenders.

COLLATERAL MORTGAGE
A mortgage which secures a loan given by way of a promissory note.

COLLATERAL SECURITY
An additional form of security, pledged to reduce the risk of a mortgagee.

COMMITMENT
A written notice from a lender who advises of approval to advance a specified amount of funds under certain conditions.

COMMON LAW
That part of the law formulated, developed and administered by the old common law courts, based originally on unwritten common customs.

COMPLETION LOAN
A mortgage loan dispursed following the satisfactory completion of construction.

COMPOUND INTEREST
Interest on both the principal and on interest that has accrued.

COMPONENT FINANCING
A device by which lending is split into separate parts and treated individually.

CONDITION PRECEDENT
An event or action necessary before an agreement becomes binding.

CONDITION SUBSEQUENT
A condition referring to a future event upon the happening of which the contract becomes no longer binding on the parties.

CONDOMINIUM
The ownership of a separate amount of space in a multiple dwelling or other multiple-ownership of common elements used jointly with other owners.

CONSIDERATION
Something of value given to make a promise of repayment enforceable.

CONSTANT ANNUAL PERCENT
The percentage required to pay the principal and interest to amortize the loan.

CONSTANT PAYMENT MORTGAGE
A mortgage which is paid by equal periodic amounts consisting of principal and interest payments. It may be self-liquidating, which means the mortgage is entirely paid off at maturity (fully amortized), partially amortized, at the end of which there remains a principal balance due at maturity (also known as balloon mortgage).

CONTRACT
An agreement between two or more parties given receipt of lawful consideration to do or refrain from doing some act.

CONSTRUCTION ADVANCE
Moneys advanced to the borrower under a construction loan.

CONSTRUCTION LIEN
A claim against property pursuant to labour, services, or materials supplied.

CONSTRUCTION LOAN
A short term loan made to a builder for construction of buildings, usually to be paid out by another mortgage upon final completion. Also, a description used in reference to a mortgage which is advanced in pre-determined stages, according to the amount of work completed.

CONSTRUCTION LOAN AGREEMENT
An agreement between a lender and a builder setting out terms of an agreement - loan amount, rate, method of drawing funds, conditions for advancing.

CONVENTIONAL MORTGAGE
A mortgage loan which does not exceed 75% of the lending value of the property. Mortgages that exceed this limit must be insured by CMHC (or similar insurance provider).

CONVEYANCE
The transfer of property ownership. Also, the written instrument whereby such transfer is effected. Conveyance includes a mortgage, charge, and lease, etc.
CO-OPERATIVE
The ownership of a separate amount of space in a multiple dwelling or multiple-occupancy building with proportioned tenancy in common ownership of common elements. Used jointly with other owners, however, the owner does not have clear title to a specific unit, but becomes a shareholder of the corporation which owns all the property and occupies by way of a tenancy agreement subject to shareholders agreement administered by an elected board of directors.

COVENANT
An agreement contained in an instrument creating an obligation. It may be positive, stipulating the performance of some act. It may be negative or restrictive, forbidding the commission of some act.

CROSS-COLLATERALIZATION

A reference to security involving various liens held in support of one or more advances made by a lender to a borrower.

CUSTOMER WALK THRU

This occurs 1 day after Internal Acceptance and 2 days prior to Home Delivery. The Customer Walk Thru is a scheduled meeting with the Homeowner facilitated by the assigned Orientation Rep. This meeting provides the Homeowner an opportunity to view their home prior to Home Delivery. Any corrective items identified by the Homeowner are documented and resolved prior to Home Delivery. Note: Since the home is to be 100% complete by Internal Acceptance, there should be no or few items identified.

CWM (Construction Welcome Meeting)
The CWM is a scheduled meeting with the Homeowner to introduce their assigned Field Manager. The homeowner is educated on the construction process and expectations are set. Options and schedules are reviewed as well as lot orientation, set-backs, utility placement, easements, etc.

DESIGNER HOME

When construction begins on a home but it has not been purchased yet, it is referred to as a “designer home".

DAMAGES
Compensation or indemnity for loss owing to breach of contract.

DATE OF COMPLETION
The date specified by an agreement of purchase and sale, when the purchaser is to deliver the balance of money due and the vendor to deliver a duly executed deed.

DEBT SERVICE
The amount of principal and interest payments made under a mortgage.

DEED
A document signed by the seller and purchaser transferring ownership. This document is then registered against the property

DEED RESTRICTION
A restriction in a deed to limit or govern the use of the land.

DEFAULT
Failure to fulfil an obligation

DEFERRED INCOME
An accounting method of dealing with income that is received but not included in a statement of earnings as normal earnings.

DEFICIENCY
An insufficient payment, often relating to an amount recovered under a power of sale or foreclosure action.

DELAYED PARTICIPATION LOAN
Where a lender disposes of a loan to several other participants putting up their respective shares later.

DEMAND NOTE
Payment is made on demand, usually within a few days notice to the borrower.

DEPOSIT
Payment of money or other valuable consideration as pledge for fulfilment of contract.

DEPRECIATION
A loss in value due to any cause.

DEPRECIATED REPRODUCTION COST
Appraisal method by which the cost of replacing a structure, minus depreciation, gives the depreciation reproduction costs.

DISCHARGE OF MORTGAGE
A document executed by the mortgagee, and given to the mortgagor when a mortgage loan has been repaid in full before, at, or after the maturity date.

DISCLOSURE STATEMENT
A statement contained in a consumer credit transaction in order to disclose complete credit terms and interest rates.

DISCOUNT
Reduction in product price or cost of a service. A discount if the difference between the nominal face value of a loan and actual cash received by the borrower because interest is paid at the beginning of a loan based on the sum to be repaid at maturity.

DISCOUNTED CASHFLOW ANALYSIS
This is a method of analysis that calculates the true value of an investment in terms of the present value, i.e. what the investment ifs worth now, although it is spread over a number of years. To compensate for future earnings a discount factor is added in so that a real comparison can be made between an investment with quick return and one that is placed over a number of years.

DISCOUNTED LOAN
The face value of the loan minus the interest or discount charged by the lender is the amount actually advanced to a borrower.

DOMINANT TENEMENT
The estate which derives benefit from an easement over a subservient estate, as in a Right-of-Way.

DOWER INTEREST
A wife's interest in the lands of her husband accruing to her by virtue of the marriage.

DOWNSIDE LEVERAGE
Occurs where the debt service on a mortgage exceeds the yield on an investors' property, thereby reducing cash flow.

DRAWEE
The person, bank, or corporation on whom a bill, note or cheque is drawn from and from whom payment is expected by the payee or his assignee.

DRAWER
The person or corporation who writes a cheque or note for payment to a third party. In the case of a bill of exchange, the drawer is the creditor and is usually the payee. 

EARNEST MONEY

A portion of the down payment delivered to the seller or an escrow agency by the purchaser of real estate with a purchase offer as evidence of good faith.

FHA (Federal Housing Administration)

A division of the Department of Housing and Urban Development. Its main activity is the insuring of residential mortgage loans made by private lenders against loss in the event of a foreclosure. It sets standards for construction and underwriting. FHA does not lend money, nor plan, nor construct housing.

HOME DELIVERY

The Home Delivery was formally known as the NHO (New Home Orientation) and FSO (Final Sign Off). The Home Delivery is a scheduled meeting with the Homeowner facilitated by the assigned Orientation Rep. The Orientation Rep will conduct a feature, function, benefit demonstration of home components and review manufacturer care and maintenance suggestions. The service process and warranty guidelines are explained as well as the 1-5-11 Month Visits (as described below.)

HOME SITE
The home site is the location of your new home; the property it will sit on.

INTERNAL ACCEPTANCE

This occurs 8 days after QPR8 and 1 day prior to the Customer Walk Thru. The Internal Acceptance is conducted by the Operations Manager and Customer Service Manager. The Managers will conduct a review of the home and sign an internal document representing that the home is 100% complete and ready for the Customer Walk Thru. If one or both Managers feel that the house is not 100% complete, the homeowner will be notified of a rescheduled Customer Walk Thru date.

MASTER PLANNED COMMUNITY

A suburban plan that includes homes and commercial, work, educational and community facilities.

Mortgage
A legal instrument that conveys an interest in real property given as security for the payment of a debt. In some states, a Deed of Trust or Deed to Secure Debt is used in place of a mortgage.

Mortgage Insurance
Insurance which protects the lender against loss which could result from a mortgage default.

Options

You may choose other options beyond the standard features for your new home, and these features are in addition to the base price. Each home collection has a list of options, such as a specific type of appliance, flooring, or windows that you may select to create the perfect home for you

PDO (Pre-Drywall Orientation)

The PDO (Pre-Drywall Orientation) is a scheduled meeting with the Homeowner, your Field Manager, and your Orientation Rep to establish quality expectations. This will be the first introduction of the Orientation Rep to the Homeowner. The Field Manager will educate the Homeowner on the construction process to include a demonstration of behind the wall features combined with function and benefit. The Orientation Rep will explain the QPR (Quality Performance Review) process.

Purchase and Sales Agreement
A written agreement between competent parties stating terms and conditions of a sale for mortgage loan purposes on real estate.

QPR 3 (Quality Performance Review)

QPR is the acronym for Quality Performance Review. The QPR 3 is a Team walk facilitated by your Field Manager and involves your Orientation Rep, other Field Managers and TradePartner Foremen. This walk will begin the Orientation Rep’s responsibility to the process through Home Delivery and include a review of the exterior and interior features of the home.

QPR 8 (Quality Performance Review)
The QPR 8 is a team walk facilitated by the assigned Orientation Rep and involves the Field Management Team. The purpose of this walk is to prepare the home for review by the homeowner at the Customer Walk Thru. Field Managers are assigned to evaluate the quality throughout the home. Corrective items will be identified and resolved prior to the Internal Acceptance. The result is that the home is 100% complete by Home Delivery.

Rough-in Plumbing

In homes that have a basement, pipes are often placed in the basement of the home to give you the convenience of adding a bathroom at a later date. The addition of these pipes is called “rough-in plumbing.”

Standard Features

Standard features are options that are included in the base price of your new home. Examples include a specific type of appliance, flooring, or windows, and vary by home collection.

TITLE

The evidence of the right to or ownership in property. Title may be acquired through purchase, inheritance, gift, or through foreclosure of a mortgage.

TITLE COMPANY
The company that researches the title of the property and guarantees that the research is correct, provided a title policy is issued.

UNDERWRITING

The process of analyzing the loan application and supporting information to decide whether the loan is acceptable and at what terms.

VA (Veterans Administration)

An independent agency of the federal government. The VA Home Loan Guaranty Program is designed to encourage lenders to offer long-term, low down payment mortgages to eligible veterans by guaranteeing the lender against loss in the event of a foreclosure

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