Real Estate Terms

Adjustment DateDate agreed to by both parties to a real property transaction for the adjustment of property taxes, rent, interest, and other items.
AmortizationThe period of time required to reduce a debt to zero when payments are made regularly. Amortization periods are most often 15, 20, or 25 years long.
AppraisalA process that determines the market value of a property.
ChattelsArticles of moveable personal property (i.e., dishwasher, fridge, dehumidifer etc.)
Clear TitleA title that is not burdened by liens or legal questions is considered to be clear.
Closing CostsVarious costs or expenses associated with closing a real estate transaction. Such costs can include paying for title insurance or appraisal fees. It is important to remember that these costs are over and above the purchase price of the property.
Closing DateThe date a buyer takes possession of a property title.
CMHCCMHC is an acronym for the Canadian Mortgage and Housing Corporation. A Crown corporation that administers the National Housing Act for the federal government and it encourages the improvement of housing and living conditions for all Canadians. CMHC also creates and sells mortgage loan insurance products typically required when a borrower has less than 25% equity or down payment and it must be paid in advance (or it can be added to the mortgage).
Commitment Letter / Mortgage ApprovalWritten notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.
Comparative Market AnalysisAn approach for estimating the value of a property by comparing the sales prices of similar properties that have recently sold.
Completion DateDate on which the purchaser's solicitor undertakes to the vendor (or his solicitor) that he will pay the balance owing to the vendor upon the Transfer of Title being accepted for registration.
Compound InterestInterest which, during the life of the loan, is charged or calculated at regular intervals and if not immediately paid (as in an interest only loan) will, in subsequent periods, earn interest itself (as in an interest accruing loan).
Conditional OfferAn Offer to Purchase that is subject to specified conditions, for example, the arranging of a mortgage. There is usually a stipulated time limit within which the specified conditions must be met.
Conventional MortgageA mortgage loan up to a maximum of 75% of the lending value of the property. Mortgage loan insurance is not required for this type of mortgage.
Condition PrecedentLegal term for a "subject to" clause. In contract law, a condition precedent calls for the happening of some event or the performance of some act before the contract shall be binding upon the parties.
CondominiumA structure containing two or more housing units. The interior space of each unit is individually owned while the remaining property (land, building, and other amenities) is owned in common by all the owners of the individual units.
Contract of Purchase and SaleA contract of purchase or sale of land which contains the obligations of the vendor and purchaser with respect to the purchase and sale.
ConveyanceThe process of transferring an interest in land from one person to another by way of a transfer document.
DeedA legal document, which is signed by both the vendor and the purchaser transferring ownership. This document is registered as evidence of ownership.
DepositA sum of money placed in trust by the purchaser when an Offer to Purchase is made typically. The real estate representative or lawyer holds the sum until the sale is closed, and then it is paid to the vendor.
Discharge of MortgageA document signed by the lender and given to the borrower when a mortgage loan has been repaid in full.
Down paymentThe portion of the house price the buyer must pay up front from personal resources, before securing a mortgage. It generally ranges from 5%-25% of the purchase price.
DuplexA building that is divided into two living units or residences, usually having separate entrances.
EasementA right acquired for access to or over, or for the use of, another person's land for a specific purpose, such as a driveway or public utilities.
EquityThe difference between a property's market value or purchase price and the debt incurred to purchase the property.
EncumbranceA judgment, mortgage or lien or any other claim which is registered against the title to land.
FHLIFirst Home Loan Insurance - This is a CMHC product of particular interest to people looking for their first home. It allows qualified first-time buyers to purchase a home with as little as 5% down. In these cases, CMHC will insure mortgages of up to 95% of the home's purchase price or the market value of the property, whichever is less. (Restrictions may apply. Contact your local lender.)
Fiduciary DutyA requirement that someone in a position of trust, such as a banker, real-estate agent, or title agent, must act in good faith and trust on behalf of a client.
FixturesA chattel attached to real property; anything which has become so attached to the land as to form, in law, part of the land.
ForeclosureA legal procedure in which the lender gets ownership of the property if the borrower defaults on the mortgage loan.
InterestThe cost of borrowing money for a given period of time. Interest is usually paid to the lender in instalments along with repayment of the principal loan amount.
Land TitleThe legal document conveying title to a property.
LeaseA written agreement between a property owner and a tenant. This agreement allows the tenant to use the property in exchange for rent, usually for a specified period of time. Vehicle leases are similar to leasing property because it is also a written agreement that allows the customer to use a vehicle in exchange for payments over a specified period of time. 
LienA legal hold or claim of a creditor on property owned by another party.
Maturity DateThe last day of the term of the mortgage agreement. On this day the mortgage loan must be paid in full or the agreement renewed.
MortgageA temporary and conditional agreement that stipulates the use of real property as collateral to a creditor for the guaranteed repayment of a loan. The mortgage incurs a rate of interest that varies according to term and other loan features.
Mortgage PaymentA regularly scheduled payment that is blended to include both principal and interest.
Multiple Listing Service (MLS)A database, provided by the Board of Realtors, which lists all properties in an area that are for sale or lease by realtors.
Offer to PurchaseA written contract setting out the terms under which the buyer agrees to buy. If accepted by the seller, it forms a legally binding contract subject to the terms and conditions stated in the document.
Option AgreementA document stipulating that, in exchange for a deposit, a specified individual is to be given the first chance to buy a property at or within a specified period of time. An option holder who does not buy at or within the specified period loses the deposit and the agreement is cancelled.
Possession DateIs the date of occupancy, use, or control of a property after signing all of the papers at closing and receiving the keys to the house.
Pre-Approved MortgageA process used by mortgage lenders to determine the loan amount they would give to a potential buyer based on an extensive review of the buyer's credit history. Lenders issue pre-approval letters to strengthen a buyer's position when bidding on a home, because it instils confidence in a seller that the buyer is able to obtain the money needed to purchase the property. 
Prepayment PrivilegesAllows the borrower to make voluntary payments on the mortgage loan, in addition to the regular, scheduled mortgage payments.
PrincipalIn mortgage terms, principal is the original balance of loaned money on an outstanding loan and fees, excluding interest. Also it is the remaining balance of a loan, excluding interest.
Property Disclosure StatementDisclosing all known facts that materially affect the value of a residential real property and are not readily observable to the buyer.
Property Purchase or Land Transfer TaxA toll paid to the provincial and/or municipal government(s) for transferring property to the buyer from the seller.
Realtor®A trademark name for a real estate representative who is a member of an organization of persons engaged in the business of buying and selling real estate, such as the Canadian Real Estate Association.  
RefinanceTo pay off a mortgage or other registered encumbrance and arrange for a new mortgage, sometimes with a different lender.
RenewalAt the end of a mortgage term, the borrower re-negotiates the loan for a new term.
Title SearchAn examination of public records to ensure that an owner of real property has the right to transfer ownership of the title. This type of search is designed to identify disparities in the chain of title, liens, problems with the legal description of the property, judgments against the owner, etc. 
Walk-throughThe buyer's final inspection of a property which is being purchased is called a walk-through. This final inspection generally takes place on the day of closing or one day prior to ensure all the conditions of the sale have been met.
WitnessAn individual who signs his or her name to a document for the purpose of attesting to its authenticity. For example, a witness is usually required to sign a deed, will or other legal document.
ZoningAn area or a region within city limits that is distinguished from adjacent areas by a distinctive feature or characteristic. Zoning usually pertains to the type of land uses that are permitted in the area. For example, a zoning ordinance might allow houses or apartments to be built, but not factories or warehouses. 
Tracey Anderson

Tracey Anderson

CENTURY 21 Bachman & Associates
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