Understanding the real estate world can be a constant challenge, Luckily, I’m a generous person and I’m happy to give you the meaning of some basic terms so that you can impress your friends during your next night out. Just try to use these terms before enjoying some adult beverages, as slurring your words may hinder the effectiveness. Here is a list of some of the most common real estate terms for each and every (okay, most of them) letter of the alphabet. I know, it’s a little bit like school and really, that is very true. As a Realtor it’s important for me to stay up-to-date and continually educate myself on all aspects of the industry including changes to anything related to the buying or selling of property.
Enjoy!
Accrued Interest The amount of unpaid interest that has collected since the late payment date.
Agreement of Purchase and Sale This is the written contract outlining the terms and conditions that the purchaser and vendor have agreed upon as a contract to buy property.
Appraisal VS. Market Evaluation An appraisal is what an appraiser thinks your property is worth and what it may be listed for. A market evaluation is the value of what your property could sell for under normal conditions based on the sales of similar comparable homes in a certain time-frame.
Balance Due on Completion In order to complete the purchase, this is the amount of money the purchaser has to pay the vendor after all adjustments have been completed.
Buydown A sum of money in the form of a payment from any source that causes the lender to drop the interest rate during the mortgage term.
Closed Mortgage A mortgage that does not provide options for speeding up the repayment term through bulk payments or an increase in the payment frequency.
Conditional Offer This is a mutually agreed upon condition of sale between the buyer and seller. There may be a set of conditions that must be met by a specified time frame.
Date of Completion (also the Closing Date) This is the date when the purchaser has agreed to deliver the balance of money due and the vendor delivers a duly executed deed. It is also the date the buyer takes possession of the home.
Deed The signed document between the seller and buyer that transfers ownership.
Deposit Money or other valuables used as a pledge to fulfill a contract. In other words, when you purchase a house, the amount of your deposit will impact on the size of the mortgage you will require to cover the balance of the cost of the property.
Exclusive Listing VS. MLS Listing An exclusive listing is property for sale that is not added to the MLS system. It can be viewed by a smaller number of people, generally in the same real estate company or on an exclusive group viewing system. Sales of these properties are often the result of referrals. An MLS listing gets posted online within the Multiple Listing Service which gives any and all real estate companies and members of the general public access to the listing.
FINTRAC The Financial Transactions and Reports Analysis Centre of Canada have the role of tracking and monitoring all financial transactions. They identify and prevent illegal funding activities from happening such as those commonly associated with terrorist activities.
Freehold This is the oldest and most common type of real estate ownership where a tract of land on which a building is located is owned.
Hold Back A retained amount of money by a construction lender or owner until work performed by a contractor has been completed.
Irrevocable Something that cannot be altered, changed, revoked or recalled.
Joint Tenancy Land that is owned by two or more persons and on the death of one, the whole estate is taken by the surviving members.
Kicker An additional payment or bonus paid over and above the fixed interest already paid to an investor.
Lien A legal claim against a property for outstanding monies owed. It is not entirely uncommon to see a lien put against property. When this happens, it has an effect on the selling of that property.
Maturity Date The final day of the mortgage agreement term. This is the date when the mortgage must be paid in full or when the mortgage is renewed.
MPAC This is the Municipal Property Assessment Authority. An independent, non-profit corporation funded by all Ontario municipalities. The MPAC assesses and classifies all properties in the province.
Net Rate of Interest The mortgage lender receives this interest rate net of service fees deducted.
Option The right to buy certain property within a limited time frame given by the property owner to another party.
Pre-Payment Clause A requirement in a mortgage that gives the mortgagor the option of paying part or all of the mortgage debt prior to the maturity date.
Pre-Qualification A client interview used to determine the applicant’s qualifications for a mortgage.
Quit Claim Deed This is a release of all rights or claims to a particular piece of property.
Realtor Vs. Real Estate Agent
The word realtor is actually a trademark. A realtor is a member of the Canadian Real Estate Association (CREA) and must abide by the code of ethics and all manners of professionalism as dictated by the group. A real estate agent is not a CREA member but is someone who has been licensed to sell real estate – with several restrictions.
Second Mortgage A granted mortgage loan against a property where there is already a first mortgage registered.
Take-Back Mortgage This is a type of mortgage where the buyer borrows money from the seller to purchase the property for sale.
Title The legal documentation that proves the owner of land has lawful ownership of it.
Underwriter The person employed by a mortgage broker or lender who approves or turns down loan applications.
Variable Interest Mortgage This is a mortgage loan that has an interest rate that may vary during the term.
Waiver The act of relinquishing a right or interest in something.
Zoning Regulation of character, use and additional elements related to the look, appearance and all other factors related to the property in the location where it exists.
Okay, So I Skipped A Few Letters!
As you can tell, there are a lot of real estate terms to know and understand and this is just a short list. For assistance with them and others, you can call me for some help.
I’m Jen Bedard and in the Niagara Region you can reach me at 289-213-7031.