• Amortization: The process of paying off a mortgage loan through regular payments over time.
• Agent: A licensed real estate professional who assists buyers or sellers in real estate transactions.
• Adjustment Date: The date when financial adjustments, like property taxes and utilities, are made between the buyer and seller, typically on the closing date.
• Appraisal: A professional estimate of the property's market value, required by lenders to assess the loan amount.
• Assumption of Mortgage: When a buyer takes over the seller's existing mortgage, subject to lender approval.
• Assignment Sale: A sale in which the buyer of a pre-construction property sells their rights to purchase the property before the actual closing.
• Balance Due on Closing: The total amount the buyer must pay at the closing of the sale, after deducting the deposit and mortgage financing.
• Broker: A licensed individual or firm that manages real estate transactions and often supervises agents.
• Builder’s Warranty: A guarantee provided by the builder for a newly constructed property, covering potential defects or structural issues for a specific period.
• Blind Bid: A bid submitted for a property without knowledge of other competing offers.
• Buyer’s Market: A real estate market condition where supply exceeds demand, giving buyers an advantage in negotiations.
• Buyer's Agent: A real estate agent who represents the interests of the buyer in a transaction.
• Chattels: Movable personal property that is included in the sale of a property, such as appliances and furniture.
• Closing: The final step in a real estate transaction where ownership of the property is officially transferred from the seller to the buyer.
• Closing Costs: Additional fees beyond the purchase price that buyers incur at closing, including legal fees, land transfer taxes, and title insurance.
• Comparable Sales (Comps): Recently sold properties similar to the one being assessed, used to determine its market value.
• CMHC (Canadian Mortgage and Housing Corporation): A Crown corporation that offers mortgage default insurance for high-ratio mortgages (those with less than a
20% down payment).
• Condition Precedent: A clause in an agreement that stipulates certain conditions must be met before the deal proceeds, such as securing financing.
• Deposit: The initial payment made by the buyer when submitting an offer, held in trust until closing.
• Down Payment: The percentage of the property’s purchase price paid by the buyer upfront, usually between 5-20%.
• Deemed Rent: A theoretical rental income that a property could generate, often used in tax assessments or income property evaluations.
• Due-on-Sale Clause: A provision in a mortgage contract requiring the borrower to pay off the loan in full if the property is sold.
• Deed: A legal document that transfers ownership of a property from one party to another.
• Escrow: A third-party service that holds funds and documents until all conditions of a sale are met.
• Equity: The difference between the market value of a property and the outstanding mortgage balance.
• Estoppel Certificate: A document confirming the current status of a property,including any disputes or liabilities, often used in condo sales.
• Equity Take-Out: The process of borrowing against the equity in a home, often used for renovations or investments.
• Fixed-Rate Mortgage: A mortgage where the interest rate remains the same throughout the term.
• First-Time Homebuyer Incentive: A government program in Canada that helps first-time buyers by providing shared equity for their down payment.
• Flipping: The practice of purchasing a property at a lower price, renovating it, and reselling it for a profit in a short time frame.
• Foreclosure: The legal process where a lender takes ownership of a property when the borrower fails to make mortgage payments.
• Fair Market Value: The price a property is likely to sell for in an open market between a willing buyer and seller.
• Good Faith Deposit: A portion of the deposit paid by the buyer to demonstrate their intent to follow through with the purchase.
• Government-Backed Mortgage: Mortgages insured by government agencies like CMHC to support borrowers with lower down payments or higher-risk profiles.
• Gross Debt Service (GDS): A ratio that measures the percentage of a borrower’s income spent on housing costs, used by lenders to assess affordability.
• Growth Cap: A limit on how much a property’s value can increase over a set period, often found in rent-controlled properties or condo development agreements.
• Home Inspection: A detailed examination of a property’s condition, typically required by the buyer before completing the purchase.
• Homeowner’s Insurance: Insurance that protects against loss or damage to a home, often required by lenders.
• Hard Money Loan: A short-term loan secured by real estate, often used for property flips or quick purchases.
• Heat Recovery Ventilator (HRV): A ventilation system used to maintain indoor air quality while reducing energy consumption, commonly found in new homes and
condos.
• Interest Rate: The percentage charged by a lender for borrowing money, affecting the cost of the mortgage over time.
• Investment Property: Real estate purchased primarily for income generation, either through renting or capital appreciation.
• Incentive Programs: Government or lender programs designed to help specific groups, such as first-time homebuyers or those purchasing in underserved areas.
• Imputed Rent: An estimate of the rent that would be paid for a home if the homeowner were renting it, used in economic analysis and taxation.
• Joint Tenancy: A form of property ownership where two or more individuals share equal ownership and have rights of survivorship (if one owner dies, their share goes
to the surviving owner).
• Joint Ownership: A shared ownership arrangement where two or more individuals hold legal title to the property.
• Joint Liability: A situation where multiple parties share responsibility for a debt, such as a mortgage, and are equally liable in case of default.
• Kickback: An illegal payment made to someone (usually an agent or broker) in exchange for facilitating a real estate deal.
• Key Money: An upfront payment made to gain access to a rental property, often seen in commercial leases.
• Lien: A legal claim against a property for unpaid debts, such as outstanding taxes or contractor bills, that must be settled before a property can be sold.
• Listing: A property that is listed for sale by a real estate agent.
• Land Transfer Tax: A provincial or municipal tax charged on the transfer of property ownership, often calculated as a percentage of the purchase price.
• Land Lease: A lease where the buyer owns the structure on the land but rents the land itself, common with mobile homes or certain condo units.
• Land Severance: The legal process of dividing a property into smaller parcels, often for development or sale.
• Mortgage: A loan used to purchase real estate, typically repaid over a period of 15 to 30 years.
• Mortgage Default Insurance (MDI): Insurance provided for high-ratio mortgages (those with less than a 20% down payment) to protect lenders in case of default,
often offered by CMHC.
• Mortgage Broker: A licensed intermediary who helps borrowers find a suitable mortgage lender and negotiate terms.
• Municipal Tax Assessment: An evaluation of the value of a property by a local government, typically used to calculate property taxes.
• Multiple Listing Service (MLS®): A database that real estate agents use to list properties for sale, providing detailed information on available homes.
• Negative Amortization: A situation where the payments on a mortgage are less than the interest due, causing the loan balance to increase over time.
• Non-Resident Buyer: A buyer who does not reside in Canada. Some provinces impose additional taxes or restrictions on non-resident buyers.
• Net Worth: The total value of an individual’s assets minus their liabilities, used in financial assessments and mortgage applications.
• Open Mortgage: A mortgage that allows the borrower to pay off part or all of the loan at any time without penalty.
• Offer to Purchase: A formal, written offer made by a buyer to purchase a property, outlining terms and conditions of the sale.
• Occupancy Permit: A permit issued by local municipalities indicating that a building is safe for habitation and meets all required codes and standards.
• Pre-Approval: A process where a lender evaluates a borrower’s financial situation to determine how much they are eligible to borrow.
• Principal: The original amount of money borrowed in a mortgage, excluding interest.
• Private Mortgage Insurance (PMI): Insurance for high-ratio mortgages, commonly required when the borrower’s down payment is less than 20%.
• Power of Sale: A process in which a lender sells a property to recover the balance of an unpaid mortgage.
• Principal Residence Exemption: A tax exemption that allows homeowners to avoid paying capital gains tax on the sale of their primary residence, under certain
conditions.
• Qualified Buyer: A buyer who has been approved for a mortgage loan by a lender, based on their creditworthiness and financial situation.
• Qualifying Rate: The interest rate used by lenders to assess a borrower’s ability to repay a mortgage, often set higher than the actual rate the borrower will pay.
• Realtor®: A real estate agent who is a member of the Canadian Real Estate Association (CREA) and follows its ethical guidelines.
• Refinancing: The process of replacing an existing mortgage with a new one, typically to secure a better rate or access home equity.
• Right of First Refusal: A clause in an agreement that gives a party (usually a tenant or current property owner) the first chance to buy the property if it is put up for sale.
• Renovation Mortgage: A type of mortgage that combines the cost of purchasing a home and the cost of any renovations needed.
• Seller’s Market: A market condition where demand for properties exceeds supply, giving sellers the advantage.
• Strata: A form of property ownership found in condominiums and townhouse developments, where individuals own their unit but share common areas.
• Strata Fees: Fees paid by condo owners to cover the maintenance and management of shared areas and amenities.
• Subject to Financing: A condition in an offer where the buyer must secure financing before the deal can proceed.
• Severance: The legal process of dividing a property into smaller parcels, often requiring municipal approval.
• Title: A legal document that proves ownership of a property.
• Title Insurance: Insurance that protects against defects in the title of the property, such as undiscovered liens or ownership disputes.
• Tenant Improvements: Modifications made to a rental property by the tenant to suit their needs.
• Transfer Tax: A tax imposed by the province or municipality on the transfer of real estate ownership.
• Variable-Rate Mortgage: A mortgage where the interest rate changes periodically, usually tied to a bank's prime rate.
• Vendors Take-Back Mortgage: A mortgage in which the seller acts as the lender and provides financing to the buyer for part of the purchase price.
• Valuation Certificate: A document issued by an appraiser that provides the market value of a property.
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