Whether you are in the process of buying or selling property, “Realtor” is not the easiest language to speak. From prequalifying for a mortgage to receiving the keys at closing day, you will likely hear all kinds of real estate jargon. While some terms are self-explanatory, others can often add layers of confusion to an already intricate process.
Your Realtor will always be there to help you navigate the market’s terminologies but doing your due diligence will help put you on the path to success. We’ve pulled together a comprehensive list of real estate-specific terms and definitions you should know when entering the Canadian real estate market.
KEY REAL ESTATE TERMINOLOGY
ADJUSTMENT DATE | The date when any adjustments are made for things like maintenance fees, property taxes, and so on (when applicable). They are divided depending on each party’s share of the cost and are included as a debit or credit on the statement of adjustments prepared by a lawyer or notary.
ASKING PRICE | The amount of money asked by a seller for their property.
ASSESSED VALUE | BC Assessment Authority determines the assessed value of a real estate property in BC. Our local municipalities then use assessed values to determine the amount of property taxes.
APPRECIATION | The amount a home’s value increases over time.
ASSIGNMENT | When the seller of a property signs over its rights and obligations to a buyer before the official closing.
COMPLETION | The final stage of a real estate transaction, including the signing of the title documents, calculations of adjustments, and disbursements. Both the buyer and seller must agree on a completion date when the property will be legally transferred from seller to buyer.
CLOSING COSTS | Term that encompasses all fees and taxes paid on or before the closing date, which may include home insurance, property transfer tax, mortgage penalties, disbursements, legal fees, GST, and more. Your closing costs may vary based on your lender, the size of your loan, and whether you’re paying in cash, but a good rule of thumb is to calculate 2-4% of the final home sale price.
COMMISSION | The fee paid for services as an agreed fee or percentage of the sale price or property lease.
CONDITIONAL OFFER | An offer that beyond setting out the terms of the sale such as the purchase price, the date of closing, the names of the parties, and the amount of any required deposit, includes conditions that must be met within a specified period for the contract to be valid. Examples of conditions would be a satisfactory home inspection or financing acceptable to the buyer.
CONVEYANCE | The transfer of an interest in a property from one individual to another through written documentation to affect such a transfer.
CONVEYANCING| The formal process of transferring the legal title of land and recording interests in the land, using the prescribed Land Titles forms. This process is handled by a lawyer or notary public.
COOPERATIVE HOUSING | When individuals own shares in the corporation but do not own the actual units. Each person’s number and/or type of shares dictate the size of the unit they can occupy. The details on their occupancy rights are provided under a tenancy agreement with the corporation.
COURT-ORDERED SALE | Property that is ordered for sale by the B.C. Supreme Court. This usually happens when the owner is unable (or unwilling) to repay a mortgage on their property, or a “Conduct of Sale” has been ordered due to other circumstances.
FIDUCIARY DUTY | A legal duty requiring a real estate professional to act in the client’s best interests at all times.
FIXTURES | An improvement or personal property item attached to the real property or building. Whether an item is considered a fixture depends on the specific circumstances of a property, especially on the method of how the item is affixed to the property.
FOREIGN BUYER’S TAX | If you’re a foreign national, foreign corporation, or taxable trustee, you must pay the additional property transfer tax on your proportionate share of a residential property’s fair market value if the property is within specified areas of British Columbia. Learn all the details on this tax on the Government of B.C.’s website.
FORM B | This Information Certificate discloses a variety of important information about a strata lot and the strata corporation. Potential buyers can request it to learn more about the strata maintenance fees, current contingency reserve fund, strata lot numbers, and more.
FRACTIONAL OWNERSHIP | A form of ownership in which more than one individual possesses fee simple title to a property.
FREEHOLD | When the owner “owns” the property and has full use and control over the land and buildings over it. The freehold is still subject to any rights of the Crown, local bylaws, and any restrictions at the time.
HOME/PROPERTY INSPECTION | Performed by property (home) inspectors who provide an opinion on the property’s condition as of the date of the inspection through a visual examination of any accessible interior and exterior spaces. The purpose of a property inspection is to look for signs that there may be problems with the property and to suggest any areas that should be looked at further by an expert.
JUDICIAL SALE | The sale of real property that is conducted under the authority and supervision of the Court.
LAND SURVEY | The legal written and/or mapped description of the location and dimensions of a land plot.
LAND USE BYLAW | General rules applicable to all land use classifications in a municipality, such as Residential, Commercial, Industrial, and Special district classifications.
LEASEHOLD | A type of homeownership where a person (the lessee, or leaseholder) purchases from the owner of a building or a lot (the lessor or leasehold landlord) the right to occupy a premise (either an apartment suite or a house) for a long-term, fixed period. In B.C., you may also find a long-term lease referred to as a “99-year lease”.
LEAKY CONDO | The term refers to an issue with the design of condos built in the Greater Vancouver area during the 1980s and 1990s (though not limited to this time). In “Leaky Condos”, which are typically wood-frame, moisture remains in the wall cavity, causing mould, rot, and many other structural issues over time.
MARKET SHORTAGE | When the demand for a product or service within a specific market exceeds the quantity supplied at the current price. In real estate, this phenomenon is also known as a seller’s market.
MARKET SURPLUS | When the quantity supplied of a product or service within a specific market exceeds the demand at the current price. In real estate, this phenomenon is also known as a buyer’s market.
POSSESSION DATE | The official date when the purchaser has the right to move into their new property.
PROPERTY TAXES | The annual amount charged to each property owner by the municipality where the property is located. The total amount will be based on the property’s assessed value in relation to the current municipal tax rate for that type of property.
PRE-QUALIFIED | Getting pre-qualified for a mortgage means that you have submitted all requested information to a lender and have been given an estimate of the amount you can borrow. This does not represent a lending commitment or pre-approval.
PRE-APPROVED | Document that states the commitment and exact loan amount provided by the lender.
PREPAID LEASE | When a property’s rent has been paid for the term of the lease agreement before the date of the lease is registered or will be paid within one year of the date the lease is registered.
PROPERTY TRANSFER TAX | Tax issued when fee simple is transferred. The purchaser is subject to paying 1% of the fair market value up to and including $200,000; 2% of the fair market value greater than $200,000 and up to and including $2,000,000; and 3% of the fair market value greater than $2,000,000. See a list of all possible exemptions here.
STRATA | In British Columbia, this term refers to a condominium and/or collective of homes. Being part of a strata will usually make the property owner liable to strata management fees.
SURVEYING | The technique of determining and recording the measurements of boundaries and elevations of land or physical structures.
TAX CREDIT | The amount of money that a taxpayer can subtract from the owed tax. Its value will depend on what the credit is being provided for, and certain types of tax credits are granted to individuals or businesses in specific locations, classifications, or industries.
TITLE SEARCH | A document that lays out information on what is registered to the property, including mortgage(s), easements, and more.
VALUATION | Synonymous with evaluation, this is the process whereby the value of a property is estimated or determined through various means.
ZONING | General rules applicable to all land use classifications in a municipality (e.g. Residential, Commercial, Industrial, and Special district classifications).
Do you still have questions? Reach out to one of our specialized agents! With thousands of homes sold over the past 25+ years, Momentum offers uncompromised service to anyone interested in buying or selling real estate.