Buyers and Sellers Glossary of Real Estate Terminology:
You probably know MLS® stands for (Multiple Listing Service®), but do you know what that means? MLS® does not refer to a database or tool. The MLS® mark identifies professional services provided by a REALTOR® as part of a co-operative selling system.
Learn more about CREA’s trademarks on REALTOR Link®
The Trademark MLS®, Multiple Listing Service® and the associated logos are owned or controlled by The Canadian Real Estate Association (CREA), used under license, and identify the quality of services provided by real estate professionals who are members of CREA.
This one may seem obvious, but every REALTOR® in Canada should know the REALTOR.ca is owned and operated by the Canadian Real Estate Association (CREA) on their behalf. It is the number one real estate platform in Canada with MLS® System listings from across the country.
When consumers see the word REALTOR®, they know they have found someone they can trust. The “.realtor” trade mark domain is only available to members of CREA or the National Association of REALTORS®. It identifies their website as a credible source of real estate information.
The trademarks REALTOR® and REALTORS® logo are controlled by the Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.
The listing agent represents the home sellers and their best interest in the transaction. On the flip side, the buyer’s agent represents the home buyer.
Dual agency is when one real estate agent (or real estate brokerage) represents both the home buyer and the seller in a real estate transaction. There are limitations and requirements around dual agency that differ by province.
FSBO is an acronym for (For Sale By Owner), meaning the seller hasn’t retained the services of a professional agent to assist with the sale of their home. By virtue of the FSBO, the seller will avoid paying part of the real estate agent’s commission fee, which is split between the listing and buying agent.
However, if a real estate agent is representing the buyers, a commission fee could be requested by the buying real estate agent.
CURRENT MARKET ASSESSMENT
A Current Market Assessment (CMA) is provided by your real estate agent during the listing process and is usually complementary. This report assists with determining the asking price of the home using current housing market information such as supply and demand, seasonality, home information like location, age, square footage and more.
The MLS® (Home Price Index), is the most advanced and accurate tool to help REALTORS® gauge a neighborhood's home price levels and trends. With the MLS® HPI you can accurately analyze home price trends from the national level all the way down a local neighbourhoods. It gives you the insights you need to validate or revise your pricing recommendations, anticipate market changes, and compare home prices.
Preparing a home for sale to appeal to a wide range of home buyers. The staging process often includes decluttering, depersonalizing, deep-cleaning, and minor updates such as painting and rearranging furniture.
The appeal of a home when viewed from the curb. Curb appeal includes the home’s exterior, front yard, and anything else that is visible from the street.
“Freehold” means you are buying both a home and the land it is on. A single-family detached home, a semi-detached, a unit in a row house or a unit in a duplex can fit into this category. A form of ownership whereby you own the property and assume responsibility for everything inside and outside the home.
Unattached items in the home that can be removed without doing any damage to the property, such as curtains, but not the curtain rods since they are physically attached to the home. Chattels are usually not included with the home purchase, unless specified in the “Agreement of Purchase and Sale”.
Items that are physically attached to the home and require tools to remove. Fixtures are included as part of the purchase. Examples of fixtures included ceiling lights, cabinet hardware and built-in appliances. If the seller plans to take any fixtures with them when they move, either remove them prior to listing the home, or be sure to specify the fixtures in the “Agreement of Purchase and Sale”.
The price that the seller has agreed to list their property for. The asking price is different from the selling price, which is the final price that has been agreed upon by the buyer and seller.
An offer is a legal agreement to purchase a home. An offer can be conditional on a number of factors, commonly conditional on financing and a home inspection.
When the sale of the home hinges on predetermined conditions, such as “conditional on financing” or “conditional on a satisfactory home inspection”. If the conditions are not met, the buyer can back out of the deal.
When the original offer to purchase a home is rejected by the seller, the seller can counteroffer with adjustments, usually to the price or terms of the purchase, such as the closing date.
The difference between the listing price of a home and the final selling price, expressed as a percentage. If the list-to-sale-price ratio is more that 100%, the home sold over asking. If it is below 100% the home sold under asking.
Depending on the price of a home and the market conditions, you should factor an up-front deposit into the cost of buying a home. The deposit acts as a security measure to ensure you do not lose the home to another interested buyer. The deposit also acts as assurance to the seller that you are serious about the purchase. If you are required to pay a deposit, it will become part of your down payment once you have purchased the home. There is no standard deposit amount, but your real estate agent can advice you on this based on the home’s asking price and the market conditions.
The date your purchase transaction is completed, and you take ownership of your home.
This is the final step in the home selling process. Once all offer conditions outlined in the “Agreement of Purchase and Sale” have been met at the end of the closing period, ownership of the property is transferred to the buyer and the keys are exchanged on the closing date outlined in the offer.
The cost associated with “closing” the purchase deal. These costs can include legal and administrative fees related to the home purchase. Closing cost are additional to the purchase price of the home. (also see on this website under: “What will it cost to sell your property” - under 'SELLER").
In a balanced market, there is an equal balance of buyers and sellers in the market, which means reasonable offers are often accepted by sellers, and homes sell with a reasonable amount of time and prices remain stable.
In a seller’s market, there are more buyers than there are homes for sale. With fewer homes on the market and more buyers, homes sell quickly. Prices of homes are likely to increase, and there are more likely to be multiple offers. Multiple offers give the sellers negotiating power, and conditional offers may be rejected.
In a buyer’s market, there are more homes on the market than there are buyers, giving the limited number of buyers more choice and greater negotiating power. Homes may stay on the market longer and prices can be stable or dropping.
A short-term loan designed to “Bridge” the gap for home buyers who have purchased their new home before selling their existing home. This type of financing is common in a seller’s market, allowing home buyers to purchase without having to sell first.
Protection for mortgage and title fraud as gap coverage between when a title search is conducted and when the closing documents are registered.
Title insurance is not mandatory in Canada but is highly recommended to protect both the buyer and the mortgage lender against losses related to the property title or ownership, such as unknown title defects, existing liens against the property’s title, encroachment issues, title fraud errors in surveys and public records, and title-related issues that could prevent you from selling, leasing, or obtaining a mortgage.
Your lawyer can advise you on this.
LAND TRANSFER TAX
This is the tax payable by the buyer to the province in which the transaction occurred upon transferring land. The amount varies depending on the municipality, the size of the land and other factors. Most provinces have Land Transfer Tax, though it may have a slightly difference name (such as property purchases tax).
If you are a first-time home buyer, you may be eligible to receive a rebate, which is typically processed at the same time as the land registration, so they can be offset.
A land survey will identify the property lines. This is not required to purchase a home, but it is recommended and may be required by the mortgage lender to clarify where on the property the owner has jurisdiction. This is important if issues arise between neighbours or the municipality, should the owner wish to make changes in the future such as installing a pool, fence or other renovations involving property lines.
This annual fee, imposed by the local government, pays for services like public education, local police, and libraries.
This is a form of property insurance protecting you financially in the event of damages or losses to your home and its contents. In most cases, you can include these payments in your monthly mortgage payments.
The home inspection is performed to identify and existing or potential underlying problems in a home. This not only protects the buyer from risk, but also gives the buyer leverage when negotiating a reduced selling price. Even if the home appears to be flawless, many home buyers arrange a home inspection as a condition of their purchase.
Hiring a professional to inspect the overall condition of the home can cost a few hundred dollars but can reveal any serious defects.
A qualified professional provides a market value assessment of a home based on several factors such as property size, location, age of the home, etc. This is used to satisfy mortgage requirements, giving mortgage financing companies confirmation of the mortgaged property’s value.
NEW HOME WARRANTY
A warranty that protects the homeowners against future problems with the home for a determined period of time. New home builders are required to offer warranty protections to home buyers, such as “TARION” in Ontario. Home warranty requirements and providers differ by province.
Remember when documents had to be signed with a pen? Digital or electronic signature programs allow clients to sign documents from anywhere with just a few taps on their smartphone or tablet.
Be Prepared, Stay Informed!
When you’re ready, choose wisely!
DISCLAIMERS: All information displayed is believed to be accurate but is not guaranteed and should be independently verified. No warranties or representations are made of any kind.