AGREEMENT OF PURCHASE AND SALE/OFFER:
A legally binding, written document where the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions. Also known as the offer-to-purchase document or offer it is essentially the core of a real estate transaction. It itemizes the property being sold, when it is to be sold, at what price, and the terms and conditions to the sale and purchase of the property.
? Conditional Offer: An offer to purchase with cited conditions such as: “conditional on a satisfactory home inspection” or “conditional on arranging suitable financing”. For example, a buyer may insert a condition in the agreement that states that the offer is conditional upon the buyer securing financing.
? Firm Offer: An offer to purchase with no conditions. This the ideal type of offer for a seller.
? Multiple Offers: Buyer’s compete to purchase a home. Sellers set a specific date to accept offers and either reject, accept or ‘write-back’ or negotiate.
? Bully Offer: A buyer chooses to make an offer before the seller’s indicated offer acceptance date. The hope is that the seller will consider the bully offer without looking at other offers.
? Bidding War: When two or more buyers are vying for the same property. Their real estate agents act on their behalf to present different prices and conditions to the seller.
A professional estimate of the value of a home or property. The appraisal is performed by a certified appraiser on behalf of a lender (such as a bank) to ensure that the value of the property matches or exceeds the funds being loaned.
BUYERS REPRESENTATION AGREEMENT (BRA):
A written real estate contract that creates an agency relationship between a buyer and a real estate brokerage.
BUILDING LOCATION SURVEY OR REAL PROPERTY REPORT:
A professional plan that plots the location of a house and structure on a lot. It is required by most lenders, and is useful in detecting physical defects and understanding lot lines, lot size and shape.
The date that is fixed for taking possession of a property and/or completing the transfer of title documents and balance of the down payment.
The financial disclosure statement usually created by a lawyer that accounts for all of the funds received and expected at the closing, including deposits for taxes and mortgage life insurance.
A covenant is an agreement, pledge/condition or restrictions that may be included as part of an agreement and registered on title to the real property. For example, a builder may include a covenant that states that storage sheds cannot exceed a dimension of 10 feet by 12 feet.
A signed legal document bearing witness to a legal transaction, such as the purchase or sale of a property.
A payment made or disbursed by a professional like a lawyer. For example, a bank disbursement to pay for a mortgage. It may also include photocopies, courier charges and the like.
Most common with empty nesters and retirees, refers to looking for smaller real estate or alternate accommodations. Also used in situations involving seniors who are moving to support accommodations.
EASEMENT/RIGHT OF WAY:
Access granted to persons other than the owner on a property. For example, a utility company may have a right of way onto your property in order to maintain its power lines, or sometimes a neighbour may be able to use your driveway to access their rear yard parking area.
FAIR MARKET VALUE:
This is an estimate of how much a specific home will sell for in today’s market, taking into account what similar properties in the area have sold for recently.
An estate in which the owner has unrestricted power to dispose of the property as he wishes, including by will or inheritance. It’s the greatest interest a person can have in real estate.
Conducted by a real estate professional establishes the value of a prospective piece of real estate. Fair market value, current market conditions. Karen Paul & Associates are happy to provide a second opinion on the value of your home.
A technical inspection of a property by a certified home inspector to assess the state of the property and the building structure, and advise you of existing or anticipated problems with the property that may affect your purchase decision.
A legal document that confirms your insurance policy, policy number, and the lender. You’ll need to obtain proof of insurance for the property prior to closing.
An equal undivided ownership of property by two or more persons. Usually bound by a legal agreement drawn up by a real estate lawyer.
LAND REGISTRY OFFICE:
The office where all formal closing transactions take place, are logged and archived.
LAND TRANSFER TAX:
A tax imposed by the government and paid by the purchaser of a property on closing. The land transfer tax applies whenever a property is transferred from one owner to another. It is based on the selling price of the house. Check with your province or state if a Land Transfer Tax applies.
A legal hold or claim in property as security for a debt or charge.
?Exclusive Listing Agreement: The real estate agent will market the home without posting it on MLS.
?Multiple Listing Agreement: A multiple listing service that contains descriptions of most of the homes that are for sale. This computer-based service is used to keep up with properties that are listed for sale.
A designated period of time where a house or property is designated as ‘open’ for viewing by potential buyers. The real estate agent acts stands-in for the seller as host.
The point in a real estate transaction where the purchaser is able to take physical control of, and reside in, the property.
POWER OF ATTORNEY:
A legal document that allows you to designate your lawyer or a third party to sign and authorize documents on your behalf should you be unavailable. This may be useful during the period leading up to and including closing day, as well as in the long-term to ensure that your affairs can be taken care of by a person you trust in the case of your leaving the country or becoming disabled.
REAL ESTATE BOARD:
A non-profit organization representing local real estate Brokers/agents, salespeople, which provides services to its members and maintains and operates a MLS® system in the community.
Trademark identifying real estate professionals in Canada who are members of The Canadian Real Estate Association, and as such, subscribe to a high standard of professional service and to a strict Code of Ethics.
? Buyer’s Agent: the REALTOR® representing the buyer of the property. A prospective buyer would have signed a Buyer’s Representation Agreement with that agent.
? Seller’s Agent: The REALTOR® who is helping sell the property.
The purchase of an existing, previously-owned home. A resale transaction is substantially more involved than the purchase of a new home, as a resale home carries a history of ownership that must be reviewed by your lawyer.
A common fund into which all owners of units in a condominium property pay a regular fee for the maintenance of common elements.
This is a strategy where a home is purposely prepared so that it appeals to potential buyers. Staging may involve cleaning, de-cluttering, rearranging furniture, redecorating, and more.
A legal document provided by condominium corporations that attests to the physical and financial status of the corporation and a particular unit within it. After a tenant gathers and prepares the necessary information into this Estoppel Certificate, they are “stopped” from taking back or retracting the information contained within.
This is a document that defines the boundaries and measurements of your property and any structures on it.
An adjustment in the tax account for your property. In most transactions you will see some form of tax adjustment to account for any overpayments or arrears that may exist in the tax account at closing. For example, a seller may have paid taxes for the three months following closing. In that case, a tax adjustment equivalent to three months’ would be provided to the seller by the buyer upon closing.
TENANTS IN COMMON:
A tenancy in common, conveys no right of survivorship. When one co-tenant dies, the interest of the defunct co-tenant forms part of his or her estate and can be conveyed to a next-of-kin. Interest is preserved and can be left to anyone the testator wishes in his or her Will.
TENANT PROTECTION ACT:
A law that governs the relationship between a landlord and a tenant, as well as a landlord’s responsibilities to tenants and their leases. Even when purchasing a rental property that is new to you, you are bound by this law, which covers leases, rental costs, and more.
A legal document that identifies a property and the owner of that property. A lawyer searches all archived titles to your property in order to ascertain whether the property’s title is free and clear and can be sold as stated.
? Freehold Title is an interest in land that gives the holder full and exclusive ownership of the land and building for an indefinite period.
? Leasehold Title is an interest in land that gives the holder the right to use and occupy the land and building for a defined period.
A no-fault insurance policy that protects you against any current or future claims to the title of your property. Title insurance, along with your lawyer’s Search of Title, is designed to protect you from risks such as someone else making a claim to title of your property.
This list of real estate definitions was updated December, 2016 with assistance from the Canada Mortgage & Housing Corporation. If there is an error or omission, please contact the offices of Karen Paul & Associates.