Confused by the endless real estate terms and jargon you encounter while buying or selling your property? That’s why we created this real estate dictionary. We made note of the most frequent terms that come up during our everyday transactions with their definitions and compiled them into a list.

These terms are sorted in alphabetical order.

(Hint: Looking to quickly find a word? Hit CTRL + F on your keyboard and type in the word you’re looking for.)

A

• Amortization
  

Amortization is the gradual repayment of a loan, like a mortgage, through regular payments that cover both the loan amount (principal) and the interest. Over time, the loan balance decreases until it’s fully paid off.

• Appraisal
  

An appraisal is the professional assessment of a property’s value, conducted by a qualified appraiser. It determines the fair market value, crucial for real estate transactions, mortgages, and insurance 

• Assessed Value

Assessed value is the estimated monetary value assigned to a property by a local government for taxation purposes. It serves as the basis for property tax calculations and can influence real estate pricing.

• Assignment Sale

An assignment sale occurs when a buyer transfers their rights and obligations of a pre-construction property purchase to another party before the property is completed. The original buyer doesn’t take possession but can profit from any price increase.

B

• Buyer’s Market
  

A buyer’s market is a real estate market condition in which there are more properties for sale than there are potential buyers. This gives buyers an advantage, often leading to lower prices and more favorable terms for purchasing properties.

• Bridge Loan
  

A bridge loan, also known as interim financing, is a short-term loan used to provide immediate funds for a real estate transaction. It’s often used to bridge the gap between the purchase of a new property and the sale of an existing one, helping the borrower cover costs until the sale is complete.

C

• Capital Gain

Capital gain refers to the profit earned from the sale of a capital asset, such as real estate or stocks, when the selling price exceeds the original purchase price. It’s subject to taxation, with rates varying based on factors like holding period and tax regulations.

• Closing Costs

Closing costs are fees and expenses, beyond the property price, incurred by buyers and sellers during the final stages of a Canadian real estate transaction.

• Condominium (Condo)
  

A condominium, commonly referred to as a condo, is a type of real estate property where individuals own and live in individual units within a larger building or complex. Condo owners also share ownership of common areas and amenities, and contribute to maintenance and management costs through condominium fees.

• Conveyancing
  

Conveyancing refers to the legal process of transferring ownership of a property from one party to another. It involves tasks such as title searches, document preparation, and ensuring all legal requirements are met for a smooth property transaction.

• Counteroffer
  

A counteroffer is a revised proposal made by the recipient of an initial offer during negotiations. It suggests new terms or conditions as an alternative to the original offer, initiating a back-and-forth process until both parties reach an agreement or decide not to proceed.

D

• Dual Agency

Dual agency happens when a single agent represents both the buyer and seller in a transaction, but it raises concerns about impartiality due to potential conflicts of interest.

• Down Payment
  

A down payment refers to the initial sum of money that a buyer pays upfront when purchasing a property. It constitutes a portion of the property’s total price and is separate from the mortgage, demonstrating the buyer’s financial commitment.

E

• Easement

An easement in Canadian real estate is a legal right that grants someone, who doesn’t own the property, the limited use or access to a specific portion of another person’s land for a particular purpose. This can include rights such as crossing a property for utilities or having a pathway to access a neighbouring area.

• Equity
  

Equity refers to the portion of a property’s value that the owner truly owns outright. It’s calculated by deducting the outstanding mortgage balance from the property’s current market value. As property value increases or mortgage debt decreases, equity grows.

• Escrow
  

Escrow in Canadian real estate involves a neutral third party holding funds or documents, like a deposit made by a buyer, until specified conditions of a transaction are met. This ensures security and compliance before finalizing the deal.

F

• Foreclosure

Foreclosure is a legal process through which a lender, typically a bank or financial institution, repossesses a property from a borrower who has defaulted on their mortgage payments. The lender then seeks to sell the property to recover the outstanding debt.

• Fixed-Rate Mortgage

A fixed-rate mortgage is a type of home loan where the interest rate remains constant for the entire term of the mortgage. This provides predictable monthly payments, making it easier for borrowers to budget over time, even if market interest rates fluctuate.

H

• Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit (HELOC) is a flexible loan that allows homeowners to borrow against the equity they’ve built in their property. It provides a revolving credit line, similar to a credit card, where homeowners can access funds as needed. The amount available is determined by the property’s value and the outstanding mortgage balance.

• Home Inspection
  

A home inspection is a professional evaluation of a property’s condition, conducted by a certified inspector. It assesses the structural, mechanical, and safety aspects of the home, helping buyers make informed decisions and identify potential issues before finalizing a purchase.

I

• Interest Rate

An interest rate refers to the percentage of the loan amount that a lender charges a borrower for borrowing money to purchase a property. It determines the cost of borrowing and affects the total amount repaid over the life of a mortgage.

L

• Land Transfer Tax

Land transfer tax is a provincial or municipal tax imposed when ownership of a property is transferred from one party to another. The amount is calculated based on the property’s purchase price and varies depending on the jurisdiction. It’s a one-time cost that buyers typically pay upon acquiring a property.

• Landlord
  

A landlord is the property owner who rents out a residential or commercial space to a tenant. The landlord is responsible for managing the property, ensuring it’s well-maintained, and collecting rent payments from the tenant.

• Lease Agreement

A lease agreement is a legally binding contract between a landlord (property owner) and a tenant. It outlines the terms and conditions of renting a property, including rent amount, duration of the lease, responsibilities of both parties, and other relevant details.

• Leasehold

Leasehold refers to a property ownership arrangement where a person owns the rights to occupy and use a property for a specified period under a lease agreement with the landowner. However, ownership of the land itself remains with the landowner.

• Lien

A lien is a legal claim placed on a property by a creditor as security for an outstanding debt. It gives the creditor the right to seek repayment from the property’s sale proceeds if the debt isn’t settled. A lien can affect the property’s transfer or sale until the debt is satisfied.

• Listing Agent

A listing agent is a licensed real estate professional who represents the property seller. They assist in marketing the property, setting the listing price, coordinating showings, and negotiating with potential buyers on behalf of the seller to achieve a successful sale.

M

• Market Value

Market value refers to the estimated price at which a property would likely sell between a willing buyer and a willing seller in the current open market. It is determined by various factors such as the property’s condition, location, comparable sales, and prevailing economic conditions.

• Mortgage Broker

A mortgage broker acts as an intermediary between borrowers and lenders. They help individuals or businesses secure mortgage loans by connecting them with suitable lenders and negotiating terms on their behalf. Mortgage brokers offer access to a variety of loan options and work to find the most favorable mortgage terms for their clients.

• Mortgage Insurance

Mortgage insurance is a coverage that lenders may require for borrowers with less than a 20% down payment, protecting lenders in case of borrower default and enabling access to mortgages with lower down payments.

• Multiple Listing Service (MLS)

MLS (Multiple Listing Service) is an online platform where real estate agents share detailed property information, aiding streamlined buying and selling processes and ensuring efficient access to property listings.

• Multiple Offers
  

Multiple offers refers to a scenario where several potential buyers compete by submitting offers for the same property, often leading to a competitive bidding process.

O

• Offer of Purchase and Sale

An Offer of Purchase and Sale is a formal legal document in Canadian real estate outlining a buyer’s proposed terms and conditions for purchasing a property, which, if accepted and signed by the seller, forms a binding contract between the parties.

• Open House

An open house in Canadian real estate is an event where a property for sale is made accessible to potential buyers for a specific period, providing them the opportunity to tour the property without an appointment. It allows buyers to assess the property’s features and condition and helps sellers generate interest and receive offers.

P

• Pre-approval

Pre-approval is an initial evaluation by a lender to determine the maximum mortgage amount a potential buyer qualifies for based on financial factors and creditworthiness, aiding informed property searches.

• Property Management

Property management involves the oversight and administration of real estate assets by a third party, including tasks such as tenant management, maintenance, rent collection, and property upkeep, to ensure optimal property performance and value.

• Property Tax

Property tax is a recurring fee imposed by local governments on property owners, based on the assessed value of the property. It funds essential public services and infrastructure within the community.

• Principal

Principal refers to the original loan amount borrowed to purchase a property, excluding interest. As mortgage payments are made, the principal decreases, and equity in the property increases over time.

R

• Real Estate Agent

A real estate agent is a licensed professional who assists buyers and sellers in property transactions. They provide expertise in pricing, marketing, negotiations, and legal procedures to help clients make informed decisions and successfully navigate the real estate market.

• Refinancing
  

Refinancing involves obtaining a new mortgage to replace an existing one, often to secure improved terms, adjust loan structures, or access funds for various purposes within the real estate context.

• Rent-to-Own

Rent-to-own is an arrangement where a tenant rents a property with the option to purchase it at a predetermined price within a specified timeframe. A portion of the rent paid may be applied towards the eventual purchase, allowing tenants to build equity while testing the property before committing to ownership.

S

• Seller’s Market
  

A seller’s market happens when demand for properties surpasses supply, benefiting sellers by potentially raising prices and speeding up sales. Basically, there are more buyers than there are properties available. 

• Short Sale

A short sale in real estate is when a property is sold for less than the outstanding balance of the mortgage, often with the lender’s approval. It can help homeowners avoid foreclosure, though it requires negotiation with the lender and may impact credit.

• Strata Corporation

A strata corporation is a collective of property owners within a multi-unit complex like a condo, responsible for overseeing common areas, maintenance, and shared expenses to uphold community standards and property value.

• Survey

A survey in real estate involves a professional assessment of a property’s boundaries, structures, and features, providing a detailed map that helps ensure accurate property descriptions, boundaries, and potential issues.

T

• Title Insurance

Title insurance in real estate is a policy that protects property owners and lenders from financial losses due to unforeseen title defects or ownership disputes, offering security and peace of mind throughout the property ownership journey.

• Title Search

A title search in real estate is a thorough examination of public records to confirm a property’s legal ownership, revealing any existing liens, encumbrances, or claims that might affect its sale or use.

U

• Underwriting

Underwriting in real estate is an evaluation conducted by lenders to assess a borrower’s financial stability, creditworthiness, and the property’s value, enabling informed decisions on mortgage approval and terms. 

V

• Valuation

Valuation in real estate is the professional estimation of a property’s monetary worth, considering various factors like location, condition, market trends, and comparable sales, aiding in informed decision-making for buying, selling, or financing.

• Variable Rate Mortgage

A variable rate mortgage in real estate is a loan where the interest rate may fluctuate periodically based on prevailing market conditions, potentially affecting monthly payments and the overall cost of the mortgage over time.

W

• Walk-through
  

A walk-through in real estate is a final inspection by the buyer before closing, ensuring the property meets agreed-upon terms. It allows for addressing any concerns before completing the transaction.

Z

• Zoning
  

Zoning in real estate involves local government rules that determine land use and development restrictions for different areas, guiding urban growth and maintaining community coherence.

If you need help understanding any of these terms, contact us today. Our Realtors can guide you through the jargon so that your deal is completed seamlessly. Reach out today!