Real Estate Glossary: Key Terms You Need to Know

At GET Taylored Real Estate, we believe that knowledge is power. Understanding real estate terminology is essential to making informed, confident decisions in your buying or selling journey. Whether you're a first-time buyer, investor, or luxury homebuyer, this glossary provides clear definitions of commonly used real estate terms.

A - C

Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that changes periodically based on a benchmark interest rate.

Agreement of Purchase and Sale (APS): A legally binding contract outlining the terms and conditions of a real estate transaction between a buyer and seller.

Amortization: The process of paying off a mortgage loan over time through regular payments of principal and interest.

Appraisal: An unbiased professional evaluation of a property's market value, often required by lenders.

As-Is Condition: A property sold in its current state, with no repairs or improvements made by the seller.

Assessed Value: The value assigned to a property by a municipality for tax purposes.

Bridge Loan: A short-term loan that helps buyers cover the financial gap between buying a new home and selling their current home.

Broker: A licensed real estate professional who may own or manage a real estate office and supervises real estate agents.

Buyer’s Market: Market conditions where supply exceeds demand, giving buyers more negotiating power.

Closing: The final step in a real estate transaction where ownership of the property is transferred to the buyer.

Closing Costs: The fees and expenses paid at the end of a real estate transaction, including legal fees, land transfer taxes, and title insurance.

CMHC (Canada Mortgage and Housing Corporation): A government-backed institution that provides mortgage insurance to lenders for buyers with down payments of less than 20%.

CMA (Comparative Market Analysis): A detailed evaluation of a property’s value based on recent sales of similar homes in the same area. A CMA helps buyers and sellers understand fair market pricing before making an offer or listing a home for sale.

Comparable Sales (Comps): Recently sold properties similar to the one being evaluated, used to determine fair market value.

D - F

Debt-to-Income Ratio (DTI): A financial metric used by lenders to determine a borrower’s ability to manage monthly payments.

Deed: A legal document transferring ownership of a property from seller to buyer.

Deposit: A sum of money placed in trust when making an offer, showing the buyer’s commitment to the purchase.

Down Payment: The initial payment made by the buyer toward the purchase price of a home, typically between 5% and 20%.

Dual Agency: See Multiple Representation.

Easement: A legal right to use another person's property for a specific purpose, such as a shared driveway.

Encumbrance: A claim or lien on a property that may affect its transferability.

Equity: The difference between a home’s market value and the outstanding mortgage balance.

Fixed-Rate Mortgage: A mortgage with an interest rate that remains constant throughout the loan term.

Foreclosure: A legal process where a lender repossesses a property due to the borrower's failure to make payments.

Freehold: A type of homeownership where the owner has full rights to the land and property without limitations from a landlord or condominium board.

G - M

Gross Debt Service Ratio (GDS): A financial measure that calculates the percentage of gross income spent on housing costs.

Guarantor: A person who agrees to take financial responsibility for a mortgage if the borrower defaults.

Home Inspection: A professional evaluation of a property’s structural and mechanical condition.

Homeowner’s Insurance: A policy that protects against damages to a home and liability for accidents on the property.

Land Transfer Tax (LTT): A provincial tax paid by buyers upon purchasing a property in Ontario.

Lien: A legal claim against a property due to unpaid debts.

Listing Agreement: A contract between a seller and a real estate agent outlining the terms of selling the property.

Market Value: The estimated price a property would sell for in the current market.

Mortgage: A loan used to purchase real estate, secured by the property itself.

Mortgage Pre-Approval: A lender’s written confirmation of how much a buyer qualifies to borrow.

Multiple Representation: Occurs when a single brokerage or designated representative represents more than one client with competing interests in the same real estate transaction. This can happen when:

• The brokerage represents both the buyer and seller in the same transaction.
• The brokerage represents two or more competing buyers interested in the same property.

Multiple representation is not permitted unless all clients involved provide informed, written consent. In such situations, the brokerage or representative must treat all clients impartially and cannot disclose confidential information from one client to another. It's essential to understand the implications of multiple representation and consider seeking independent professional advice before proceeding.

N - R

Net Proceeds: The amount a seller receives after deducting all closing costs and outstanding mortgage balances.

Offer to Purchase: A formal document outlining the buyer’s proposed terms and conditions for purchasing a property.

Open Mortgage: A mortgage that allows early repayment without penalty.

Porting a Mortgage: Transferring an existing mortgage to a new property without penalties.

Principal: The original amount borrowed in a mortgage before interest.

Property Tax: A municipal tax based on a property's assessed value, used to fund local services.

Realtor®: A licensed real estate professional who is a member of the Canadian Real Estate Association (CREA).

Reserve Fund: A savings account maintained by a condominium corporation for future repairs and maintenance.

Right of First Refusal: A contractual right that gives a party the first opportunity to purchase a property before it’s offered to others.

S - Z

Seller’s Market: A market condition where demand exceeds supply, giving sellers an advantage.

Status Certificate: A document detailing the financial and legal status of a condominium unit and corporation.

Survey: A map outlining property boundaries and structures on the land.

Title: Legal ownership of a property.

Title Insurance: A policy that protects against ownership disputes and title defects.

Variable-Rate Mortgage: A mortgage with an interest rate that fluctuates based on market conditions.

Zoning: Municipal regulations that determine how a property can be used (e.g., residential, commercial).

Need Expert Guidance? We’re Here to Help!

Real estate can feel complex, but with the right information and expert guidance, you can navigate the process with confidence. At GET Taylored Real Estate, we pride ourselves on clarity, transparency, and ensuring our clients make well-informed decisions.

? Have questions about a term or need personalized advice? Contact us today!