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Real Estate Lingo Unveiled: Navigating the Canadian Housing Maze

The real estate realm in Canada is a maze of terms that can boggle the mind if you’re not in the know. It gets even trickier in the land of maple syrup and politeness, where real estate lingo has its unique twists and turns. To make your journey smoother, we’ve compiled a guide to decode the secret language of Canadian Realtors.

Feel free to give us a shout if any of these terms seem like hieroglyphics or if you think we’ve missed anything crucial.

Adjustable-Rate Mortgage (ARM)

A mortgage is characterized by an interest rate that may periodically shift, contingent upon a specified index or prevailing market conditions.

Adjusting Date

The date for revising financial adjustments, such as property taxes or utilities, between the buyer and seller in the course of a real estate transaction.

Agency

The affiliation between a real estate professional and their client, wherein the agent advocates for the client’s interests during a real estate transaction. In British Columbia, the Disclosure of Representation in Trading Services delineates this association.

Amortization

The gradual reduction of a debt, such as a mortgage, over time through regular payments. Gain insights into real estate amortization using our 40-year amortization mortgage calculator.

Amortization Period

The agreed-upon duration for repaying a mortgage loan is distinct from the mortgage term.

Annual General Meeting (AGM)

A yearly assembly of strata owners to address matters concerning the strata corporation, also known as an AGM.

Apartment

A unit within a residential building, either a dwelling rented from a single owner or an individually owned unit within a strata condominium development. In Canadian real estate, an apartment is typically not owned by its occupant, unlike a condo.

Appraisal

A professional assessment of a property’s value is often conducted by an appraiser. Delve deeper into this subject in our comprehensive article on What is an Appraisal?

Appurtenant

An ancillary right or privilege attached to a property, such as an easement or right-of-way.

Assignee

The ultimate buyer in a presale condo assignment sale, acquiring the rights or title from another through assignment.

Assignment

The transference of an individual’s rights or property to another person or entity.

Assignment Sale

The sale of a property where the buyer acquires the right to purchase a property from the original buyer (assignor) before its completion. In Canadian real estate, assignments typically involve presales.

Assignor

The seller in a presale condo assignment sale, relinquishes the rights or title through assignment.

Assessed Value

The dollar value is assigned to a property by a public tax assessor for tax purposes. In British Columbia, BC Assessment is the public tax assessor.

Back-Up Offer

An alternative offer made by a potential buyer in case the primary offer falls through.

Balanced Market

A real estate market condition where the number of properties for sale equals the number of potential buyers.

Bank Draft

A payment instrument issued by a bank on behalf of a buyer to secure funds for a specific transaction is commonly used for deposits in BC property purchases.

Below Grade

Refer to the Grade below.

Bidding War

See the Multiple Offer Situation below.

Blended Mortgage Payments

Payments encompassing both principal and interest components of a mortgage.

Bridge Financing

Short-term financing covers the gap between the end of one loan and the commencement of another.

British Columbia Real Estate Association (BCREA)

A professional association representing real estate licensees in BC.

Building Code

Regulations and standards established by local authorities for building design and construction to ensure safety and compliance.

Building Envelope

The physical barrier between a building’s interior and exterior, including walls, roof, windows, and doors.

Buyer’s Agent

A real estate agent representing the buyer in a transaction.

Buyer’s Market

A market condition with an excess of properties for sale leads to more favorable terms for buyers.

Bylaws

Regulations governing the use of common areas in a strata corporation or condominium development.

Cap Rate

Short for Capitalization Rate, a measure for evaluating the potential return on an investment property based on its net operating income.

Capital Gain

The increase in the value of an asset over its original purchase price.

Capital Gains Tax

Taxes levied on capital gains.

Chattels

Non-permanently attached items in a property, excluding fixtures.

CMA

See Comparative Market Analysis.

Closed Mortgage

A mortgage that cannot be fully paid off, renegotiated, or refinanced before its term ends without penalties.

Closing Costs

Fees and expenses incurred in the final stages of a real estate transaction, including Property Transfer Tax, legal fees, and inspection costs.

Collateral

An asset offered by a borrower to secure a loan.

Commercial Mortgage-Backed Securities (CMBS)

A financial instrument pooling commercial real estate loans and selling them to investors.

Common Areas

Shared spaces are owned collectively by condominium or strata development owners.

Common Property

Areas owned collectively by all strata owners and maintained by the strata corporation.

Commercial Property

Real estate intended for business purposes.

Comparative Market Analysis (CMA)

An analysis by a real estate agent to determine a property’s value based on recent comparable sales.

Compound Interest

Interest is calculated on both the principal and accrued interest.

Conditional Offer

An offer is dependent on specified conditions, such as mortgage approval or a home inspection.

Condominium or Condo

A type of real estate ownership where individual units are privately owned, while common areas are shared.

Condo Fees

Refer to Strata Fees below.

Conventional Mortgage

A mortgage not insured or guaranteed by Canada Mortgage House Corporation (CMHC) with a down payment exceeding 20%.

Contingency Reserve Fund (CRF)

A fund set up by a strata corporation for unforeseen expenses and repairs to common property.

Contract of Purchase and Sale

A legal document outlining the terms of a real estate transaction.

Conveyancer

A professional handling the legal transfer of property ownership.

Conveyancing

The legal process of transferring property ownership.

Coop/Cooperative Ownership

Property ownership is where each owner holds a stake in a cooperative entity owning multiple housing units.

Counteroffer

A revised offer was made in response to a previous offer.

Court-Ordered Sale

A property sale ordered by a court to satisfy a judgment or legal claim.

Curb Appeal

The visual appeal of a property from the street view.

Debt Service Ratio

The ratio of debt payments to an individual’s or firm’s disposable income.

Deed

A legal document transferring ownership of real property.

Depreciation

A decrease in a property’s value over time.

Deposit

A sum of money is paid in advance as a sign of good faith when making an offer on a property.

Developer

The entity or individual planning, financing, and constructing a real estate development.

Direction Regarding Presentation of Offers (DRPO)

A document allowing a seller to delay reviewing offers on their property in BC.

Disclosure of Remuneration

A document disclosing the remuneration a realtor will receive for representing a buyer.

Disclosure of Representation in Trading Services (DORTS)

A document disclosing the nature of a real estate agent’s representation.

Document Package

Refer to Strata Documents below.

Down Payment

A portion of a property’s purchase price is paid in cash and not financed.

Double Ending

See below.

Dual Agency

A situation where a real estate agent represents both the buyer and seller in the same transaction.

Duplex

A building with two separate living units, each with its entrance.

Encroachment

An unauthorized intrusion onto someone else’s property.

Encumbrance

A claim or liability on a property affecting its marketability.

Equity

The difference between a property’s market value and claims held against it.

Exclusive Listing Contract

A contract granting a real estate agent exclusive rights to market and sell a property.

Expiration of the Offer

The date and time until a contract of purchase and sale remains open for acceptance.

Face Sealed Wall System

An exterior cladding system provides a waterproof barrier to protect a building’s envelope.

Fee Simple

Refer to Freehold below.

Fixed-Rate Mortgage or Fixed-Rate Mortgage

A mortgage with an interest rate that remains constant throughout its term.

Fixture

An item attached to real property that cannot be removed without damaging it.

Flipping

The practice of buying, renovating, and selling a property for profit.

Foreclosure

The legal process by which a lender repossesses and sells a property due to borrower default.

Freehold

Property ownership with complete control and use of the land and structures.

Fiduciary Duty

The legal and ethical obligation of a real estate agent is to act in the best interests of their client.

FINTRAC

The Financial Transactions and Reports Analysis Centre of Canada, combating money laundering and terrorist financing.

Fixed Rate Mortgage

A mortgage with a set interest rate throughout its term.

Forced Air Heating

A heating system using a furnace to heat air distributed through ductwork.

Foreign Buyers Tax

A tax on non-Canadian buyers without the correct residency permit.

Foreign Buyers Ban

Canada’s Federal Government bans non-Canadians and those without proper residence visas from buying property.

Form B

A strata corporation provides essential information about a strata lot.

Form K

A strata corporation form detailing the rental status of a strata lot.

GDS (Gross Debt Service)

The percentage of a borrower’s gross monthly income required to cover monthly housing costs.

Grade

The average height of the finished ground at the middle points of all building walls.

Grandfathering

Allowing existing practices or conditions to continue despite new housing regulations.

Gross Debt Service Ratio (GDS)

The percentage of a borrower’s gross monthly income needed for monthly housing costs.

GST

Goods and Services Tax, a federal tax on new property sales in Canada.

High Ratio Mortgage

A mortgage represents a high percentage of a property’s value, often requiring mortgage insurance.

Home Buyer Rescission Period (HBPR)

A three-business-day period for a home buyer to cancel a contract of purchase and sale for an existing property in BC.

Home Equity Line of Credit (HELOC)

A loan allows homeowners to borrow against their home equity.

Home Inspection

A non-invasive examination of a property’s condition, typically before purchase.

Home Inspector

A licensed professional conducting property inspections.

Home Inspection Report

A report detailing a home inspector’s findings after inspecting a property.

Home Price Index (HPI)

A tool measuring real estate prices, providing a stable indicator of market trends.

Holding Company (Hold Co)

A legal entity holding properties and assets for investment purposes.

Housing Expenses

Monthly costs associated with owning a property.

Inflation

The rise in the general level of prices over time.

Interest Rate

The cost of borrowing money is expressed as an annual percentage rate.

Joint Tenants/Joint Tenancy

A co-ownership type is where each tenant owns an equal share, with the share passing to surviving tenants upon one’s death.

Land Titles Office

An office maintaining land ownership records and public land title information.

Landlord

The property owner leasing it to a tenant.

Land Transfer Tax

A government-imposed fee on property buyers when real estate ownership is transferred.

Lease

A contract conveying land, property, services, etc., to another for a specified time.

Leasehold

A property ownership type with a limited period of use.

Legal Description

A detailed property boundary and location description is used in legal documents.

Lien

A legal claim against a property for a debt.

Limited Common Property (LCP)

Strata development areas for exclusive use, not part of any strata lot.

Listing

A formal agreement for a real estate agent to represent a seller.

Listing Contract

An agreement between a property owner and a real estate agent for listing terms.

Listing Agent

An agent representing the seller in a real estate transaction.

Loan-to-Value Ratio (LTV)

The ratio of the mortgage amount to the appraised property value.

Lockbox

A secure container storing keys for property access by real estate agents.

Low Ball Offer

An offer significantly below the asking price.

Maintenance Fees

Regular fees paid by condominium owners for common area maintenance.

Market Value

The most probable price a property would fetch in an open market.

Maturity Date

The date when a mortgage or loan term ends.

Material Latent Defect

A hidden property defect posing significant risks.

MLS (Multiple Listing Service)

A database used by real estate brokers to share property information.

Monthly Payment

The monthly amount paid towards a mortgage.

Mortgage

A loan using real estate as collateral.

Mortgage Lender

A financial institution providing mortgage loans.

Mortgage Payment

Regular installments towards repaying a home loan.

Mortgage Broker

An intermediary connecting borrowers with lenders.

Mortgage Default Insurance

Insurance compensating lenders for mortgage defaults.

Mortgagee

The lender in a mortgage agreement.

Mortgagor

The borrower pledging property for a loan.

Mutual End of Tenancy

An agreement to end a tenancy by mutual consent.

Multiple Listing Contract

A contract allowing property listing on the Multiple Listing Service (MLS).

Multiple Offer Situation

Multiple buyers submitting competing offers for the same property.

Negative Cash Flow

Expenses exceeding rental income for a property.

NIMBY (Not In My Back Yard)

Opposition to new developments or changes in a local area.

OfferA formal, legal document expressing a buyer’s intent to purchase a property, including proposed terms and conditions. For more details, see Contract of Purchase and Sale.

Oil TanksContainers used to store oil, are often found on older properties, raising environmental and safety concerns. Common in houses built from the 1920s to the 1970s; it’s advisable to conduct an oil tank scan when buying a house in BC.

Oil Tank ScanThe process in which a buyer hires an oil tank removal company to scan the lot of a house for the presence of oil tanks. Essential for properties with potential environmental risks.

Open HouseA designated period during which a property for sale is open to the public for viewing, typically held on Saturdays or Sundays from 2-4 pm.

Open Mortgage

A mortgage that allows the borrower to prepay or pay off the loan at any time without penalties.

Parcel Identifier (PID)

A unique identification number is assigned to a property by the land title office.

Parkade

A Canadian term for an indoor parking area, often found in condominium or apartment buildings, typically below or underground.

Party Room

A shared space in a condominium or apartment building for residents to use for gatherings or events, also known as an amenity room.

Penthouse

A luxurious apartment typically located on the top floor of a high-rise building.

Permanent Resident

An individual granted the right to live in Canada indefinitely but isn’t a Canadian citizen.

POA (Power of Attorney)

A legal authorization allowing someone to manage another person’s real estate or financial matters on their behalf. Two types are general power of attorney and enduring power of attorney.

Positive Cash Flow

A financial situation where rental income from a property exceeds the expenses of owning and maintaining it.

Possession Date

The date on which the buyer takes possession of the property and officially becomes the owner.

Power of Attorney

A legal authorization allowing someone to manage another person’s real estate or financial matters on their behalf. See POA above.

Pre-Approved Mortgage

A lender’s commitment to lend a fixed loan amount to a potential borrower is based on a preliminary assessment of their financial situation.

Prepayment Penalty

A fee is charged to a borrower who pays off a mortgage loan before it is due.

Prequalification

An initial assessment by a lender of a borrower’s creditworthiness to determine the maximum loan amount they may qualify for.

Presale

The sale of a property before it is constructed or completed typically refers to condos, townhouses, or other high-density housing in urban areas.

Principal

The amount borrowed on a loan, separate from interest.

Property Condition Disclosure Statement (PCDS)

A document disclosing everything a seller knows about a property’s condition. In BC, sellers are not required to provide a PCDS.

Property Tax

A local tax is imposed on properties, usually based on the assessed value and paid annually by the property owner. Distinct from Property Transfer Tax (PTT) in BC.

Property Transfer Tax (PTT)

A provincial tax is applied to property transactions in certain regions, including British Columbia.

Prospective Buyer

An individual or entity expressing interest in purchasing a property but hasn’t committed to a purchase.

Purchase Agreement

See Contract of Purchase and Sale.

Realtor

A real estate agent who is a member of the Canadian Real Estate Association (CREA).

Real Estate Agent

A licensed professional representing clients in real estate transactions. See Realtor above.

Real Estate Board

An organization governing and representing real estate agents and brokers in a specific region.

Real Estate Development Marketing Act (REDMA)

A BC law regulating the marketing and sale of real estate presale development projects, providing consumer protection.

Real Estate Investment

The purchase of property to generate profit, either through rental income or property appreciation.

Real Estate Lawyer

A lawyer specializing in real estate law, handling legal aspects of property transactions.

Real Estate Licensee

An individual or entity with a valid license to conduct real estate activities, including agents and brokers. See the Realtor and Real Estate Agent above.

Real Estate Services Act (RESA)

BC legislation governing real estate professionals and regulating the industry.

Refinance

The process of obtaining a new mortgage to replace an existing one, often to take advantage of lower interest rates or access equity.

Rental Agreement

A contract outlining terms and conditions between a landlord and a tenant, also known as a lease.

Residential Tenancy Act (RTA)

BC legislation governs the rights and responsibilities of landlords and tenants in residential tenancy situations.

Residential Tenancy Branch (RTB)

A BC government agency providing information and dispute resolution services for residential tenancy matters.

Residential Real Estate

Properties are designed for living purposes, including single-family homes, apartments, townhouses, condos, and multi-family units.

Reverse Mortgage

A financial product allowing homeowners to borrow against home equity, repaid when the property is sold or the homeowner moves out.

Section 49 RTA Ending a Tenancy for A Sale

A process where a buyer requests vacant possession of a rented property they are purchasing. The tenant is given 60 days’ notice for vacant possession.

Seller’s Market

A market condition with a shortage of properties for sale and high demand potentially leads to price increases.

Selling Agent

An agent representing the buyer in a real estate transaction.

Shadow Flipping

Unethical practice where properties are bought below market value from vulnerable sellers and sold before completion without the original seller’s knowledge or consent.

Speculation and Vacancy Tax “Spec Tac”

A tax levied on owners of vacant residential properties in certain BC regions to curb property speculation and increase housing supply.

Staging

The practice of styling and furnishing a property for sale to enhance its attractiveness to potential buyers.

Step Code

An energy efficiency standard in BC setting requirements for new construction and building retrofits.

Stick Built

A term describing a property constructed entirely on-site using wood, rather than prefabricated or manufactured elsewhere.

Strata

A form of property ownership where individuals own their strata unit and share ownership of common property.

Strata Council

Elected group managing a strata corporation’s affairs and making decisions on behalf of owners.

Strata Documents

Records related to the strata corporation and property, including bylaws, financial statements, Form B, and meeting minutes.

Strata Fees

Regular payments by strata owners for common area maintenance, also known as maintenance fees.

Strata Freehold

Ownership is where individuals own their strata unit and a percentage of the common property and land.

Strata Lot

The part of the strata is owned by individual owners, typically the interior space of a condo.

Strata Manager

Individual or management company hired by a strata corporation to manage day-to-day operations.

Strata Meeting

Gathering of strata owners to discuss and make decisions on strata corporation matters.

Strata Meeting Minutes

Written records of discussions and decisions made during strata meetings, often included in a condo document package.

Strata Plan

Legal document showing the layout, boundaries, and area of strata property, common property, and limited common property.

Strata President

Elected individual presiding over strata council meetings and representing the strata corporation.

Strata Property

Real estate is subject to strata ownership and regulations in a strata development.

Strata Property Act

BC legislation governing strata corporations, strata properties, and their management.

Strata Property Act Standard Bylaws

Default bylaws that apply to strata corporations in BC unless modified by owners.

Strata Title

Ownership is where individuals own a strata unit and share common property as defined in the strata plan.

Subject Clause

Condition in an offer to purchase, making the offer conditional on certain factors being met.

Subject Free Offer

An offer to purchase a property without any subjects, subject conditions, or contingencies.

Subject Removal

The process of satisfying and removing subjects or subject conditions from an offer, making it a firm contract.

Survey

Precise measurement and report of a property’s physical characteristics, including land, boundaries, and building locations.

Tax Assessment

Evaluation of a property’s value for calculating property taxes.

Tenancy

Occupancy or possession of a property by a tenant under a rental agreement or lease.

Tenant

An individual or entity renting or leasing a property from a landlord.

Tenants in Common

A property co-ownership form where parties hold individual, undivided interests that can differ in size.

Title

A legal document evidencing a person’s right to or ownership of a property.

Title Insurance

Insurance protects against loss sustained by defects in the title.

Townhouse/Townhome

A residential property shares side walls with neighboring units, often with its front door.

Total Debt Service (TDS)

A financial measure calculating the percentage of a borrower’s gross income needed to cover all monthly debt obligations.

Torrens System

A system bestowing undeniable ownership of real property upon the registered titleholder, eliminating the need for recording deeds.

Triplex

A residential building or property is divided into three separate living units or apartments.

Trust Account

A bank account maintained by a real estate brokerage holding buyers’ deposits between subject removal and completion to protect deposits.

Unconditional Release

A document ending a real estate transaction or listing contract.

Vancouverism

Urban planning doctrine originating in Vancouver, promotes high-density living and blending natural and constructed elements.

Variable-Rate Mortgage

A mortgage with an interest rate that can fluctuate based on market conditions.

Warranty

A guarantee provided by a builder or seller to the buyer, covering the quality and condition of a property for a specific period after purchase.

Witness

A person who witnesses another person’s signature on a contract to ensure the signer signed the document.

Wood Frame Construction

A building construction method uses wood as the primary structural material for walls, floors, and roofs.

Yimby (Yes In My Backyard)

Individuals or groups advocating for new developments or changes in their local area, supporting urban growth and housing initiatives.

Yield

The income generated by an investment property is usually expressed as a percentage of the property’s value.

Zoning

Local government regulations dictate land use, including restrictions on building types and activities.

Zoning Bylaw

Official rules and regulations set by local governments define permitted uses and development requirements for properties within a given zone.

Conclusion – Real Estate Terminology in Canada

Gaining familiarity with the extensive vocabulary of real estate terms in Canada is essential for individuals at every stage of involvement in the real estate market, whether you’re a first-time homebuyer, an experienced investor, or a professional within the industry. This comprehensive understanding enables you to make well-informed decisions and successfully navigate the intricate landscape of real estate transactions in Canada. In the realm of real estate, knowledge truly equates to power, providing you with a distinct advantage when grappling with the nuances inherent in Canadian real estate.

It’s important to acknowledge that real estate terms are not universally standardized across Canada. This glossary predominantly focuses on British Columbia and the Common Law system of English-speaking Canada. Quebec, operating under the Civil System, employs distinct terminology. If you are operating outside of BC, consulting with a local real estate expert is advisable to confirm the relevance and accuracy of these terms.

For clarification or if you notice any omissions or inaccuracies in this compilation of Real Estate Terms Canada, please bring them to our attention. This glossary draws on our experiences as Realtors in BC and incorporates information from regulatory bodies such as BCFSA, REBGV, BCREA, and CREA. Additionally, we have consulted sources like CMHC and other government entities in Canada for a comprehensive and reliable compilation.

Please contact Jared Gibbons, your local realtor, should you have any questions!

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