Joe Badin

Abandonment

Occurs when a person with a right or interest in a property voluntarily gives up that right or interest, either by physically "abandoning" the property or by showing the intention to give up the right or interest.

Absentee Owner

An owner of a property who lives elsewhere, leaving tenants in control and occupation of the property.

Absorption Rate

Expressed as a percentage, the number of properties that can be bought or sold in a particular market. May be broken down as to types and sizes of properties.

Access

The right to enter a property, access may be restricted to certain times, to certain persons and to certain purposes (i.e. access for inspection).

Accrued Interest

Interest which has already been earned but has not yet been paid.

Acre

An imperial measure for land, replaced in Canada by the metric hectare, equals 43,560 sq.ft, 4,047 square metres, 0.047 hectares.

Addendum

An addition to a document that forms part of it. Similar to a schedule to an Agreement of Purchase and Sale. May be used to add specific and detailed information material to the contract or upon which contractual terms are based.

Adjacent Land

An inexact term used to describe any property which is situated near or abutting a certain piece of property will always be adjacent but an adjacent property may not be abutting.

Adjustment Date

The day from which all calculations of interest, tax adjustments, utility bill adjustments (if applicable) are made to the credit of either the purchaser or the vendors. This is usually (but not always) the same as possession date.

Agricultural Property

Land zoned for agricultural or farming activities.

Amortization

The number of years it takes to repay the entire amount of the mortgage.

Appraisal

The process of determining the lending value of a property.

Appreciation

The increase in a property's value over time.

Arrears

Money which is not paid when due, under a payment plan or amortization schedule. Could lead to enforcement of a loan agreement by lender.

Assessed Value

The value of a property, set by the local municipality, for the purpose of calculating property tax.

Bedroom Community

A neighbourhood or area which offers little in the way of employment opportunities but plenty of housing, similar to a "suburb" or commuter town.

Benchmark

A permanent feature on land which is used as a point of reference for a land surveyor.

Blanket Insurance Policy

A single insurance policy that applies to more than one person or property.

Blended Mortgage Payments

Equal or regular mortgage payments, consisting of an interest component.

Broker

A real estate professional licensed by British Columbia to facilitate the sale, lease of exchange of property.

Buy-down rate

When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and the market rate directly to the lender or purchaser.

Capped rate

An interest rate with a pre-determined ceiling - usually associated with the mortgage.

Closing

The real estate transaction's completion, when the parties involved agree that all legal and financial obligations have been met and the deed to the property is transferred from the seller to the buyer.

Closing Costs

Expenses in addition to the purchase price for buying and selling a property.

Closing Date

The date on which the sale of the property becomes final.

Condominium Common Property, or Common Elements

The portions of a condominium development owned in common (shared) by the unit owners, e.g. pool exercise room, lobby, etc. A strata fee is charged to every unit owner for the use of the common property.

Condominium Ownership

Shared ownership in a strata-titled property. Owners have title (ownership) to individual units and a proportionate share in the common property.

Convertible Mortgage

A mortgage that you can change from short-term to long-term based on your financial needs.

Conventional Mortgage

A first mortgage issued for up to 75 percent of the property's appraised value or purchase price, whichever is lower.

Conveyance

The term used to describe the process of transferring the vendor's title to the purchaser and indicates all the necessary steps to complete the transfer. A conveyancing lawyer is a lawyer (or notary) responsible for the conveyance process (this is normally the purchaser's lawyer).

Counter Offer

An offer made by the vendor (seller) back to the purchaser altering one or several terms and/or conditions of the offer as originally written.

Debt Service Ratio

The percentage of a borrower's income that can be used for housing costs. Gross Debt Service (GDS) Ratio is the amount that a lender will permit a borrower to use from his/her gross income in order to qualify for a loan for housing costs, including mortgage payment and taxes (and condominium fees when applicable). Total Debt Service (TDS) Ratio is the maximum percentage of a borrower's income that a lender will consider for all debt repayment (other loans and credit cards, etc) including a mortgage.

Deed

A legal document that conveys (transfers) ownership of a property to a buyer.

Down Payment

The money that you pay up front for a house. Down payments typically are 10%-25% of the total value of the home.

Easement

A legal right to use or cross (right-of-way) another person's land for limited purposes. A common example is a utility company's right to run wires or lay pipes across a property.

Encroachment

An intrusion onto an adjoining property. Common examples are a neighbour's fence, storage shed, or overhanging roof line that partially (or even fully) intrudes onto your property.

Equity

The difference between the price for which a property can be sold and the mortgage(s) on the property. Equity is the owner's stake in the property.

Foreclosure

A legal process by which the lender takes possession and ownership of a property when the borrower doesn't meet the mortgage obligations.

GE Capital Mortgage Insurance Company of Canada (GEMI)

A private mortgage company. One potential source of mortgage insurance for high-ratio mortgages.

High-Ratio Mortgage

A mortgage that exceeds 75 percent of the loan-to-value ratio; must be insured by either Canada Mortgage and Housing Corporation (CMHC) or a private insurer like GEMI to protect the lender against default by the borrower who has less equity invested in the property.

Home Insurance

Insurance to cover both your home and its contents in the event of vandalism, etc. (also referred to as property insurance). This is different from mortgage insurance which pays the outstanding balance of your mortgage in full if you die.

Inspection

The process of having a qualified home inspector identify potential repairs the property you are interested in and their estimated cost.

Land Transfer tax

Payment made to the provincial government for transferring property from the seller to the buyer.

Lien

Any legal claim against a property, filed to ensure payment of a debt.

Mortgage

A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt.

Mortgagee

The lender.

Mortgagor

The borrower.

Mortgage Insurance

Government backed or private backed insurance protecting the lender against a borrower's default on high-ratio (and other types of) mortgages.

Moving Expenses

The cost of hiring packers, movers, or renting a van.

Multiple Listings Service (MLS®)

A current and comprehensive listing system for relaying property information to the Fraser Valley Real Estate Board's more than 2700 real estate professionals. This service offers the widest exposure to properties listed for the sale.

Open Mortgage

A mortgage that can be prepaid or renegotiated at any time and in any amount, without penalty.

Principal

The mortgage amount initially borrowed or the portion still owning on the mortgage. Interest is calculated on the principal amount.

Property Condition Disclosure Statement

The form enables vendors to disclose down defects. If the vendor decides not to complete the form and does not disclose known defects, he or she is still held liable. The form also serves as a checklist for buyers enabling them to address concerns about the property's condition on the spot. This form was developed by the British Columbia Real Estate Association.

Property Taxes

This levy is affected by location and is determined by local property tax assessment practice. Tax assessments are conducted by local government. They are paid on an annual basis.

Property Transfer Tax (PTT)

Payment to the provincial government for transferring property from the seller to the purchaser. In the 1994 provincial government's budget, the PTT was eliminated for first-time buyers under certain circumstances.

REALTOR®

"The REALTOR"' trademark identifies a licensed real estate professional who is a member of The Canadian Real Estate Association, and as such subscribes to a high standard of professional service and a strict Code of Ethics.

Rights of way

Are indicated on title at the Land Title Office; often for use of utilities or city municipality in order to make repairs to pipes, etc.; no permanent structure may be built on a right of way.

Statement of Adjustments

Closing statements in a real estate transaction which set out the sources of funds which make up the purchase, the final amount required from the purchase and the amount due to the vendor. Lawyers will prepare a statement for the vendor and the purchaser.

State of Title Certificate

A copy of the title which lists charges against the property, e.g.; liens, mortgages, rights of way, etc.

"Subject-to" Clause

A statement of a condition to be fulfilled before the contract will become firm and binding must include a specific deadline for removal.

Title

The legal evidence of ownership in a property.

Title Search

A detailed examination of the ownership documents to ensure there are no liens or other encumbrances on the property, and no questions regarding the seller's ownership claim.

Utility Taxes

Examples may include water, sewer, and garbage (may include recycle levies).

Variable-Rate Mortgage

A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market interest rates. If mortgage rates go up, a larger portion of the payment goes to interest. If rates go down, a larger portion of the payment is applied to the principal.

Vendor Take-Back Mortgage

When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.

Zoning Regulations

Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.

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