Real Estate Terminology 101 (continued)
Pre-Approved Mortgage — Tentatively approved by a financial institution for a specified amount, interest rate and monthly payment.
PIT - Principal, Interest and Taxes.
Pocket Listing - Is a listing which your Edmonton REALTOR® may have which for various reasons is not listed on the MLS.
Principal — The mortgage amount initially borrowed or the portion still owing on the mortgage. Interest is calculated on the principal amount.
Property Taxes — The value of the property as determined by local municipalities affects this levy. Local government determines the rate of taxation. Property taxes are paid on an annual basis.
Purchase Contract — The document through which the prospective buyer sets out the price and conditions under which he or she will buy the property.
Refinancing — The process of obtaining a new mortgage, usually at a lower interest rate, to replace the existing mortgage.
Real Estate Board — A non-profit organization representing local real estate brokers and Associates which provides services to its members and maintains and operates the local MLS® System. It offers orientation and other continuing education courses to its members and represents local real estate matters at the municipal level. Our Edmonton REALTOR® board is called the Edmonton Association of REALTORS®.
Real Property Report — The legal outline of the property and location of all buildings and improvements on the land (formerly called the Surveyor's certificate).
REALTOR® — A trademark controlled by the Canadian Real Estate Association that identifies real estate professionals who are members of CREA. REALTOR® refers to the standard of brokerage services provided by members of CREA. REALTOR® is synonymous with professionalism. And professionalism means at least three things -service, competence and ethics. All three are essential ingredients in the REALTOR® recipe.
REALTOR.ca — Carries property advertisements and consumer-related information supplied by individual real estate boards and associations across Canada.
REALTOR® Code of Ethics - The promise to work in the best interests of real estate clients and abide by all rules and regulations set by local, provincial and federal real estate associations.
REALTORS® Association of Edmonton — REALTORS® Association of Edmonton is a professional association of over 3,100 Brokers and Associates in the greater Edmonton area. The Association enforces a Code of Ethics, Standards of Business Practice and disciplinary action, when necessary, for its members. The Association provides professional education to its members, administers the Multiple Listing Service® and advertises property listings on the Internet atREALTOR.ca, as well as in the Real Estate Weekly for the benefit of REALTORS® and their clients.
RECA - Real estate council of Alberta. A provincial real estate association representing the real estate industry on provincial matters, providing members with legal real estate documents for both buyers and sellers. Most Edmonton REALTORS® belong to CREA.
Rights of Way — Are indicated on title at the Land Title Office; often for use of utilities or city or municipality in order to make repairs to pipes, etc. No permanent structure may be built on a right of way.
Second Mortgage — A second financing arrangement, in addition to the first mortgage, also secured by the property. Second mortgages are usually issued at a higher interest rate and for a shorter term than the first mortgage.
Seller’s Market - occurs when there are fewer homes on the market the demand is far higher than the supply. This increases house prices and sometimes very quickly like during Edmonton real estate boom in 2006 - 2007.
Seller’s REALTOR®— The seller's REALTOR® represents the seller as a listing associate under the listing contract. His or her primary allegiance is to the seller. The seller's associate does not represent the buyer.
Single Agency — The practice of representing either the buyer or the seller, but not both in the same transaction.
Statements of Adjustments — Closing statements in a real estate transaction which set out the sources of funds which make up the purchase price, adjustments to and from the purchase price, the final amount required from the purchase and the amount due to the seller. Alberta real estate lawyers will prepare a statement for the seller and the buyer.
Surveyor - A person who is qualified for analyzing entire lots where properties reside and provide their findings in the form of maps and reports to homeowners. Surveyors can provide Edmonton homes owners with a current real property report.
Tenancy in Common — The owners each own a part of common land. If one owner dies, the interest goes to his or her heirs rather than the other owners.
Title — The legal evidence of ownership in a property.
Title Insurance - An insurance which covers homeowners in an unforeseen event such as another party lays claim to a residence, issues pertaining to forgery or fraud.
Title Search — A detailed examination of the ownership documents to identify the owner and any liens or other encumbrances on the property.
Total Debt Service Ratio — the maximum percentage of a borrower's income that a lender will consider for all debt repayment including other loans and credit cards and mortgages.
Torrens System — Alberta's land registry system.
Transaction Brokerage Disclosure — The information which a dual associate must disclose and explain to both buyer or a seller when he or she is acting as a dual associate.
Turn-Key - A phrase used by REALTORS® for pristine properties.
Unattached Goods — Moveable personal property such as appliances. Normally in the province of Alberta, unattached chattels are left in the home.
Underwriter - An underwriter reviews all paperwork relating to your mortgage pre-approval to make sure everything is in order and that borrowers are truly qualified to receive such a loan. Should the underwriter discover something off with a loan (e.g. lower buyer credit score than the one listed), they alert the originator, who will then have to rework the mortgage terms.
Walkthrough - a pre-scheduled date to allow buyers to view a property prior to closing to ensure all terms have been satisfied.
Zoning — Land Use Bylaw specifies in great detail every aspect of how property within a particular area of the municipality may be used.
Zero-Lot Line - Many existing homes today are built exactly on top of property lines. These often exist in urban areas, where buildings are constructed quite close to one another and use all of their allotted land space to build.