Alberta Real Estate Association — An association of real estate industry members who belong to real estate boards in Alberta.
Addendum and Amendment - is a written change of a listing contract or purchase agreement agreed upon by either a buyer or a seller or both.
Amenities - In real estate, amenities are something considered to benefit the property and thereby increase the value of a property. Condominium amenities can include items such as elevators, underground parking, party rooms and swimming pools. Public amenities include banks, retail buildings, local buses and LRT stations, medical facilities, parks, schools, walking trails, golf courses and other community facilities.
Amortization - is the time period during which home buyers will have to pay back their mortgage to their lender — both the principal and interest accrued.
Appraisal — An estimate of a property’s value performed by a professional Appraiser.
As-Is - Common term used with the purchase of a foreclosed property. It is also used when chattels may not be in working order.
Asking Price — The price placed on the property for sale by the seller. This may or may not be the price the seller is willing to accept from a qualified buyer.
Assessed Value — The value of a property, set and used by each municipality for the purposes of calculating property tax.
Assessment - A certified real estate appraiser assigns a certain value to one’s property based on their statistical findings and general industry acumen.
Agent — A real estate professional registered in Alberta to facilitate the sale, lease or exchange of a property.
Assumable Mortgage - A mortgage held on a property by the seller that can be taken over by the buyer, who then accepts responsibility for making the mortgage payments. Speak with your Edmonton Realtor or lawyer prior to assumption of mortgages.
Attached Goods — Also known as chattels are an item which is attached to real property so as to form, in law, part of the land.
Attached goods belong to the buyer and are also known as fixtures.
Breach of Contract - Where one party (buyer or seller) has not held up to the terms of the agreement such as getting cold feet about purchasing a residence after conditions have been removed. These instances can lead to the length of legal proceedings.
Broker — A person licensed by the provincial or territorial government to trade in real estate. Real estate brokers may form companies or offices which appoint sales representatives to provide services to the seller or buyer, or they may provide the same services themselves. In parts of Canada, brokers are referred to as Associates or Agents.
Built-Ins - Permanent structures or items which are physically built into the structure of a home such as an entertainment centre.
Buyer Brokerage Agreement — A written agreement between the buyer and the buyer's associate, outlining the agency relationship between the two parties and the manner in which the buyer's associate will be compensated. In Alberta, a buyer agency relationship arises automatically without a written agreement establishing the relationship.
Buy-Down - Commonly used by our DND members. It is a mortgage financing technique where the buyer obtains a lower interest rate for at least the first few years of the mortgage and is typically done for a period of about one to five years.
Buyer’s Associate — also known as Buyer’s Realtor or Broker — A person or firm representing the buyer. A buyer’s associate's primary allegiance is to the buyer. The buyer is the buyer associate's client.
Buyer’s Market - A surplus of homes for sale in a municipality which usually leads sellers to lower prices to compete with nearby homes making favourable conditions for home buyers.
Certificate of Compliance — A stamp issued by the municipality which states the improvements comply with the local building bylaws and requirements.
Client — The person being represented by an associate. The associate owes the client fiduciary duties including utmost care, integrity, confidentiality and loyalty.
Closing - Is the "move-in" date written on your purchase agreement or the date in which the title of your property is legally in your name.
Closing Costs — Expenses in addition to the purchase price for buying and selling a property such as legal fees and title transfer costs.
CMHC — Canada Mortgage and Housing Corporation. A Crown corporation providing information services and mortgage loan insurance.
Commission — An amount agreed to by the seller and the real estate broker/associate and stated in the listing agreement. It is payable to the brokerage on closing and shared, if applicable, among those Associates involved in the sale. It is the remuneration for services provided, normally paid at the time of closing in the province of Alberta.
Comparative Market Analysis (CMA) — The most widely used technique for REALTORS® in establishing the value of residential properties. It uses sales, competitive listings and expired listings to try to determine a probable selling price for the subject property. Used synonymously with Competitive Market Analysis.
Common Area - Homebuyers who purchase residences in multifamily complexes and condominiums often have to share common areas such as the complexes amenities. This may also include parking lots and complex green spaces.
Completion Day — The day from which all calculations of interest, tax adjustments, utility bill adjustments (if applicable), etc. are made to the credit of either the buyer or the seller. All legal and financial obligations are met on that day and the title to the property is transferred from the seller to the buyer. Completion day is usually (but not always) the same as the possession date.
Condition Precedent — A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal. May also be called a “subject to” clause.
Condominium Ownership — Shared ownership in a strata-titled property. Owners have a title (ownership) to individual units and a proportionate share in the common property.
Contingencies - Sometimes there are unforeseen property issues, like structural damages to a listing only unearthed after an inspection or failure of home financing to come through. In these cases, contingencies are placed into home purchase agreements so buyers have the right to back out of a deal or demand certain items be amended, removed, or added to a contract.
Conventional Mortgage — A mortgage loan which is 75 per cent or less of the loan-to-value ratio; and does not require insurance by CMHC or other private insurers.
Conveyance — The term used to describe the process of transferring the seller's title to the buyer and indicates all the necessary steps to complete the transfer. A conveyance lawyer is a lawyer responsible for the conveyance process.
Counter Offer — An offer made by the seller back to the buyer altering one or several terms and/or conditions of the offer as originally written. It is the rejection and change of the original offer. It allows the original party to accept, reject or add an additional counter. This is the art of negotiation is something every top-producing Edmonton real estate agent lives for.
CREA — The Canadian Real Estate Association. A national association representing the real estate industry on federal public policy matters, providing member services and education. CREA promotes adherence to a strict REALTOR® Code. CREA Code of Ethics — Rules of behaviour or conduct which provide a standard of fair, moral practice and a guide by which a REALTOR®'s behaviour or conduct is evaluated. Most Edmonton Realtors belong to CREA.
Customer — A person who receives information or assistance from a real estate broker or associate, but is not represented by that individual. A customer is NOT a Realtors client.
Debt Service Ratio — The percentage of a borrower's income that can be used for housing costs.
Down Payment — The difference between a property's purchase price and the amount financed. Most Edmonton buyers fall in the 5-20% range. The general rule is the more a buyer is willing to put down on a home, the lower their mortgage interest rate will be.
Disclosure - It’s considered highly unethical for a home seller and their representation to not disclose any defects or problems with their property when they list it. Disclosing all issues with a home for sale is an absolute must for sellers. Failing to do so could lead to not only withdrawn offers from or legal issues with potential buyers, but also a damaged reputation on the part of the agent who works with that seller.
Dual Agency — A real estate brokerage which acts as an associate for both the seller and the buyer in the same transaction. Both buyer and seller are the brokerage's clients.
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 pipe across a property.
Encroachment — An intrusion onto an adjoining property. Common examples are a neighbour's fence, storage shed, or overhanging roof line which partially (or even fully) intrudes onto your property.
Encroachment Agreement — An agreement which allows the encroachment to remain. The owner of the development which encroaches onto the adjoining property is granted the right to enter onto that property to maintain or repair the construction.
Encumbrance — A restriction which is either a monetary claim against the land (such as a lien, mortgage or lease) or a non-monetary one (such as an easement).
Estoppel Certificate — A written statement of a condominium unit's current financial and legal status.
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.
Extension - Homebuyers who need more time to evaluate whether or not to move forward with a purchase agreement or simply need to get their finances in order often request an extension of conditions. It should be noted, sellers do not have to grant an extension of buyers.
Fee Simple Estate — Ownership where the owner owns the land now and for all time in the future and the owner's rights are subject only to restrictions by the government.
Fair Market Value - is the dollar figure put forth by the appraiser and assessor is averaged out with other residential figures from the local market. Comparable sale prices are factored in, thus giving sellers a relatively fair market value for their home.
Fixed-Rate Mortgage - is the most popular type of mortgage given to borrowers today making the amount of your mortgage payment the same each month of the amortization period.
FSBO - For Sale By Owner
Foreclosure - Bank owned property due to a seller defaulting on mortgage or tax payments.
Fiduciary Duties — The duties require for all licenced Edmonton Realtors of loyalty, disclosure, confidentiality, obedience, reasonable care and diligence, and full accounting that are required by the law of any associate relative to his or her principal.
First Mortgage — The first security registered on a property. Additional mortgages secured against the property are "secondary" to the first mortgage.
Foreclosure — A legal process by which the lender takes possession and ownership of a property when the borrower doesn't meet the mortgage obligations.
Gross Debt Service (ADS) Ratio — Gross debt service divided by household income. A rule of thumb is that ADS should not exceed 30%. It is also referred to as PIT (Principal, Interest and Taxes) over income. Sometimes energy costs are added to the formula, producing BITE, which moves the rule of thumb ADS to 32%.
High-Ratio Mortgage — A mortgage that exceeds 75 per cent of the loan-to-value ratio; must be insured by either the Canada Mortgage and Housing Corporation to protect the lender against default by the borrower who has less equity invested in the property.
Home Inspection - An appraiser or certified property inspector who provides buyers with a summary of the overall condition of the chosen home. This cost is usually covered by the buyer and a condition or contingency on an offer to purchase.
Home Warranty - an Insurance which covers homeowners when unforeseen issues arise with their homes. In the province of Alberta, it is now a standard practice for builders to provide a five-year new home warranty.
Homeowners Association Fee (HOA) - Is becoming a more common expense for Edmonton homeowners. It is a small annual fee to maintain a community. An HOA fee may cover things such as community fences, water features or playgrounds.
IDX - Internet Data Exchange - a multiple listing service syndications on Edmonton Realtor websites which provide real estate internet data and can showcase listings.
Joint Tenancy — A form of ownership in which two or more individuals (often spouses) have an equal share in the ownership of a property. In the event of one owner's death, his or her share is automatically transferred to the surviving owner; and does not become part of the deceased's estate.
Latent Defects - a defect in a property such as mold hiding beneath the surface of a floor or wall which can often go unfound by inspectors.
Lien — Any legal claim against a property, filed to ensure payment of a debt. It is a debt placed against a sellers residence, usually when a party says they are owed a debt by the owner of a property. At closing, the seller's lawyer (assuming there is enough property equity) will pay out the lien.
List Price - The asking price of a property. Note this may or may not be a fair market value price or the price a seller would be willing to accept.
Listing Realtor — The REALTOR® who signs a contract on behalf of the brokerage with an owner to sell the property.
Listing Contract — The legal agreement between the listing brokerage and the seller, setting out the services to be rendered, describing the property for sale and stating the terms of payment. A commission is generally payable to the brokerage upon completion of a sale.
Listing Presentation - a presentation customized by an agent who provides information on how they get the job done. Every Edmonton Realtor listing presentations is unique offering different real estate services. Note - Not all Edmonton Realtors provide the same services.
Lockbox - A small electronic box used to store keys to a home for easy access for licenced Realtors to show clients the listing to prospective buyers. If a Realtor is not licenced by our Edmonton Real Estate Board, they may not be able to access the lockbox.
Mortgage — A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt. Lenders consider both the property (security) and the financial worth of the borrower (covenant) in deciding on a mortgage loan. See below for more on mortgage terminology.
Mortgage Life Insurance — Insurance that pays off the mortgage debt should the insured borrower die.
Mortgagee — The person or financial institution lending the money, secured by a mortgage.
Mortgagor — The property owner borrowing the money, secured by a mortgage.
Mortgage Broker — A person or company having contacts with financial institutions or individuals wishing to invest in mortgages. The mortgagor pays the broker a fee for arranging the mortgage. Appraisal and legal services may or may not be included in the fee.
Multiple Listing Service® System — An MLS® System is a cooperative selling system operated and promoted by a Board or Association in association with the MLS® Marks. An MLS® System includes an inventory of listings of participating REALTORS® and ensures a certain level of accuracy of information, professionalism and cooperation amongst REALTORS® to effect the purchase and sale of real estate.
Mutual Acceptance - This doesn’t mean the deal is done. Mutual acceptance takes place when both a buyer and seller agree to the terms and conditions associated with a home sale. Once the paperwork is signed and initialled on all changes, the property is considered "pending." Sellers are still allowed to accept offers, but only in a backup place. In the province of Alberta, pending offers are in the first place unless the buyer is unable to remove conditions by the deadline.
Organized Real Estate — Refers to the various bodies or groups (CREA, AREA, local boards) who work together to bring about structure, standards and accepted practices in real estate. Most Edmonton Realtors belong to all three real estate boards.
Open Mortgage — A mortgage that can be prepaid or renegotiated at any time and in any amount, without penalty.
Owner Financing - This type of financing is rarer than having a mortgage. It typically occurs when a seller is fiscally well-off enough to provide a loan to a buyer.
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.