GLOSSARY OF REAL ESTATE TERMS

Adjustments:

Property taxes, electricity, gas, fuel and mortgage interest already paid out for future service must be pro-rated. This can involve an expenditure of several hundred dollars payable when the sale is completed.

Appraisal:

The process of determining the value of the property, usually for lending purposes. This value may or may not match the purchase price of the home.

Broker:

An intermediary between the buyer and seller who is licensed to carry out such activities.

Building Permit:

A certificate that must be obtained from the municipality by the property owner or contractor before a building can be erected or renovated.

Survey Certificate:

A document specifying the exact location of the property and describing the type and size of house, including additions.

Certificate of Search:

A document verifying the transactions registered against the property - i.e. sales, mortgages, etc.

Conditional Offer:

An offer to purchase subject to specified conditions. These conditions could be the arranging of a mortgage or the sale of a present home. Usually a time limit in which the specified conditions must be met is stipulated.

Deed:

The final document prepared by a lawyer or notary to be signed by the seller and purchaser transferring ownership. This document is then registered against the property as evidence of ownership.

Deposit:

A sum of money deposited in trust by the purchaser on making an offer and held by the broker, lawyer or notary until the closing of the sale.

Discharge:

The removal of all mortgages and other financial encumbrances on a property.

Easement:

The right acquired for access to or over another person's land for a specific purpose, such as for a driveway or public utilities.

Encumbrance:

A registered claim for debt against a property, such as a mortgage.

Equity:

The interest of the owner in a property over and above all claims to the property. It is usually the difference between the Mortgage(s) and the market value of the property.

Holdback:

An amount of money withheld by the lender during the construction stage of a house to ensure that construction is satisfactory at every stage. The amount of holdback is generally equivalent to the estimated cost to complete construction.

Insurance:

Before the transaction can be closed, the purchaser MUST have fire insurance arranged and in effect. A certificate from the insurance company may be required at the closing.

Mechanic's Lien:

A claim against a property for money owing to a supplier, subcontractor or other person or company who has provided labour or materials.

Offer to Purchase:

A written contract setting forth the terms under which a buyer agrees to purchase a property. Upon acceptance by the seller, it forms a contract, which will form the basis for the final document to be prepared by a lawyer or notary. It includes the legal and/or municipal description (street address), purchase price, closing date, mortgage and terms of repayment and lists specific items included as part of the sale.

Specification Form:

A document stipulating the type, quantity and sometimes the quality of materials and workmanship required in the construction of a particular house.

Title:

Evidence of ownership.

Zoning Laws:

Municipal laws restricting the use of land for specific purposes