Frequently Asked Questions and Real Estate Terms:
Click any of the terms below to be linked directly to its definition.
The nature of the assistance or representation provided to a person in a real estate transaction.
Agency Disclosure
Before any person is assisted or represented in a real estate transaction, each licensee must now disclose:
1. The nature of the assistance or representation being provided to the person by the licensee;
2. Whether the licensee is or will be acting in the transaction on behalf of any other person, in any capacity; and
3. Whether the licensee is, or will be, receiving remuneration relating to the real estate transaction from any other person, and, if so, the nature of the licensees relationship with each such other person or persons.
Agent
The real estate company under which the individual sales person who is representing you is licensed.
Agents’ Open
A special opportunity for the real estate community to physically view a property currently for sale. Also called an Agents’ Open House.
Buyer’s Agent
An exclusive arrangement between a realtor and a buyer, to locate real property for the buyer to purchase, and to represent the buyer in negotiating the terms of purchase of real property.
Broker
A broker is a middleman or agent, who buys or sells real estate for a company, firm, or individual on a commission basis.
Comparative Market Analysis (CMA)
A “CMA” is a report that shows prices of homes that are of comparable value to a subject home and that were recently sold, are currently on the market, or were on the market, but not sold within the listing period.
Closing Date
The date when the title of the property is transferred from the seller (by a lawyer or notary public) to the buyer and the funds of the contract are transferred from the buyer to the seller.
Completion Date
The same as the “Closing Date.”
Contract of Purchase and Sale
The legal document used in a real estate transaction between the buyer and seller.
Deposit or Down Payment
Standard practice requires a buyer to place a minimum of 5% of the purchase price in the agent’s trust account, upon acceptance or subject release of a “Contract for Purchase or Sale.”
Escrow
(An American term not used in Canadian real estate transactions.)
Funds paid by one party to another (the escrow agent) to hold until the occurrence of a specified event, after which the funds are released to a designated individual. In American mortgage transactions an escrow account usually refers to the funds a mortgagor pays to the lender at the time of the periodic mortgage payments. The money is held in a trust fund provided by the lender for the buyer. Such funds should be adequate to cover yearly-anticipated expenditures for mortgage insurance premiums, taxes, hazard insurance premiums, and special assessments.
Form B
This document is requested by the seller (who pays for it). It is forwarded to the prospective buyer for review, prior to purchase. The Strata Management Company provides this document and it independently states details of the strata unit and the strata corporation.
MLS
Multiple Listing Service. An MLS is an organization that collects, compiles, and distributes information about homes listed for sale by its members, who are real estate agents.
Mortgage
A lien or claim against real property, given by the buyer to the lender, as security for money borrowed.
Mortgage Broker
This is a company that arranges mortgage financing for a buyer.
Mortgage Insurance
Premiums paid by the borrower to the lender to protect the lender’s loss in insured mortgage transactions. (This is usually a one-time up-front payment.) Government legislation requires this insurance for mortgages valued at more than 75% of the property’s value.
Mortgage Life Insurance
This is insurance taken by the borrower (mortgagor) under the request of the mortgagee (bank / mortgage broker) to pay out the value of the mortgage in the event of the borrower’s demise.
Licensed Sales Person
See “Licensee.”
Licensee
A person licensed under the Real Estate Act, employed by an agent, to assist the public in real estate transactions.
Listing
A written agreement between an “Agent” and a “Home Owner” that allows the licensed sales person to market and arrange the sale of the owner’s home. The word “listing” is also used to refer to the “For Sale” home. A home being sold by the owner with out a real estate agent is not a listing.
Lock Box
A locked key-holding device, affixed to a “home for sale” so the real estate professionals can gain entry into the home, after obtaining permission from the listing agent.
Open House
A pre-designated time for the general public to physically inspect a property for sale, under the supervision of the listing agent.
Possession Date
The date designated in the “Contract of Purchase and Sale” for the buyer to receive keys and vacant physical possession of the property purchased.
Pre-qualifying
The process of going to the lender, before finding a home, to determine your credit worthiness, and the size of the loan available to you, based on your income, age and net worth.
Principal
This refers to someone who has engaged an agent to act for him or her on his or her behalf in a real estate transaction.
Property Inspector
A person qualified through training in building technology to render an opinion on the systems and structure of a property. For more info on choosing a Property Inspector, see here.
Property purchase transfer tax
A sales tax paid by the buyer to the Province of British Columbia on the purchase of real estate. The rate equals 1% on the first $200,000 of the purchase price, plus 1% on the balance of the purchase price.
Realtor
Realtor is often used interchangeably with licensee, real estate agent, or salesperson, and in BC is licensed under “The Real Estate Act.” A realtor can use the term realtor if he/she belongs to a local Board or Association that enforces a strict Code of Ethics.
Showing
This refers to the process of a “buyer’s agent ” or “listing agent” physically showing a “listing” (home for sale) to a prospective buyer.
Subject Removal
The elimination or release, in writing, of a subject (or condition clause) of the “Contract” by the party that it was intended to satisfy.
Subjects
Written conditions included in a contract that must be satisfied in order for the contract to be fulfilled.
If you have any questions that are not covered in our glossary of terms here, feel free to contact us at any time.