Appraisal: An estimate of a property’s value determined for a mortgage loan. A professional appraiser conducts an appraisal, and the property’s value is based on recent sales similar to the subject property.

 

Assessment: An estimate of a property’s value determined by the BC Assessment based on a valuation date of July 1st each year. Usually, an assessment is for property tax purposes and completed by a government employee.

 

Amendment: A legal document used to change or “amend” terms agreed to in the original purchase and sale contract. For instance, if a buyer wants to change the completion date from August 15th, 2021, to August 21st, 2021, all parties to the transaction must sign and agree upon the contract of purchase and sale amendment changes.

 

Addendum: A legal document attached to and forming part of the contract of purchase and sale. For instance, your REALTOR® would use an addendum to add terms and conditions to the contract of purchase and sale. For example, a financing or home inspection condition will be included in an addendum for all parties to agree to.

 

Appreciation: An increase in the value of an asset over time.

 

Assignment: The ability to “assign” a contract of purchase and sale to another party before the completion date.

 

Adjustment Date: The adjustment date is when property taxes, insurance, strata fees (if applicable), or utility payments are adjusted to. The adjustment date is often the same as possession, but it can be negotiated in the contract of purchase and sale.

 

Back-up Offer: A buyer can sometimes submit a back-up offer after there is already an accepted offer. However, there cannot be a back-up to the back-up offer.

 

Closing Costs: Additional costs such as property transfer tax, lawyer or notary fees are due at closing and prepared by a lawyer or notary in the statement of adjustments.

 

Conditions (a.k.a. “Subject-To’s’): Conditions are included in a contract of purchase and sale to primarily protect the buyer and allow the buyer to conduct their due diligence. However, there can be conditions for the benefit of the seller or for the benefit of both the buyer and the seller.

 

Contingency Reserve Fund: Under the Strata Property Act, a strata corporation must have a contingency reserve fund to account for expenses that occur less than once a year or not at all. For example, the expense of an elevator replacement or a new roof could be taken out of the contingency reserve fund. A portion of each owner’s strata fees is transferred to the contingency reserve fund each month.

 

Contract of Purchase and Sale: A legally binding contract between a buyer and seller that sets out terms, conditions, and rights of a sale.

 

Comparative Market Analysis (CMA): An analysis completed by your REALTOR® to determine a property’s market value. Calculated using active, pending, and sold listings similar to the subject property. Your REALTOR® may also look at cancelled and expired listings.

 

Conveyancing: The process of preparing documents to transfer the legal title of a property from a seller to a buyer.

 

Court Ordered Sale: Property is sold on an “as is where is” basis.

 

Completion Date: The date that legal ownership transfers from the seller to the buyer and the date that the proceeds of the sale get transferred to the seller.

 

Counter Offer: When a seller or buyer “counters” an initial offer to change the terms and conditions. The initial offer is rejected and replaced with the counter offer.

 

Days on Market: A measure of market conditions. A low day on the market metric (DOM) could indicate a competitive market with low supply and many buyers. On the opposite, when there’s a high DOM, it could suggest a less competitive market as listings take longer to sell. Days on Market indicates how long a property is listed on the MLS before it sells, the listing expires, or the property gets re-listed.

 

Due Diligence: Allows the buyer to look into facts about the physical and financial condition of a property. Some examples of due diligence can include a property inspection, lawyer or accountant review, or an evaluation of zoning regulations. The due diligence period is often the days or weeks in between an accepted offer and condition removal.

 

Deposit: A buyer’s deposit forms part of the down payment when the contract is fulfilled. While the deposit amount can be negotiated, it is often between 3%-5%.

 

Down Payment: The cash you have saved to put towards your home purchase. Usually, the down payment amount is anywhere between 5% – 20% of the purchase price.

 

Easement: Grants someone a right to use your property, often for a specific purpose, without giving them actual ownership. For example, there can be an easement on the property for a utility company to access your property.

 

Encroachment: A structure, fence, or another object that illegally extends or “encroaches” onto a neighbouring private property or public property.

 

Encumbrance: An interest or right in real property that may reduce the property’s value or impact the property’s transferability. An encumbrance can be financial such as a lien, or non-financial such as an easement.

 

Foreclosure: A legal process where the lender takes ownership of the property and attempts to sell the mortgaged property when the mortgagor defaults on their loan.

 

Freehold: Also known as fee simple. Freehold is the highest form of property ownership. You own and have full control of the structure and the land that it is built on subject to the rights of the crown, bylaws, and any other restrictions in place at the time of purchase.

 

Home Inspection: A general objective examination of a home by a qualified home inspector. Often, buyers will have a home inspection as one of their conditions. In busy markets, sellers may opt to have a pre-listing home inspection done in advance for prospective buyers.

 

Leasehold: With leasehold ownership, you own the condo unit, townhome, or house, but you don’t own the land. With a leasehold property, the owner has the right to temporarily occupy the land as a long term residential lease for a fixed period (often up to 99 years) or until you sell your right to another person.

 

Lien: A financial claim by a person or company registered against a property’s title for payment of some debt.

 

Listing Agreement: A legal contract between a homeowner and a real estate brokerage. The contract outlines the terms and conditions of the listing. Also, it grants the listing agent as a designated agent.

 

Market Value: What a property is worth in a competitive market.

 

Multiple Listing Service (MLS*): A cooperative system used by REA

 

Offer: A buyer makes an offer to purchase a sellers’ property. It is often conditional, and the offer becomes binding once accepted.

 

Pending: When conditions have been removed, and a buyer has paid their deposit, the listing changes from active to pending on the MLS. The listing is advertised as sold for marketing purposes.

 

Probate: A will is validated through a process called probate, and it is a court-issued document once an owner of a property passes away.

 

Pending: A property changes from active to pending on the MLS once all conditions have been removed and the buyers’ deposit has been received.

 

Property Disclosure Statement (PDS): A property disclosure statement is a required document filled out by the seller(s) before listing their property on the MLS.

 

Property Transfer Tax: Tax that is due at closing and is paid by the buyer when a property is registered at the BC Land Title Office.

 

Possession Date: The date that you get the keys to your new home!

 

Right of Way: Could be on title for a utility company to access the land. For example,

 

Real Estate: Defines land, buildings, permanent fixtures, and all of the resources attached to it.

 

Statement of Adjustments: Prepared by a lawyer or notary.

 

Strata Corporation: A legal entity created by a deposit of the strata plan at the Land Titles Office. The Strata Property Act governs a strata corporation.

 

Sold: When the title has transferred from the seller to the buyer and the legal ownership has changed.

 

Title: A document that shows legal ownership of a property.

 

Tenancy: A legal agreement governed by the Residential Tenancy Act where someone has the right to occupy a property in return for rent paid to the owner. A tenancy can either be fixed-term or month-to-month.

 

Zoning Regulations: A set of regulations for land use that divides areas into separate districts with varying land use and restrictions.