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Real Estate Lingo

Real Estate Lingo


As Realtors, we often use lingo that may sound foreign to some of you. In an effort to bring some clarity to our Realtor language, we have prepared a basic real estate dictionary for your enjoyment and education.


Appraisal vs. Home Evaluation/Market Value – An appraisal is something that a Financial Institution/Lawyer/Accountant will look at to determine property value. The appraisal is based on several factors such as replacement cost, recent comparable sales and/or income earning potential of the property. Whereas, a home’s market value is something that will consider the above, as well as it will reflect the current market trends, supply and demand, factors in the local economy and thus the probable selling price given a reasonable time on the market.


Closing – Is also often referred to as the date of possession. This is the day when the property officially changes hands from the seller to the buyer.


Closing Costs – Costs incurred upon the closing of a property sale, ie legal fees, land transfer tax, appraisals, surveys, property taxes, insurance, real estate fees etc.


Comparable or “Comp” – is a property that is similar to your home. It will usually be a recent sale (within a year). Comparables are often used to help determine a market value for your property.


Conditions/Conditional Offer – This is something that needs to be completed in order for an offer to be considered finalized, thus the house being SOLD. Common conditions are financing approval, sale of buyer’s home and a home inspection.


Counteroffer – This is a seller’s response to a buyer’s initial offer.


Deposit – Most offers will include a deposit. The deposit does not need to be any specific amount but your Realtor may suggest a certain based on various factors such as competing offers, value of the property or a seller’s request. The deposit is there to give the seller security and to show the strength of the buyer. Deposits are refundable if an offer’s conditions are not met.


Down payment – A Financial Institution will have down payment requirements to approve a mortgage on a property purchase. This can change depending on the type of property ie. Residential, commercial, mobile home, vacant land etc. The down payment requirements will also change depending on whether or not the mortgage will be conventional (20% down payment or more) or high ratio (less than 20%) and therefore mortgage insurance will be required (eg. CMHC).


Encroachment – When a neighbouring or adjoining structure is located beyond the boundaries or limits of the property


FSBO – Pronounced “Fizbo”. It stands for…For Sale By Owner. Also known as a private sale.


Inspection – Buyers may request an inspection of the home or in some cases just certain aspects of the home or property. The inspection can be done by a professional or someone else that the buyer chooses. At times, a Realtor may suggest doing an inspection prior to submitting an offer but normally it will be added as a condition to the offer.


Land Transfer Tax – A provincial tax that a buyer is required to pay at their lawyer’s office on the purchase of property. Land transfer tax is a percentage and therefore is reflective of the purchase price of the property.


Lender – Bank, Credit Union, Mortgage Broker.


Lien – Something that is legally registered on the title of your property from a third party. Examples include a mortgage from a lender.


MLS – Multiple Listing Service, also known as This is a system where all Realtors, across Canada, regardless of which company they work for, can post listings for the public and other Realtors to access information on.


Market Value – The probable selling price of your home given reasonable time on the market.


Offer to Purchase – The legal document that is filled out and submitted to a seller on the purchase of property. Includes things such as…price, deposit, inclusions/exclusions, possession date, conditions along with many more potential details.


Pending Sale– When an offer has been accepted on a property but there are still conditions waiting to be completed.


Pre-Approval – The process prior to submitting an offer on a home where a buyer’s lender has reviewed and established a realistic purchase price range based on the buyer’s present financial position. This will include things such as down payment, credit rating, current employment, income etc.


Property Disclosure Statement (PDS) – The PDS is completed by the seller and is made up of 19 questions which will give the buyer important information about any defects or deficiencies of the house/property. This can be requested in the offer to purchase agreement.


I hope this will help you as buyers and sellers to better understand some of the lingo we use. If you have any questions about real estate please get in touch with your Choice agent, we’d love to chat with you!