Amortization: The period of time required to completely pay off a mortgage debt, assuming all payments are made on time. In Ontario, the most common amortization period is 25 years.
Appraisal: A professional estimate of a property's market value, typically required by lenders before approving a mortgage.
As-Is: A term used in real estate transactions signifying that a property is being sold in its current condition, with all existing faults and issues. The buyer accepts the property's current state without the seller making any repairs or improvements.
Assessed Value: The value of a property as determined by a public tax assessor for the purpose of calculating property taxes. In Ontario, this value can sometimes be significantly lower than the actual market value or purchase price.
Chattels and Fixtures: Chattels are movable personal property not permanently affixed to the land (e.g., furniture, appliances), while fixtures are items attached to the property in a way that makes them part of it (e.g., built-in appliances, light fixtures). The distinction is important in real estate transactions as fixtures typically stay with the property unless otherwise specified.
Closing Costs: Additional expenses beyond the purchase price that buyers must pay on closing day. These include legal fees, land transfer taxes, and disbursements, typically ranging from 1.5% to 4% of the home's purchase price in Ontario.
Closing Date/Completion Date: The date when the property is legally transferred from the seller to the buyer, and the purchase funds are paid.
CMA (Comparative Market Analysis): A technique used in real estate to determine a property's value by comparing it with similar properties recently sold or listed in the area.
CMHC: Canada Mortgage and Housing Corporation, a Crown corporation that provides mortgage loan insurance and housing market analysis.
Conditional Offer: An offer to purchase that includes one or more conditions that must be met before the sale becomes final, such as securing financing or completing a satisfactory home inspection.
Fixed vs. Variable Mortgage: A fixed-rate mortgage has an interest rate that remains constant for the term of the mortgage, while a variable-rate mortgage has an interest rate that can fluctuate based on market conditions.
Home Appraisal: An unbiased estimate of a property's market value, typically conducted by a certified appraiser. It's a crucial step in the mortgage approval process in Canada.
Home Inspection: An examination of a property's condition, conducted by a professional inspector. While not legally required in Ontario, it's highly recommended to identify any potential issues with the property.
Irrevocable Offer: An offer that cannot be changed or withdrawn by the party that submitted it for a specified period. The other party must decide to accept, reject, or counter the offer within this irrevocable period.
Land Transfer Tax: A tax paid by the buyer when purchasing property in Ontario. In Toronto, there's an additional Municipal Land Transfer Tax.
Pre-Approval Letter: A written agreement from a lender estimating how much they will lend a potential buyer based on their financial situation. It helps buyers understand their budget and demonstrates their seriousness to sellers.
Realtor: A licensed real estate professional who acts as an intermediary between buyers and sellers. In Ontario, Realtors must be registered with the Real Estate Council of Ontario (RECO).
Status Certificate: A document that outlines a condominium corporation's financial and legal status. It's crucial when purchasing a condo in Ontario.
Title Search: A comprehensive investigation into a property's ownership history and legal status. It's typically conducted by the buyer's lawyer to ensure there are no issues with the property's title that could affect the buyer's rights or ownership.