Buying a home is a huge commitment and one of the biggest financial investments you’ll ever make. If you’ve never done this before, you can expect to get hit with a barrage of real estate terms and jargon that might leave your head spinning. Your RE/MAX agent is there to guide you through the process, but for the keeners who want to hit the books before you hit the streets, below is a list of some common real estate terms. Read them, learn them. By familiarizing yourself with these home-buying basics, you’ll be better equipped to make informed decisions and a wise investment.
Homebuyer’s Glossary: 28 Real Estate Terms to Know
The length of time allotted to paying off a loan – in home-buying terms, the mortgage. Most maximum amortization periods in Canada are 25 years.
In a balanced market, there is an equal balance of buyers and sellers in the market, which means reasonable offers are often accepted by sellers, and homes sell within a reasonable amount of time and prices remain stable.
A short-term loan designed to “bridge” the gap for homebuyers who have purchased their new home before selling their existing home. This type of financing is common in a seller’s market, allowing homebuyers to purchase without having to sell first.
In a buyer’s market, there are more homes on the market than there are buyers, giving the limited number of buyers more choice and greater negotiating power. Homes may stay on the market longer, and prices can be stable or dropping.
This is the last step of the real estate transaction, once all the offer conditions outlined in the Agreement of Purchase and Sale have been met and ownership of the property is transferred to the buyer. Once the closing period has passed, the keys are exchanged on the closing date outlined in the offer.
The costs associated with “closing” the purchase deal. These costs can include legal and administrative fees related to the home purchase. Closing costs are additional to the purchase price of the home.
A form of ownership whereby you own your unit and have an interest in common elements such as the lobby, elevators, halls, parking garage and building exterior. The condominium association is responsible for maintenance of building and common elements, and collects a monthly condo fee from each owner, based on their proportionate share of the building. Condos often have guidelines regarding noise, use of common areas and allowable renovations within the units themselves.
An up-front payment made by the buyer to the seller at the time the offer is accepted. The deposit shows the seller that the buyer is serious about the purchase. This amount will be held in trust by the agent or lawyer until the deal closes, at which point it is applied to the purchase price.
The down payment is the amount of money paid-up front for a home, in order to secure a mortgage. In Canada, the minimum down payment is 5% of the home’s total purchase price. Down payments less than 20% of a home’s purchase price require mortgage loan insurance. The selling price, minus the deposit and down payment, is the amount of the mortgage loan.
The difference between a home’s market value and the amount owing on the mortgage. This is the portion of the home that has been paid for and is officially “owned.”
A fixed-rate mortgage guarantees your interest rate and for a pre-determined amount of time, typically 5 years. When the term expires, you have the option to stay with the same lender or switch to a different one.
A form of ownership whereby you own the property and assume responsibility for everything inside and outside the home.
Gross Debt Service
The percentage of your total monthly income that goes toward housing costs. Canada Mortgage and Housing Corp. recommends your GDS remains at or below 35%. Check out CMHC’s Gross Debt Service calculator.
A high-ratio mortgage is a mortgage where the borrower has less than 20% of the home’s purchase price to make as the down payment. A high-ratio mortgage with a down payment between 5% and 19% of the purchase price requires mortgage loan insurance. In Canada, 5% is the minimum amount required for the down payment.
A qualified professional provides a market value assessment of a home based on several factors such as property size, location, age of the home, etc. This is used to satisfy mortgage requirements, giving mortgage financing companies confirmation of the mortgaged property’s value.
Home Buyers’ Amount
This is a $5,000 non-refundable federal income tax credit on a qualifying home, providing up to $750 in tax relief to assist first-time buyers with purchase-related costs.
Home Buyers’ Plan
A federal program allowing first-time homebuyers to withdraw up to $35,000 interest-free from their Registered Retirement Savings Plan (RRSP) to help purchase or build a qualifying home. The borrowed amount must be repaid within 15 years to avoid paying a penalty.
The home inspection is performed to identify any existing or potential underlying problems in a home. This not only protects the buyer from risk, but also gives the buyer leverage when negotiating a reduced selling price.
A land survey will identify the property lines. This is not required to purchase a home, but it is recommended and may be required by the mortgage lender to clarify where on the property the owner has jurisdiction. This is important if issues arise between neighbours or the municipality, should the owner wish to make changes in the future such as installing a pool, fence or other renovations involving property lines.
Land Transfer Tax
This is the tax payable by the buyer to the province in which the transaction occurred upon transferring land. The amount varies depending on the municipality, the size of the land and other factors. Most provinces have Land Transfer Tax, though it may have a slightly different name (such as property purchases tax). If you are a first-time homebuyer, you may be eligible to receive a rebates, which is typically processed at the same time as the land registration, so the costs can be offset.
Mortgage Loan Insurance
If your down payment is less than 20% of the purchase price of the home, mortgage loan insurance is required. It protects the lender in case of payment default. Premiums are calculated as a percentage of the down payment, changing at the 5%, 10% and 15% thresholds.
A mortgage pre-approval helps buyers understand how much they can borrow before going through the mortgage application process. Allows you to make an immediate offer when you find a home, since you know how much you’ll be approved for this this lender, and locks in the current interest rate for a period of time insulating you against near-term rate increases.
An offer is a legal agreement to purchase a home. An offer can be conditional on a number of factors, commonly conditional on financing and a home inspection. If the conditions are not met, the buyer can cancel their offer.
Transferring your mortgage (and the existing interest rate and terms) from one property to another.
In a seller’s market, there are more buyers than there are homes for sale. With fewer homes on the market and more buyers, homes sell quickly in a seller’s market. Prices of homes are likely to increase, and there are more likely to be multiple offers on a home. Multiple offers give the seller negotiating power, and conditional offers may be rejected.
Title insurance is not mandatory in Canada, but it is highly recommended to protect both the buyer and the mortgage lender against losses related to the property title or ownership, such as unknown title defects, existing liens against the property’s title, encroachment issues, title fraud, errors in surveys and public records, and title-related issues that could prevent you from selling, leasing or obtaining a mortgage. Your lawyer can advise you on this.
Variable Rate Mortgage
A variable rate mortgage fluctuates with the prime rate. Your monthly payments remain the same, but the proportion of your payment going toward principal versus interest can change.
The home-buying process completed by means of technology in place of face-to-face contact. Some common technology tools include 360 home tours and video showings, video conference calls, e-documents, e-signatures and e-transfers.
Beloved treehouse attracts attention of Fredericton real estate agent – CTV News Atlantic
The real estate market is hot, but how often would a treehouse potentially add value for house hunters?
Consider one Frederiction creation, which isn’t your average treehouse.
Linda Kerry says her son’s treehouse is the most cherished part of her current home.
“Sam’s dad, he’s a miner and he was between contracts and he’s a jack-of-all trades,” Kerry says. “Whenever I think you can’t do something, he’ll do it. So I said to him, ‘I really want a treehouse,’ and he built me a treehouse.”
It might not be Harry Potter’s Platform 9 3/4 or a wardrobe to Narnia, but inside it’s pretty magical.
“I don’t know how he did it,” Kerry said. “He is also a lover of trees and did it in the sense that there’s no nails in the tree itself. So he cantilevered the treehouse in itself within the limbs of the tree.”
When the home itself was listed for sale, it was the treehouse that got real estate agent Jeremy Deering most excited.
“In the winter it might be cold, it could use some insulation, as far as like an inspection would go it’s pretty well up to code,” Deering said. “It really was designed well and designed with the tree in mind. I don’t think you could get some backwoods carpenter to do this. I think someone with real skill had to do this.”
While Linda and her son Sam might not be ready to put down new roots just yet they’re happy for the memories this one gave them.
Halifax Real Estate: A Top Canadian Market to Watch – RE/MAX News
Before the coronavirus public health crisis devastated the Canadian economy, analysts and investors were keeping a keen eye upon trends emerging within key Canadian real estate markets, including the Halifax real estate market. For years, parts of the Maritimes suffered from economic stagnation due to high unemployment, capital outflows and a declining population. But in the months leading up to the COVID-19 pandemic, many homebuyers started homing in on the East Coast.
Halifax has been a fascinating city to watch, particularly after the approval of the Centre Plan. In 2017, the municipal government gave the go-ahead to an initiative that would improve the development of Halifax’s urban core. The campaign would lead to expanded public transit, new commercial and residential buildings, new and buried utility lines, and pedestrian-friendly walkways. The efforts are expected to attract businesses and workers from across the country and around the world.
With it, of course, would come a booming real estate market. In line with the Plan’s projections, Halifax is witnessing an economic resurgence, and this could only be the beginning.
Halifax Real Estate: A Top Canadian Market to Watch
In August, the Halifax-Dartmouth housing market experienced a 20.3-per-cent year-over-year increase in residential sales, with 769 transactions reported by the Canadian Real Estate Association (CREA). The residential average price also surged 18.2 per cent to $372,982 in August.
Year-to-date sales activity in the region was down 1.1 per cent in August, with 4,693 homes trading hands. However, Halifax home prices have still climbed 11.6 per cent to an average of $356,687.
This is a continuation from what has been occurring in the aftermath of the COVID-19 outbreak, with homebuyers scooping up properties at a rapid rate.
Housing experts anticipate these bullish trends will persist heading into the fall. According to the RE/MAX Fall Market Outlook Report, the inventory shortage and increased demand will boost average housing prices in Halifax by 10 per cent during the remainder of 2020.
In Halifax and across Nova Scotia, as demand continues to blossom, industry observers are warning that supply will continue to fall, which has sparked concern among federal officials. Andy Fillmore, the Member of Parliament for Halifax and a former city planner, says that the housing shortage could soon price too many Halifax homebuyers out of the market.
“If we want to have a city that reflects the full diversity of everyone who lives in our city … we have to put in place mechanisms so that we can have the diversity of income earners … especially when it comes to folks who traditionally lived in those areas and find themselves being priced out,” said Fillmore in an interview with CBC News, adding that all three levels of government and the private sector need to devise a plan to address this problem.
With interest rates being as low as they are, developers might take advantage of the ultra-low borrowing costs and invest in new housing developments. Fillmore did also say that municipal governments can modify zoning regulations, something that could stimulate new supply. Until then, the Halifax housing market could be tighter for the next 12 months, which would translate to higher valuations.
During this time, experts say it is also important to keep an eye on mortgage deferrals, says Kean Birch, an associate professor at York University.
“I find it worrying that housing prices are continuing to rise. The reason being that we don’t know what’s going to happen once the mortgage payment deferral ends, and the consequences actually could be dramatic across the board. And it could be highly inequitable as well,” said Birch in an interview with Halifax Today.
Is Atlantic Canada the Next Real Estate Hotspot?
Is Atlantic Canada finally catching a break? For a long time, the Maritimes had endured economic stagnation, capital flight, and a sliding population. This could be changing now, based on the latest real estate data. Housing prices are soaring, the jobs are coming back, and economic development is accelerating. In these respects, the good times are returning to Halifax, St. John’s, Charlottetown and Fredericton.
But the momentum of this upswing will hinge on what happens over the next few months. Although the consensus is that Halifax and the rest of Atlantic Canada will still record strong housing numbers, fears over the second wave of the coronavirus and general uncertainty could weigh on the real estate market as we head into the last quarter of 2020.
Real estate site that backstops home buyers raises $100 million to expand across Canada – Financial Post
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Properly is playing the technology disruption card to smooth real estate deals somewhat akin to apartment hunter Compass in the U.S. as it bets on the desire of modern consumers to sidestep life’s hassles, whether it be cooking with Skipthedishes food delivery or grocery shopping with HelloFresh meal kits. The Canadian real estate industry continues to accelerate in most markets outside of the Prairies, which has been marred by pandemic-induced oil price woes.
Properly uses computer models and market analysis to determine equity values, which can be combined with mortgage offers from Canada’s large five banks including special rates with the Canadian Imperial Bank of Commerce for purchasing your next home while you’re still in your current one. Then it offers staging and handyman tweaks for selling it, all for a 5 per cent commission, the industry standard, Ruparell said.
Many brokerages offer similar services, noted Waterloo, Ont.-based Remax agent Dawn Peace, but few clients take them on because the current market prices move so fast.
“Until you sell you don’t know how much exactly you have in your hands, and you might get $100,000 above asking and you might not,” Peace said. “Until it’s technically exposed to the real market with real buyers, you don’t know.”
Ruparell said: “The process of buying and selling a home has remained complicated and stressful and uncertain and we don’t believe that should be the case. There’s an opportunity for us at the same price you’d work with a traditional agent to provide this additional value service and do so profitably.”
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