Common terms
As-is — When a seller agrees to sell a property in its current condition without making any repairs or renovations.
Buyer’s agent / listing agent — A real estate agent representing the buyer or the seller in a transaction. You should always be aware of who is representing you during the process.
Closing — The final step in a transaction, where the buyer and seller sign the necessary paperwork, exchange funds, and transfer the title of the property to the buyer.
Closing costs — The fees and expenses associated with buying or selling a home, including title services, taxes, insurance, lender fees, and commissions.
Days on market (DOM) — The number of days a home has been listed for sale.
Due diligence — The process buyers go through to make an informed purchase decision. It usually includes inspecting the property, obtaining a title search, and researching the neighbourhood.
Multiple listing service (MLS®) — A database of real estate listings maintained by a local board that allows brokers to share information about properties and list them for sale.
REALTOR® — A trademarked term for a real estate professional who is a member of the National Association of REALTORS® and abides by its Code of Ethics.
Conventional sale — A standard transaction that involves a buyer, seller, and real estate agent.
Probate sale — A transaction that involves the sale of a deceased person’s property in order to settle their estate and debts.
Rent back — An agreement in which the seller rents the home back from the buyer after the sale.
Subject to inspection — A clause that allows a buyer to inspect a property before closing.
Financial & documentation
Financial & documentation — Documents and financial records needed to buy a home, such as bank statements, proof of employment, and tax returns.
Adjustable-rate mortgage (ARM) — A mortgage loan with an interest rate that fluctuates over time.
Debt-to-income ratio — A measure of a borrower’s ability to repay a loan, calculated by dividing total monthly debt payments by total monthly income.
Earnest money deposit — A deposit made by a buyer to show they’re serious about purchasing a home. It’s usually held in trust until closing.
Equity — The difference between what a homeowner owes on a mortgage and the current market value of the home.
Fixed-rate mortgage — A mortgage loan with an interest rate that remains the same for the entire term.
Mortgage pre-approval letter — A document issued by a lender stating the amount of mortgage a borrower is approved to receive.
Pre-approval — The process of verifying a borrower’s financial information and issuing a pre-approval letter.
Pre-qualification — A preliminary assessment of a borrower’s financial information to determine if they’re eligible for a loan.
Principal — The amount of money borrowed on a loan, not including interest.
Proof of funds — A document that proves a buyer has the financial resources to purchase a home — for example, bank statements, letters of credit, or cashier’s cheques.
If you’re thinking of buying or selling, get in touch and we can set up a no-obligation meeting to discuss the best way forward. I’ll guide you through the details of these steps and more, based on your needs.
