I Have No Idea What He Just Said

As we reach each new stage in our lives, we are always learning. There is especially true when we have decided to buy a home. Before you start the journey of purchasing a home, you must understand the basic vocabulary and terms used in the Real Estate industry. This knowledge will be critical when you sit down for the first time with your Real Estate Agent REALTOR®.   This knowledge is vital in today’s Ottawa market. The process of buying and selling is happening very quickly. Being prepared with the necessary knowledge and the support of your Real Estate Agent REALTOR®.  will ensure your interests are always looked after.

One of the challenges is that you will end up dealing with several different professions. These will include bank or mortgage broker, lawyer, municipal and provincial governments, home inspectors and contractors. With so many distinct offices to work with, your first step must be to contact your Real Estate Agent REALTOR®. They are the experts and are on your side. 

Real Estate Terms

• Listing Agreement: The contract between the listing broker and the owner. This allows the REALTOR® to look after all aspects of the sale of the home
• Multiple Listing Service (MLS) is a system for sharing the listing of homes to a vast audience 
• Appraisal: The estimate of the homes market value
• Assessment: The value of a property set by the local municipality. The is used to calculate your property tax
• Firm Offer: The offer to buy the home with no conditions 
• Conditional Offer: An offer that has conditions attached
• Mortgage: A contract between a borrower and a lender to repay the money borrowed to buy the home
• Canada Mortgage and Housing Corporation (CMHC): CMHC controls the Mortgage Insurance Fund, which protects NHA Approved Lenders
• Principal: The amount of money borrowed for a new mortgage
• Interim Financing: Short-term financing to help the person buying the home
• Maturity Date: The number of years it will take to pay off the mortgage 
• First Mortgage: The first security registered on a property
• High-Ratio Mortgage: A mortgage for more than 75 percent of a property’s value or price
• Assumable Mortgage: A mortgage held on a property by a seller that can be taken over by the buyer
• Blended Mortgage Payments: Equal or regular mortgage payments consisting of both a principal and an interest component
• Variable Rate Mortgage: The rate of interest may change 
• Closed Mortgage: A mortgage that cannot be prepaid, renegotiated or refinanced without significant penalties
• Debt Service Ratio: The percentage of a borrower’s gross income that can be used for housing costs
• Closing Date: The date when the deal is final, and the new owner can move in

Now You Are Ready

Understanding these terms is only part of the learning the necessary Real Estate knowledge. This will help you understand the buying and selling process. Your  Real Estate Agent REALTOR®. will help you with any other terms that you will need to know. Buying or selling your home is a very emotional time for everyone in the family. Having this knowledge and a trusted Agent will allow you to understand all the steps in the process and reduce your stress.