A Glossary Of Real Estate Terms
Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of the daily operations of a specific industry. The real estate and mortgage business is no exception.
To help you understand the terms, acronyms, and phrases regularly used in the real estate and mortgage industry, York National Realty Inc. has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your real estate and mortgage needs effectively.
A buyer’s agent is a licensed real estate professional whose job it is to find buyers their dream home, and represent their interests in the sale.
Listing agents represent the sellers’ interests in the transaction, prepping, and marketing a home for sale.
Agreement of Purchase & Sale/Contract
A purchase and sale contract, or purchase contract for short, is a binding document that outlines the terms of a property sale. When a home is “under contract,” it means the buyer and seller have signed off on the contract price and other terms of sale.
Closing is when the home sale becomes final. The closing date is set for a time that allows the buyer to conduct due diligence, such as a home inspection, and the lender to complete the underwriting process, including a home appraisal. At closing, the parties execute the final paperwork, and the buyer typically receives the keys.
Due diligence refers to researching and understanding a legal obligation before deciding to take it on. The due diligence period is the time negotiated in the purchase contract where the buyer examines the home, usually via an inspection.
An inspection happens when buyers pay a licensed professional inspector to visit the home and prepare a report on its condition and any needed repairs. The inspection often happens as part of the due diligence period, so buyers can fully assess if they want to buy a particular home as it is, ask the seller to complete or pay for certain repairs, or walk away because repairs are too costly to want to move forward with the sale.
Buyers make a formal offer on the home they want to purchase. The offer can be the full list price, or what you and your agent deem a fair market value.
The buyer’s agent puts the offer in writing, asks you to sign it, and then submits it to the seller’s agent. The seller might immediately accept it, in which case it becomes the parties’ purchase contract, or may make what’s known as a counter offer. It’s the art of negotiation, recorded in paperwork.
A title search examines public records for the history of the home, including sales, purchases, and tax and other types of liens.
During the process of buying a house, a title company will conduct this search to ensure the seller rightfully owns the home, and there are no obligations that need to be paid before the sale.
The amortization period refers to the number of years it will take to pay off your mortgage through regular payments. Most mortgages are amortized for over twenty-five years.
Fixed Rate Mortgage
With fixed rates, the interest rate on your home loan is set for the term of the mortgage. Fixed rate mortgages offer the peace of mind of consistency: you’ll know exactly how much you’ll owe at the end of each term.
Variable Rate Mortgage
Also known as a floating rate or adjustable rate, this type has an interest rate that fluctuates with the prime lending rate. The main benefit of variable rate mortgages is lower interest rates, but in return, mortgagors (homeowners) take on risk: if the prime rate goes up, a large chunk of your payment will go toward the interest, not paying down your principal. The result is that your mortgage could take longer to pay off and cost you more in interest.
Principal is the amount initially borrowed for your home purchase. The balance of this amount will go down as you make regular mortgage payments. (Your payments go toward a portion of the principal, as well as the loan interest and, for those with high-ratio mortgages, mortgage insurance.)
Incapable of being recalled or revoked; unchangeable, unalterable is termed as irrevocable.
The right acquired for access over another person’s land for a specific purpose, such as for a driveway or public utilities.
A fixture, such as a wall or a fence, which illegally intrudes into or invades on public or private property, diminishing the size and value of the invaded property.
If you’re looking for experienced brokers and realtors in Aurora, Ontario, reach out to York National Realty Inc. We provide excellent real estate services for buying or selling homes, real estate properties, investment properties, estate homes, luxury homes across Newmarket, Innisfil, Barrie, King, Aurora, Bradford, Sharon, and Holland Landing. With over a decade of experience, our team of skilled realtors and brokers can deliver excellent service and quality results.