When buying or selling a home in Canada, it’s essential to understand the terminology used throughout the process. Familiarizing yourself with the key terms can help you make informed decisions and avoid misunderstandings during negotiations. In this blog post, we at Elevate Real Estate Group with Royal LePage Triland aim to provide a comprehensive guide to some of the most important Canadian real estate terms you should know.
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MLS (Multiple Listing Service)
- The Multiple Listing Service, or MLS, is a database of properties available for sale or rent, maintained by local real estate boards across Canada. By listing a property on the MLS, agents can market their properties to a wider audience and help potential buyers find their dream homes.
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Purchase Offer (also known as an Offer to Purchase)
- A purchase offer, or an offer to purchase, is a written document outlining the terms and conditions under which a buyer is willing to purchase a property. It typically includes the proposed purchase price, deposit amount, closing date, and any conditions or contingencies.
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Conditional Offer
- A conditional offer is a purchase offer that includes one or more conditions that must be fulfilled before the sale can be finalized. Common conditions include financing approval, satisfactory home inspection, and selling the buyer’s current property.
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Closing Costs
- Closing costs are the various fees and expenses associated with finalizing a real estate transaction. They typically include legal fees, land transfer tax, property tax adjustments, and mortgage-related costs.
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Deposit
- A deposit is an initial payment made by the buyer to the seller when submitting a purchase offer. This payment is held in trust and applied towards the purchase price upon closing. A deposit shows the seller that the buyer is serious about purchasing the property.
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Home Inspection
- A home inspection thoroughly examines a property’s structure, systems, and components performed by a qualified professional. It helps buyers identify any potential issues with the property and can be a condition in a purchase offer.
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Mortgage Pre-Approval
- Mortgage pre-approval is when a lender evaluates a potential borrower’s creditworthiness and determines the maximum amount they are willing to lend. This helps buyers know their budget and shows sellers that they are financially capable of purchasing a property.
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Land Transfer Tax
- Land transfer tax is a provincial or municipal tax charged when property ownership is transferred from one party to another. The amount varies depending on the property’s value and location.
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CMHC (Canada Mortgage and Housing Corporation)
- CMHC is a federal Crown corporation that provides mortgage insurance to lenders for borrowers with a down payment of less than 20% of the property’s purchase price. This insurance protects lenders in case of borrower default.
In Conclusion
Understanding key Canadian real estate terms is crucial for a smooth and successful home buying or selling experience. As your trusted real estate professional, Elevate Real Estate Group with Royal LePage Triland is here to guide you through the process and ensure you feel confident at every step. If you have any questions or need assistance with your real estate journey, please don’t hesitate to contact us.
Elevate Real Estate Group (Brittany Wurfel, Jeremy Odland, Victoria Rowe, & Stewart Blair)
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Want more details on the current market? You can find more information about the current market here: London & St Thomas Association of Realtors.