Glossay of Real Estate Terms

If you’re buying a home for the very first time, the process may seem a little daunting. After all, buying a home is probably one of the biggest investments you’ll ever make. It helps to have a REALTOR® on your team — someone who speaks the language of real estate very well.

A REALTOR® has the experience and the knowledge to guide you through the process of buying your first home and can help take the mystery out of the many terms, phrases and clauses you will encounter.

The following glossary, an excerpt from the Ontario Real Estate Association’s “How to Buy Your Home” book, provides definitions of some of the most common real estate terms you are likely to come across.

The book also fully explains the process of buying a home and is available free-of-charge by calling me at 416-258-6053.

Amortization: The number of years it takes to repay the entire amount of a mortgage.

Appraisal: An estimate of a property’s market value, used by lenders in determining the amount of the mortgage.

Appreciation: The increase of a property’s value over time.

Assessment: The value of a property set by the local municipality, for the purposes of calculating property tax.

Assumable Mortgage: A mortgage held on a property by the seller that can be taken over by the buyer, who then accepts responsibility for making the mortgage payments.

Blended Mortgage: A combination of two mortgages, one with a higher interest rate than the other, to create a new mortgage with an interest rate somewhere between the two original rates.

Blended Mortgage Payments: Equal or regular mortgage payments, consisting of both a principal and an interest component. With each successive payment, the amount applied to interest decreases and the amount applied to the principal increases, although the total payment doesn’t change. (Exception – see variable rate mortgages.)

Bridge Financing: Money borrowed against a homeowner’s equity in a property, usually for a short term, to help finance the purchase of another property or make improvements to a property being sold.

Buy-down: When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and market rate directly to the lender or to the purchaser, in one lump sum or monthly instalments.

Closing: The real estate transaction’s completion, when the parties involved agree that all legal and financial obligations have been met, and the deed to the property is transferred from the seller to the buyer.

Conventional Mortgage: A first mortgage issued for up to 75 per cent of the property’s appraised value or purchase price, whichever is lower.

Counteroffer: One party’s written response to the other party’s offer during purchase negotiations between buyer and seller.

Debt Service Ratio: The percentage of a borrower’s gross income that can be used for housing costs, including mortgage payment and taxes (and condominium fees, when applicable).

Deed: A legal document that conveys (transfers) ownership of a property to the buyer.

Easement: A legal right to use or cross (right-of-way) another person’s land for limited purposes. A common example is a utility company’s right to run wires or lay pipe across a property.

Encroachment: An intrusion onto an adjoining property — such as a neighbor’s fence, storage shed or overhanging roof line that partially (or even fully) intrudes onto your property.

Equity: The difference between the price for which a property can be sold and the mortgage(s) on the property. Equity is the owner’s “stake” in a property.

Foreclosure: A legal process by which the lender takes possession and ownership of a property when the borrower defaults on the mortgage obligations.

High-Ratio Mortgage: A mortgage for more than 75 per cent of a property’s appraised value or purchase price.

Land Transfer Tax: Payment to the provincial government for transferring property from the seller to the buyer.

Lien: Any legal claim against a property, filed to ensure payment of a debt.

Mortgagee: The lender.

Mortgage Insurance: Government-backed or private-backed insurance protecting the lender against the borrower’s default on high-ratio (and other types) of mortgages.

Mortgagor: The borrower.

Multiple Listing Service (MLS): A system for relaying information to REALTORS® about properties for sale.

Prepayment Privilege: A mortgage feature that allows the borrower to prepay a portion or all of the principal balance with or without penalty. This privilege is frequently restricted to specific amounts and times.

Principal: The mortgage amount initially borrowed, or the portion still owing on the mortgage. Interest is calculated on the principal amount.

Status Certificate: A written statement of a condominium unit’s current financial and legal status.

Variable-Rate Mortgage: A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market interest rates. If market rates go up, a larger portion of the payment goes to interest. If rates go down, a larger portion of the payment is applied to the principal.

Vendor-Take-Back Mortgage: When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.

Zoning Regulations: Strict guidelines set by municipal governments regulating how a property may or may not be used.

REALTOR® is a registered trademark of REALTOR Canada Inc., a company owned equally by The Canadian Real Estate Association and the National Association of REALTORS® and refers to registered real estate practitioners who are members of The Canadian Real Estate Association. Used under license.

Quick ways to spruce up your home

Sometimes, all it takes is a few simple fix-ups to improve the look of your home and make it more marketable. Even if you don’t plan to sell in the near future, a change of face can make your home more comfortable and appealing.

If your kitchen, bathroom and other rooms in your home look weary and tired but you can’t afford to tear everything out and start over again, here are a few cost-effective solutions to consider:

Re-surface cabinets and counter tops
This is the way to go if you’re happy with the layout of your kitchen, for example, and want to avoid a major renovation. Re-surfacing counters and cabinets will give you a whole new look for a lot less money.

Visit home improvement showrooms and see what products and styles are available. You can also ask a design consultant to come to your home and recommend different options. Sometimes, just painting the cabinets and changing the hardware can transform the look of a kitchen or bathroom overnight.

Update your floors
With today’s many flooring options, there’s no need to put up with worn carpets and tile floors. You can choose from install-it-yourself linoleum sheet and tiles to trickier hardwood applications. In addition to visual appeal, consider comfort, life span, cost and maintenance when considering re-doing your floors.

Sometimes, something as simple as adding a throw rug under a table or beneath chairs will add the warmth and colour you’re looking for. Just ensure they are easy to clean and don’t require a lot of upkeep.

Use light to brighten, set mood
Lighting creates atmosphere and mood in a room. Adding or changing existing ceiling fixtures, wall washers and pot lights can change the function of almost any room. For maximum flexibility, nothing works better than a floor or table lamp.

There are a huge number of options available when it comes to choosing the right lighting for any room. Is your kitchen really drab, or just too dark? Maybe all it needs is new track lighting that puts the spotlight where you want it. Under-cabinet task lighting makes work easier and safer and brightens those dark counter areas.

Whether used to highlight decor, set a mood, light work areas, or provide safety and security, new lighting is an easy and inexpensive way to make your home come alive.

Re-upholster your furnishings
Sometimes it takes more than a paint job and new floors or carpets to spruce up a room, especially if the fabric on your furniture looks tired and worn. If you are happy with the design of your furniture but crave new fabric colours and textures, re-upholstering can be less expensive than buying, for example, a whole new living or dining room set. Re-upholstering takes skill. Before attempting to re-upholster a furniture piece yourself, consider hiring a person who specializes in this craft.

While re-upholstering allows you to extend the life of an existing furniture piece, it isn’t cheap. So, first determine exactly which furniture pieces you want to keep. You may just want to re-upholster a favourite chair or you may want to change the colouring of all the furniture in your living room. Be sure to carefully match the colour, texture and design of the new fabrics with your carpet or wall colours.

Change your window treatment
When you are considering changing window coverings, there is no shortage of selection. Blinds, shutters, sheers, shades, valances and just plain naked windows are only a few of your options.

The window treatment is often the most eye-catching aspect of a room. That’s because windows serve as a visual link with the outside world. They are also the primary source of natural light in your home. Begin by deciding how important privacy is to you and whether you want your windows to admit air and light into the home.

If your windows reveal a pleasant view and privacy is not an issue, you may want to use minimal coverings that can be easily pulled back. Also, consider location. If your windows face north, you should aim to let in as much light as possible. If they face south or west, you may want to cut back on the amount of light.

REALTOR® is a registered trademark of REALTOR Canada Inc., a company owned equally by The Canadian Real Estate Association and the National Association of REALTORS® and refers to registered real estate practitioners who are members of The Canadian Real Estate Association. Used under license.

August 2013 Sales and Average Price Up Over 2012

ugust 2013 Sales and Average Price Up Over 2012

September 5, 2013 — Greater Toronto Area REALTORS® reported 7,569 residential transactions through the TorontoMLS system in August 2013. This represented a 21 per cent increase compared to 6,249 sales in August 2012.

“Sales were up strongly this past August for all major home types compared to last year. Many households have accounted for the added costs brought on by stricter mortgage lending guidelines and have reactivated their search for a home. These households have found that a diversity of affordable ownership options exist throughout the GTA,” said Toronto Real Estate Board President Dianne Usher.

The average selling price for August 2013 was $503,094 – up by almost 5.5 per cent compared to the average of $477,170 in August 2012. The MLS® Home Price Index (HPI) composite benchmark was up by 3.7 per cent over the same period.

“Despite an increase in borrowing costs during the spring and summer, an average priced home in the GTA has remained affordable for a household earning an average income. With this in mind, tight market conditions are expected to promote continued price growth through the remainder of 2013,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Average Price up in March and First Quarter

April 3, 2013 — Greater Toronto Area REALTORS® reported 7,765 transactions through the TorontoMLS system in March 2013 – down 17 per cent compared to 9,385 transactions in March 2012. While the year-over-year dip in March sales followed the trend that has unfolded since mid-way through 2012, it is also important to note that the Good Friday holiday was in March this year versus April in 2012. Generally speaking, there are fewer sales reported on statutory holidays and weekends.

Condo Market Well Supplied in the Fourth Quarter

Condo Market Well Supplied in the Fourth Quarter

January 11, 2013 — Greater Toronto REALTORS® reported 3,830 condominium apartment sales through the TorontoMLS system during the fourth quarter of 2012. This number represented a decline of 23 per cent compared to 5,005 sales during the same time period in 2011.

The average selling price for condominium apartments in the fourth quarter was $332,410 – down by one per cent compared to the fourth quarter of 2011.  Read more...