Must-Know Real Estate Terms
Every Word You need To Know To Sell Your Langley Home, Townhome, or Condo!
Unless you’ve sat through hours of boring Real Estate classes and read the driest textbooks of all time, you probably won’t know these key realtor words.
Here are some that will come up quite often and are worth a read. Always feel free to ask us if you are unclear.
In Canadian Real Estate contract negotiation, “subject to” clauses are a home buyer’s safety-hatch. A way to escape the contract if something goes wrong. Three of the most common clauses are: subject to financing, subject to inspection, and subject to sale.
The date that the buyer has the right to take possession of the property. The contract should specify what time of day (usually noon) you can access the property.
The date agreed on by both parties to a real property transaction for the adjustment of property taxes, rent, interest, and other items.
The date on which the purchaser’s solicitor undertakes to the vendor (or his solicitor) that he will pay the balance owing to the vendor upon the transfer of title being accepted for registration.
An amount deposited with the brokerage by the purchaser when an offer to purchase is made, usually payable after all subjects have been removed. Generally most sellers ask for 10% of the purchase price. The deposit is then held at the seller’s brokerage and applied to the purchase price of the home on completion.
Property Disclosure Statement (PDS)
The three page PDS is a form filled out by the seller disclosing what they know about their property. The PDS itemizes potential problems such as asbestos insulation, unauthorized rental suites, renovations done without a permit, and unregistered easements or encroachments. This document has a series of questions that gives an opportunity for the sellers to disclose any latent defects (a fault in the property that could not have been discovered by a reasonably thorough inspection before the sale).
When lawyers and Real Estate professionals talk about “Title”, they are referring to who has legal ownership and the right to use a piece of property. An easy example is to relate this to the board game Monopoly. By purchasing Boardwalk, you are now the owner of the title. The title will also list any easements, rights of way, covenants, building schemes, etc. that may affect the property.
Property Transfer Tax
The amount of tax you pay is based on the fair market value of the land and improvements (e.g. buildings) on the date of registration unless you purchase a pre-sold strata unit. The tax is charged at a rate of:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000, and
- 3% on the portion of the fair market value greater than $2,000,000
For example, if the fair market value of a property is $450,000, the tax paid is $7,000.
If you’re a foreign national or foreign corporation and the residential property is located in the Greater Vancouver Regional District, you also pay a 15% additional property transfer tax on the fair market value of your proportionate share.
After a contract is executed and the terms are accepted by both parties, it is a complete and binding document. If it becomes necessary to change an aspect of the previously agreed to terms, an Amendment is prepared. It is a document that makes a change to the ratified contact. An example may be as simple as bumping up the possession date to be more accommodating to your move.
Sometimes, when you buy or sell a home, you need protections that aren’t covered in simple purchase contracts. An Addendum provides that protection. An Addendum to a sale contract is anything extra that the buyer or seller includes beyond the common language in a basic agreement. An example might be that the buyer may ask for a personal item such as TV mounts or a wall unit.
Form B (for Strata Properties)
A Form B is an Information Certificate attaching the strata corporation’s rules, current budget, and the developer’s Rental Disclosure. We will order this from your Property Management company and provide it for the buyer to refer to.
Minutes (for Strata Properties)
The instant notes or records of a meeting. Whenever your strata has a meeting they take minutes (keep record) of the meeting. When selling your home a buyer will request to see up to two years of these minutes in order to be brought up to speed on all conversations and discussions on the building.
Contingency Reserve Fund (for Strata Properties)
This is considered an emergency fund or savings plan for strata properties. Each month every unit pays their strata fees that will cover the expenses of the building along with adding to the reserve fund. A healthy reserve fund is great in case of a building emergency cost such as a pipe burst, or a future plan on a large expense such as a new roof or some form of special levy.