ADJUSTMENT DATE The date agreed by both parties for the allocation and adjustment of property taxes, interest, utilities, rents and other appropriate items. This date is usually the same as the possession date. (See Vendor's and Purchaser's statements). AGREEMENT A contract between Vendor and a real estate company whereby the real estate agent agrees to find a ready, willing and able buyer for a listed property on certain terms stipulated by the Vendor. The Vendor agrees to pay a stated amount of commission if the salesperson is successful. AGREEMENT FOR SALE The vendor agrees to sell the property to a purchaser on credit terms. Normally the vendor carries the financing himself and the purchaser arranges a payment with the vendor. The vendor remains on the title as registered owner. Very similar to a first mortgage. The agreement for sale is the registered contract. AMORTIZATION A term applied to a predetermined schedule for installment mortgage payments where these is a gradual debt reduction. Combines interest and principal in a fixed monthly payment. The most common amortization period is 25 years for a residential mortgage. APPRAISED VALUE A report made by a qualified person giving an estimate of value, based on experience, comparable sales and pertinent data relating to the property. BUY DOWN When the interest rate on a mortgage is higher than current rates, sometimes the rate can be reduced by payment to the lender of a lump sum that represents the interest differential from the present to the end of the mortgage term. CAVEAT A note placed on the register in the Land Titles Office at the instigation of a person who claims a certain interest in the land. In B.C., a caveat remains in force for only 2 months, then lapses. CHATTELS Personal property not attached or affixed to the land or property. Also refers to appliances, etc. in a rental property. COMMISSIONS In B.C. it is illegal to receive "net" commissions (i.e. any amount of monies given on the sale of the property over and above the agreed price.) COMPLETION DATE The date on which the vendor is entitled to the net proceeds of the sale and the purchaser is entitled to the transfer of the title. Real Estate commissions and legal fees are paid out at this time. CONSIDERATION Something done or promised (i.e.deposit money) to be done one party in return for something done or promised to be done by the other party (i.e.the transfer of title to the property). CO-OP SUITE A co-op is a company formed to create and operate defined living spaces within a building. A purchaser purchases shares in the company that normally owns the building. The purchase of these shares usually entitles the owner to the sole use of a suite in a co-op building through a long term lease or shareholder's agreement. COUNTER OFFER A response from the Vendor to an offer from the Purchaser. Legally this is an offer to sell. C.T.A.M. Cash to a new mortgage to be arranged. DEPOSIT Monies taken at the time of acceptance as a sign of good faith. These monies are held in a real estate company's trust account pending the completion of the purchase and are credited towards the purchase price. ENCUMBRANCES Anything that affects or limits the title to property such as a mortgage, lease, easement, etc. EQUITY The difference between the price for which a property could be sold and the total debts and mortgages registered against it. FIXTURES All things attached to the property or growing on it. To avoid this dispute, specify in writing any items that will not be included in the dale of the property, or better yet, remove them prior to offering the property for sale. F.S.R. Floor Space Ratio. A City zoning term that defines the maximum allowable square footage to be built or occupied in a building in relation to its lot size. GROSS DEBT SERVICE RATIO The percentage of gross annual income needed to cover payments associated with housing payments. (Mortgage, principal and interest, taxes, secondary financing.) Primarily used by the mortgagee (lender). Most lenders prefer the G.D.S. be no more than 30% of a purchaser's gross annual income (before deductions). GROSS TAXES The total amount of taxes owing as per your B.C. Assessment and municipal property tax bill before any deductions are made. HIGHLIGHT SHEET A piece of paper given to the public and other sales agents that outlines details of the property for sale. HIGH RATIO LEASE A lease is a rental for a fixed period of time. Leases over 3 years duration should be registered in the Land Titles Office. LISTING MARKET VALUE The highest price paid for a piece of property which has been exposed 'for sale' in the open market allowing a reasonable time to find a purchaser. MLS LISTING Multiple Listing Service. A listing service handled by the Real Estate Board that issues a weekly catalogue listing all details of properties for sale on MLS to all the Lower Mainland agents. The commission rate is typically 7% on the first $100,000 and 2.5% on the balance of sale price. Buyers' agents introducing a buyer to the property to facilitate co-operation and sale typically receive 50% of this shared commission. This becomes their remuneration in recompense for the co-operation under the provision of MLS Listings. MORTGAGE A specific form of security for a debt, more specifically, property or chattels as security for payment of a debt. The borrower is the mortgagor and the lender is the mortgagee. MORTGAGE - High Ratio A situation where the loan exceeds 75% of the appraised value. This loan must be insured by C.M.H.C., or M.I.C.C. or other insuring agencies for a fee. MORTGAGE - Vendor Take-Back A situation where a Vendor will agree to hold the mortgage in the case of a Purchaser who may not qualify for a conventional mortgage, or as a way to attract buyers by offering a lower interest rate. The Vendor must be secured in his loan. NET TAXES The amount owing after allowable deductions made such as homeowners' grant, and senior citizen's deductions. OFFER Offer to Purchase. A promise made by one party, the offeror, to another party, the offeree. A legal agreement which offers a certain price for a specified piece of real estate. OPEN HOUSES / AGENTS' OPENS An agent's open is an open arranged by the listing agent to allow all other agents in the area to view the property for their prospective purchasers. Open houses are a two hour time period usually between 1 and 5 p.m. on weekends when the listing agent will be present and potential purchasers will be encouraged to drop in . (Vendors are advised to be absent during these times.) P.I.T Principal, Interest and Taxes. A method of combined mortgage payment. POSSESSION DATE The date the Purchaser is entitled to possession of the property at twelve noon that day, subject to existing tenancies. PRE-APPROVED MORTGAGE A situation where a mortgagee (lender) will appraise a property prior to putting it on the market and set the ceiling mortgage funds that it will lend to a purchaser who meets its internal qualifications. PURCHASER'S STATEMENT The statement indicates the balance of cash (after all adjustments) required to complete the transaction. SEVENTY-TWO HOUR CLAUSE A protection clause for the Vendor who accepts an offer which is subject to the sale of a property that the Purchaser owns. The Purchaser must remove his subjects within 72 hours or the Vendor has the right to deal with the new offer to purchase. STRATA PROPERTY The Condominium Act permits air space to be divided and fee simple titles created from that air space. (A) STRATA SUITES: each strata lot (i.e. suite or office) is traced out on a strata plan that is filed in the land Titles Office. Each strata owner owns a fee simple title to his suite plus a share of the common property (i.e. hallways, land). (B) STRATA DUPLEX OR TOWNHOUSE: Strata owner owns fee simple title to a unit plus has exclusive use of limited common property (balcony, sundecks, yards, etc.). (C) BARE LAND STRATA: Exists where a large parcel of property is divided into strata lots (i.e. homesites) and recreation facilities etc., are provided in the development as common property. UNIT ENTITLEMENT OF STRATA LOT Indicates the share of an owner in the common property and is used to calculate strata owner's contribution to common expenses. STRATA CORPORATION Strata owners collectively become the strata corporation and elect a strata council to run the daily operations of the project. STRATA BY-LAWS Strata corporation have by-laws providing control, management, administration, use and enjoyment of the strata lots, common property, facilities and assets. These by-laws, may among other things, restrict the right of an owner to rent out his strata lot or restrict the keeping of pets. SUBJECT OFFER A legal agreement where there are certain conditions that must be met, before the agreement becomes firm and binding on both parties. TERM Mortgage time period (usually 1-5 years). Upon expiration of this time period the mortgage becomes due and payable (without penalty) or the mortgage rate is renegotiated for a further agreed upon term. TITLE REGISTRATION The legal title to an interest in land (by an innocent purchaser) is not disputable once it is registered in the Land Titles Office. Indefeasible or absolute security is given to registered titles in fee simple in British Columbia. This is not so in Ontario, for instance, where lawyers must take the trouble and expense of investigating the history of the title back to the original grant from the Crown to check for fraud, etc. or in Washington State, where a Purchaser must purchase an insurance policy form a private title insurance company to protect his title to property. TRUST ACCOUNTS (ESCROW) An account set up by the real estate firm or Vendor's solicitor who acts as stakeholder on behalf of the Vendor, to hold deposit funds. The money can be arranged to bear interest for the purchaser in certain circumstances. VENDOR'S STATEMENT OF ADJUSTMENTS The statement indicates the balance of cash to be forwarded to the Vendor after all adjustments. |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| |
 |
| "Communication is the lifeline of every endeavour" |
| Glossary |
Earl and Danielle Huff
| Amex Broadway West Realty |
| #201 - 1055 West Broadway - Vancouver, B.C. V6H 1E2 EMAIL: ehuff@telus.net - Danielle_Huff@telus.net FAX: 604-736-8210 |
MOBILE: 778-888-4050
