Be an expert in real estate terminology.

You’re house hunting and spending a good deal of time on the internet going through MLS^® listings. It’s exciting to study the photographs, watch videos, and read the descriptions of various properties. You organize your weekend to view as many of these homes as possible.

And then – disappointment.

“But the kitchen looked so big in the photograph”. It likely did. It’s not an attempt at deception, but rather the use of specialized camera lenses designed to capture the entire room. If the refrigerator looks like it’s four feet wide in the photo, it might be a good idea to carefully check the provided room dimensions.

The specifications of a home and its many features can often be baffling. Here’s a few to watch out for when considering a property.

• “handy-man special”
• “fixer-upper”
• “just needs a little TLC”
• “original owner”

Unless you are an HGTV-worthy flipper/renovator, or you have substantial funds at your disposal, it may not be the right place for you.

The number of bedrooms and bathrooms can be perplexing. Most real estate sites only list the totals. A little more research is required to get an accurate picture of the home.

REALTOR^® descriptions may indicate bedrooms as 3+2 or as 5(3+2). By law in Ontario, when a property is presented for sale, only those bedrooms above grade (ground level) are entitled to be classed as a bedroom. Obviously additional bedrooms may be found in a lower level of a back or side split, or in the basement of a bungalow or two story. Caution is required. Below grade, a bedroom must have legal egress [an exit through a window or door big enough for a person to fit through] and a closet, in order for it to be considered a LEGAL bedroom. If you’re hoping to rent out a finished basement to help with mortgage payments, be absolutely sure the space is properly permitted to avoid problems and additional later expenses.

The number of bathrooms can also be puzzling. What does 2.1 or 3.5 actually mean? The first number always indicates the number of full bathrooms. The .1 or .5 refer to a two-piece powder room – a half bath. A full bathroom must have a minimum of three fixtures: shower or bath, a sink and toilet. Bathrooms and ensuites are described as a three, four or five-piece. A four-piece may indicate that the bathtub serves as a bath and shower, but is also commonly used when there is both a bathtub and separate shower. Keep an eye out for that word “separate”. A double sink still only counts as one piece, unless there happens to be two completely independent sinks/vanities in the room.

The MLS^® System allows for only so many characters in the description of a property. Sometimes, the space is just not enough to outline the many features of a home. This problem is solved with the use of short forms. Many are obvious, given the context, but others may be somewhat of a mystery. “Lux Fm Rm w/ WB Frpl & w/o to Prof Lndscped Bkyd w/I/G Pool” – actually reads as – “Luxurious family room with wood burning fireplace and walk out to professionally landscaped backyard with in-ground pool”. You get the idea.

What exactly is a “Buyer’s Representative”?  … A REALTOR^® working exclusively in your best interest.

Buyers frequently operate under the belief that the REALTOR^® will take a lower commission if they act for both parties. In reality, commission is determined at the time of signing the listing agreement, but yes, on occasion a reduction may be possible if the listing agent represents both parties. In this situation, the agent becomes a neutral third party and is essentially, merely passing paperwork back and forth between those involved in the transaction. Making an offer based solely on the knowledge the seller is paying less in commission – did the buyer manage to negotiate the best price? Without their own representation, did they end up paying too much to save a little? It becomes even more complicated in a multiple offer scenario.

Searching for that first home can be overwhelming. A Buyer’s Representative will provide up-to-date listings matching your budget and wish list and filter everything else out, so your valuable time is spent looking at only relevant and available properties. How many times have you sourced a perfect house only to discover it was sold yesterday?

REALTORS^® are qualified professionals who will guide you past common first time home buyer mistakes. They are knowledgeable about the community they serve, have access to a wide range of service providers and possess valuable negotiating expertise. As a buyer, these services and much more are generally at no cost to you, so why not have a Buyer’s Representative working exclusively in your best interest?

A useful glossary of real estate terminology.

This alphabetical glossary explains some of the more common terms, phrases and acronyms used in real estate – in plain language.

Adjustments: The division of costs between buyer and seller, handled by the respective lawyers on closing.

Agency/Agent:  A legal relationship in which the agent is employed and authorized to represent you in a business transaction with a third party. In real estate, the agent is the brokerage, and all contracts are in reality with the brokerage and not the individual salesperson. Agency relationship is typically established by the signing of a representation agreement.

Agreement of Purchase and Sale:  A standard form constituting a legal contract when signed by a willing seller and willing buyer.

Assessed Value:  A market value placed on a property for the purpose of determining municipal taxation. The Municipal Property Assessment Corporation (MPAC) is responsible for assessing every property in the province.

Bridge Loan:  Interim financing obtained when a buyer has to close on a transaction prior to the completion and receipt of funds from another trade in real estate.

Brokerage:  A corporation, partnership, or sole proprietorship trading in real estate on behalf of others.  A Broker of Record is designated by a brokerage to ensure strict compliance with the Real Estate Business Brokers Act, 2002 (REBBA). Also See Trust in Real Estate Services Act, 2020 (TRESA).

Buyer Representation:  The brokerage represents and owes fiduciary duties (of good faith and trust) to the buyer as a client.

Buyer Representation Agreement:  An agreement outlining the details and relationship between a brokerage acting as an agent for a buyer.

Chattel:  Personal property that is moveable.

Client:  A person represented by a brokerage by way of a representation agreement. A client is owed extensive obligations and the highest possible service.

Closing Costs:  Expenses associated with the completion of a sale in real estate.

CMHC:  Canada Mortgage & Housing Corporation. A federal agency mandated to carry out housing related activities, which includes the residential mortgage market.

Co-Operating Brokerage:  A brokerage, typically representing the buyer, who is co-operating with the listing brokerage in a real estate transaction.

CREA:  Canadian Real Estate Association.

Customer:  A person entering into a customer service agreement with a brokerage. The brokerage does not represent a customer in the same manner as a client.

Date of Completion (Closing):  The date specified in the Agreement of Purchase and Sale when the buyer will pay the remaining balance of the purchase price and the seller will provide the deed to the property along with vacant possession.

FINTRAC:  The Financial Transactions and Reports Analysis Centre of Canada. The agency, in an effort to curb suspected money laundering and terrorist activities financing, requires all brokerages to verify identity by way of a standard form for every person involved in a real estate transaction.

Fixture:  A permanent improvement to a property that can’t be removed from the property without mutual agreement.

Irrevocable:  Not able to be recalled or revoked, by either buyer or seller, for a specified time frame.

Land Transfer Tax:  A sliding scale provincial tax paid by the buyer of a property on closing. Toronto residents pay an additional municipal land transfer tax on top of the provincial tax.

Latent Defect:  A defect not easily noticed by an untrained eye during the inspection of a property.

Listing Agreement:  [See Seller Representation Agreement]

Matrimonial Home:  A home designated as the family home, receiving special status under the Family Law Act.

MLS®:  Multiple Listing Service® is a trademark of The Canadian Real Estate Association. It is a formal arrangement among real estate boards, their members, and brokerages to share listing information with one another.

Mortgage:  Financing available to make a purchase in real estate. The debt is secured by the property serving as collateral.

Mortgagee:  Lender.

Mortgagor:  Borrower.

Multiple Representation:  Two or more clients are represented by the same brokerage in a real estate transaction. This requires written consent by all affected parties.

OREA:  Ontario Real Estate Association

Patent Defect:  A readily observable defect.

Real Estate:  In the most general terms it refers to land, and any improvements on the land: improvements being buildings and structures.

Real Estate Trust Account:  Real estate brokerages, to protect consumers, are required to have a dedicated account for all deposit monies held in trust (as per REBBA, 2002), that is separate from operational accounts. Also see Trust in Real Estate Services Act, 2020 (TRESA). 

REBBA, 2002:  Real Estate and Business Brokers Act, 2002. The statute that governs real estate brokerages, brokers and sales representatives.

RECO:  Real Estate Council of Ontario. The regulatory organization and administrative authority for registration, consumer practice and compliance requirements related to salespersons, brokers and brokerages registered under REBBA, 2002. Also see Trust in Real Estate Services Act, 2020 (TRESA). 

REALTOR®:  Is a registered trademark. Only active members of a real estate board affiliated with The Canadian Real Estate Association (CREA) can use the identification.

Seller Representation:  The brokerage represents the seller as a client.

Seller Representation Agreement:  An agreement outlining the relationship between a brokerage and a seller; more commonly known as the listing agreement.

Service Agreement:  The brokerage provides services to a customer, as distinct from a representation agreement with a client.

Single Representation:  The brokerage represents either the seller or the buyer as a client in a trade in real estate.

Title:  Evidence the owner of land has lawful ownership.

Title Insurance:  Insurance for owners and lenders covering risks affecting title.

TRESA, 2020:  The Trust in Real Estate Services Act, 2020 has recently received Royal Assent. Once proclaimed this act will update REBBA, 2002. The changes in this modernized legislation, once in force, will strengthen consumer protection in the real estate industry.

This is by no means an exhaustive list of REALTOR®-speak that you may encounter in a real estate transaction.

A REALTOR® has a responsibility to fully and completely explain every word, every paragraph, every clause, and every possible scenario you’re likely to face when negotiating the purchase or sale of a home. There is no “typical” real estate transaction. Surprises are more the norm than not .. and every sale is unique.