Click on the correspondent letter to view the definitions:

A . B . C . D . E . F . G . H . I . J . K . L . M . N . O . P . Q . R . S . T . U . V . W .  Y . Z

Ps: Even though we called it the Real Estate Glossary, it also contains a lot of Financial & Mortgage Terms.
Just so you know.

Feel free to use it as a reference, when you need it.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

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1. Real Estate Glossary: L
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Vendor Take Back
In order to sell a property, the seller will provide all or some of the financing to ensure the transaction.

Verification of Employment
Confirmation from a place of employment that verifies a loan applicant is being truthful about where he or she works and about the salary he or she earns.

Void
Something that is void has no validity or effect under the law meaning it is null. For example, a contract can be rendered void.

Voidable
When an individual or party involved in a contract is entitled to renege or retract the contract at his or her discretion.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

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Underwriting
To support or agree to (a decision, for example). In real estate, underwriting refers to the analysis of the risk involved for a lender to grant a mortgage loan and whether or not the risk is acceptable. Underwriting involves a property evaluation as outlined in the appraisal report, and an evaluation of the borrower’s ability and willingness to repay the loan.

Unearned Income
This type of income can include funds that are gained from interest, dividends, investments, or capital gains as opposed to income that is earned by working for a salary, hourly wage, or gratuity.

Unsecured Debt
Debt that is not guaranteed by collateral is considered unsecure because there is no assurance for repayment. Most credit cards are unsecured debt, which is why the interest rates are higher than other forms of lending, such as mortgages, which use property as collateral.

Unsecured Loan
A type of loan that is given to a borrower without collateral such as property that is acceptable as security for the loan.

Up-front Costs
Certain costs must be paid when signing a vehicle lease agreement before the dealership will release the vehicle to the buyer. These costs might include the first payment, a refundable security deposit, a down payment, taxes, registration, and other fees.

Upgrades
When buying a newly built property such as a house or condominium, the builder gives the buyer the option to select higher-quality floor coverings, cabinets, windows, fixtures, etc. at an additional cost to the buyer. If the buyer decides not to purchase upgrades, he or she can simply select the standard options offered by the builder.

Up-zoning
The practice of changing the zoning in an area typically from residential to increased commercial use. This is a controversial practice because upzoning allows for greater density and conjestion in the area which affects the current occupants. The term can also apply when changing the zoning to limit growth and density.

Useful Life
The number of years in which business property that will depreciate in value is expected to be productive and in use for the business.

Usurious Rate
An interest rate that is unnecessarily high or well above legal rates. For example, sometimes intangible property taxes are applied to income from usurious rates.

Usury
The act or practice of lending money and charging the borrower interest at an exorbitant or illegally excessive rate.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Related Articles:

1. Real Estate Glossary: G
2. Real Estate Glossary: N
3. Real Estate Glossary: T

Tax Deduction
An allowable (by government) expense that can be subtracted from income before calculating income tax.

Tax Deferral
A method used to postpone current year taxes to a later year. This is typically done by recognizing income or a gain at a later time. It is important to remember that using tax deferral only delays tax liability, it does not eliminate it.

Tax Exempt
Income that is not subject to taxation. It is important to note that income exempt from federal taxation is not necessarily exempt from provincial taxation.

Tax Lien
A claim or obstacle that prevents the sale of a property due to unpaid taxes. The property title cannot be transferred until all liens are cleared.

Tax Sale
Property that is sold by the government to recover unpaid taxes.

Tax-sheltered
A savings or investment plan that offers significant tax savings.

Taxable Income
Income that is subject to taxation after accounting for adjustments, exemptions, and deductions.

Tear-down Condition
A property that is purchased for the sole purpose of tearing it down to build a newer house. These types of properties are generally located in desirable locations with spectacular views or amenities.

Teaser Rate
The the below-market interest rate that is offered by lenders or credit card companies to gain new business. Offering a below-market interest rate often encourages people to switch credit cards or lenders to save money. Also known as an introductory rate.

Tenancy by the Entirety
The ownership of a property by spouses where each spouse owns an undivided interest in the entire property. When one spouse passes away, the other holds title to the entire property.

Tenancy In Common
Ownership of a property by two or more persons. If one tenant passes away, his or interest does not pass to the survivor. It is treated as an asset of the deceased’s estate.

Tenants in Common
The ownership of a property by two or more individuals where each owns an undivided interest in the entire property and each has equal rights to use the property. If one tenant in common passes away, his or her interest may be sold, mortgaged, or given to an individual named in the will.

Tenure
The means, process, duration, or right of holding something such as the title of real property and conditions by which the property is held.

Term
1. A limited or set period of time.
2. When dealing with a mortgage, term refers to the length of time in which a borrower agrees to pay back the lender. The interest rate and payment schedule is also predetermined. The interest rate typically stays constant during the term unless otherwise specified in the loan agreement. For example, a five year fixed rate mortgage has a term of five years.

Term Deposit
An investment product where a fixed sum of money is deposited into an account for a set period of time with interest paid over the term.

Term Loan
A loan intended for medium or long term financing that provides cash to purchase fixed assets such as machinery, land or buildings, or to renovate business premises.

Timeshare
A form of property ownership where multiple owners take turns using the property at designated times throughout the year. Timeshares are typically vacation homes located in resort destinations.

Title
Evidence or written proof that shows a person’s right to possession or ownership of a property.

Title Defect
A legal claim made by an external party against the property or the right of another party to make demands upon the property owner.

Title Insurance
A policy that protects the lender against loss which can result from inconsistencies in a property title such as liens or claims against the property. This policy also protects the homeowner if he or she purchases an owner’s policy in addition to the title insurance.

Title Report
A report that reveals any competing claims, liens, or other problems relating to a property. A title report is required before title insurance will be issued. Also known as a “Preliminary Title Report” or “Prelim.”

Total Debt Service
The ratio of a borrower’s total monthly debt as compared to his or her monthly gross income. Lenders use this ratio to determine how much the loan applicant is allowed to borrow.

Total Expense Ratio
The percentage of monthly debt payments compared to total before-tax income.

Trade Equity
The exchange of property as part of a down payment when opting to buy another property. Other properties and vehicles are commonly used in trade equity as partial down payment.

Tax imposed by a municipality on any transfer of right of ownership on its territory.

Trans Union
One of the major Canadian credit bureau companies along with Equifax.

Trust
A trust is a fund that is set up similar to a will. The trust specifies how money or property will be disbursed, it lists the recipients or beneficiaries, and names one or more trustees to manage the assets. An irrevocable trust cannot be changed after the terms are finalized; a revocable trust has more room for how much can be transferred, but it is usually more expensive to maintain.

Trust Account
An account used by a law firm or real estate agent to control funds set aside for costs associated with a real estate transaction. This account also holds any other money put forth by the buyer and seller before the closing.

Trustee
An individual that manages assets or holds legal title to property in order to administer it for a beneficiary.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Related Articles:

1. Real Estate Glossary: G
2. Real Estate Glossary: U
3. Real Estate Glossary: K

Sale-leaseback
A type of real estate transaction where the seller transfers the title to the buyer upon purchase, but then rents the property from the new owner. This practice is not common in Canada.

Sales Contract
A legal written document that details the agreed upon conditions between a seller and a buyer regarding the sale of a specific property. Also called an “Agreement of Sale.”

Sales tax
Provincial and federal taxes applied to the purchase of a property. Residential resale properties are usually exempt from federal GST but newly constructed properties are not.

Second Mortgage
A mortgage loan that takes priority after a first mortgage on a registered land title.

Secured Debt
A debt that is secured by a lien on a debtor’s property (typically a mortgage loan) that may be taken by the creditor if the debtor defaults on his or her payments.

Secured Loan
The borrower must provide collateral in order to borrow the money.

Security
1. Something deposited or given as assurance of the fulfillment of an obligation. For example, property is often used as collateral for a loan.
2. A document which indicates ownership such as a stock certificate or bond.

Self-Employed Person
An individual who owns and operates a trade or business rather than working as an employee for company.
1. You are self-employed if you are a sole proprietor or a partner working in a business.
2. You can be an employee and self-employed at the same time if you have an independent business outside of your regular employee hours. To qualify for many business tax exclusions and deductions, the business must make a profit in three of five years. In most cases, to qualify you must take and average of the last two – three years tax assessments.

Seller Broker
An individual who earns a commission (paid by the seller of a property) in exchange for finding a buyer and assisting in the negotiation for the real estate transaction.

Seller’s Market
When the real estate market favors the seller. This type of market usually means the seller is expected to sell quickly and for market or above market value.

Semi-custom Home
A house in which the layout is predetermined by the builder. This means the buyer cannot alter the layout, but he or she can specify some of the features including the type of cabinets and floor coverings.

Settlement Statement
A document that contains the details and conditions of a settlement. It describes whom must pay, the amount to be paid, and to whom the money is to be paid.

Shared-appreciation Mortgage
A type of mortgage loan where the lender offers a below-market interest rate in exchange for profit sharing when the property is sold. This is typically only done with private funds/lenders.

Shared-equity Partnership
An agreement between multiple buyers where one buyer inhabits the property and the other buyer has an ownership stake as an investment. The partners split the capital gain after the property is sold.

Short-term Liabilities
Money that must be paid in less than a year (12 months), including wages, short-term loans, taxes, credit card balances and long-term loans.

Simple Interest
Interest that is calculated only on the principal balance, without compounding.

Simple Interest Loan
A method of allocating the monthly payment between interest and principal. The interest charged is determined by the unpaid principal balance on the loan, the interest rate, and the number of days since the last payment. The rest of the payment goes to the principal. Making early payments or additional payments reduces the loan’s principal and cuts the total interest paid over the life of the loan.

Step Down Lease
A lease that allows for decreases in a rental payment on specified dates.

Step-rate Mortgage
A fixed-rate mortgage loan where payments are lower at the beginning of the loan, typically for two years, but then increase after the specified time period.

Step Up Lease
A lease that allows for increases to rental payment at certain time periods.

Sub-prime Borrower
A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.

Sub-prime Mortgage
A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
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Subordinate Loan
A mortgage with priority that is below that of another mortgage. This includes second or third mortgages, or home-equity loans.

Sweat Equity
The value of the work, including renovations, maintenance, or repairs, put into a house by its owner. This can be used in place of a full down payment (up to and including 50% of a down payment).

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Related Articles:

1. Real Estate Glossary: U
2. Real Estate Glossary: G
3. Real Estate Glossary: L

Rate Hold
The length of time, typically between 60 and 120 days, that a lender will guarantee a loan’s interest rate once you are locked in.

Rate Lock-in
A written agreement or contract in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set time period.

Real Estate Agent
An individual who is licensed to represent a buyer or a seller of real estate in a sales transaction. Real estate agents typically work on commission.

Real Estate Attorney
An attorney or lawyer who specializes in real estate transactions. This includes dealing with property tax issues and the transfer of land and buildings.

Real Estate Broker
An individual who is licensed to represent a buyer or a seller of real estate and collects commissions for the work. Most brokers have agents working for them and they collect a portion of those commissions in exchange for providing office space, marketing, and other overhead.

Real estate brokerage
The professional activity of real estate brokers and agents. Brokerage transactions and professional acts carried out by real estate brokers and agents concerning the purchase, sale, rental or exchange of immovable properties. Profession which can only be practiced by holders of a certificate issued by the Association des courtiers et agents immobiliers du Québec.

Real Property
Permanent, non-movable property, such as land and buildings.

Realtor
A real estate broker or an associate that holds an active membership in a real estate board.

Recognized Gain or Loss
The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.

Refinance
To arrange a new loan for an increased amount whereby the old loan is paid off from the proceeds of the new loan.

Refinancing
The act of paying off one mortgage with another mortgage to take advantage of lower interest rates. Refinancing is also used to transform equity into cash for vacations, home improvements, or for consolidating debt.

Refund
1. To give back, return, or repay (typically money).
2. The excess of your withholding and estimated tax payments for the year that you paid over your tax liability. The Federal Government then issues a tax refund if you paid more taxes over the year for your tax bracket.

Registered Education Savings Plan
Education savings plans that grow tax free until a child is ready to pursue a post-secondary education, at which time the money is withdrawn to help finance the costs.

Registered Retirement Savings Plan (RRSP)
A savings plan introduced by the Federal Government to encourage Canadians to save money for retirement. The investment and the interest earned on the RRSP is sheltered meaning it will not be taxed as long as the funds remain in the plan.

Reliction
An increase in the amount of land that occurs when a body of water (such as a river or sea) permanently withdraws.

Relocation Benefits
Monetary assistance and other considerations given to employees who must relocate at their company’s request. This can include reimbursement for packing and moving, house-hunting trips, and temporary housing/storage expenses.

Relocation Company
A company or business that specializes in providing assistance to individuals who are being relocated by their employers.

Remaining Balance
The unpaid or remaining principal left on a loan.

Remaining Term
The length of time remaining for a borrower to pay off the rest of an installment loan as scheduled.

Renewal
Extending an unpaid loan with the original lender when the terms of the loan expire.

Repayment Period
With a home equity line of credit, that portion of the life of the loan that follows the draw period. During the repayment period, the borrower cannot take out any more money, but must pay down the loan.

Repayment Plan
Modifications made to the repayment terms of an existing loan after the borrower is delinquent. Often used when the borrower misses payments, but the lender does not foreclose.

Replacement Cost
The amount or cost to rebuild and refurnish with materials and items of similar value. For example, replacement costs are used for insurance purposes in the event of theft or fire when replacing lost items.

Replacement Reserve Fund
Funds that are set aside by a homeowner’s association or condominium board to replace common property, such as playground equipment.

Repossession
If a borrower stops making payments on a property, the lender has the legal right to take back the property.

Resale Value
The price or dollar amount that a property owner is able to negotiate when selling an existing home or property.

Rescission
The cancellation of a contract as agreed by all of the parties involved.

Funds that are set aside or reserved by a home owner’s association or condo board for major repairs and improvements to common areas.

Reserves
Formerly required to be maintained by the bank in accordance with Bank Act regulations, but are now phased out.

Resident Alien
A person who is living as a legal permanent resident, but is not a citizen of that country.

Residual Value
The value of the vehicle at the end of a lease agreement which is agreed upon at the time of signing.

Restructured Loan
A mortgage in which basic terms — such as interest rate, term and monthly payment — are altered or restructured to prevent foreclosure on the property. This is not a regular practice in Canada.

Resets
The periodical balancing of an account for the purpose of converting interest into principal, and charging the party liable thereon with compound interest.

Retail Banking
Banking services offered to individual customers such as savings accounts, personal loans, cheque cashing, and RRSPs.

Retained Earnings
All of the profits or losses accumulated from prior years and from the present year’s income statement, minus dividends paid to you.

Return
Any increase in value, profit, or income that is earned from an investment.

Return on Investment
The gains or profit from an investment that is typically expressed as equity divided by cash flow.

Right of First Refusal
An agreement made by a property owner which gives a specific buyer the opportunity to purchase the property before it is offered to anyone else.

Right of ownership
Recognition which gives the owner of a property the right to use, enjoy and freely and fully dispose of the property, to the extent of the limits and conditions imposed by law.

Right of withdrawal

Privilege which a natural person has to withdraw a real estate brokerage contract for the sell of his immovable within three days following receipt of the contract duplicate signed by both parties, unless there is a written waiver. After this period, if the contract is marked “irrevocable”, it cannot be cancelled under any circumstance nor can the term be changed unless the broker or agent agrees.
Note: The right of cancellation applies when the contract involves a chiefly residential building containing less than five dwellings.

Royalty Income
Payments or money received for the use and exploitation of certain kinds of property, such as artistic or literary works, patents, and mineral rights.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

Related Articles:

1. Real Estate Glossary: V
2. Real Estate Glossary: G
3. Real Estate Glossary: U

Quit Claim Deed
A general release of all claims or rights to a parcel of land.

Posted By: Deya Bautista - Real Estate Broker working as part of the McGill Immobilier team. Specializing in high end condos in downtown and Old Montreal. For buying or selling contact Deya at: 514.917.7889 http://montrealrealestateblog.com/

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