When it comes to buying or selling a home, it may seem overwhelming and maybe even a bit daunting at times — there’s so much to do, from preparing your home to be put on the market, marketing, negotiations and paperwork just to name a few! Here is a detailed glossary from RE/MAX to help you familiarize yourself with all the basics you need to know when buying or selling your home!
The price that the seller has agreed to list their property for. The asking price is different from the selling price, which is the final price that has been agreed upon by the buyer and seller.
An offer is a legal agreement to purchase a home. An offer can be conditional on a number of factors, commonly conditional on financing and a home inspection. If the conditions are not met, the buyer can cancel their offer.
When the original offer to purchase a home is rejected by the seller, the seller can counteroffer with adjustments, usually to the price or terms of the purchase, such as the closing date.
When the sale of the home hinges on predetermined conditions, such as “conditional on financing” or “conditional on a satisfactory home inspection.” If the conditions are not met, the buyer can back out of the deal.
Items that are physically attached to the home and require tools to remove. Fixtures are included as part of the purchase. Examples of fixtures include ceiling lights, cabinet hardware and appliances. If the seller plans to take any fixtures with them when they move, either remove them prior to listing the home, or be sure to specify the fixtures in the Agreement of Purchase and Sale.
Unattached items in the home that can be removed without doing any damage to the property, such as curtains, but not the curtain rods since they are physically attached to the home. Chattels are usually not included with the home purchase, unless specified in the Agreement of Purchase and Sale.
This is the final step in the home selling process. Once all offer conditions outlined in the Agreement of Purchase and Sale have been met at the end of the closing period, ownership of the property is transferred to the buyer and the keys are exchanged on the closing date outlined in the offer.
In a balanced market, there is an equal balance of buyers and sellers in the market, which means reasonable offers are often accepted by sellers, and homes sell within a reasonable amount of time and prices remain stable.
In a buyer’s market, there are more homes on the market than there are buyers, giving the limited number of buyers more choice and greater negotiating power. Homes may stay on the market longer, and prices can be stable or dropping.
In a seller’s market, there are more buyers than there are homes for sale. With fewer homes on the market and more buyers, homes sell quickly in a seller’s market. Prices of homes are likely to increase, and there are more likely to be multiple offers on a home. Multiple offers give the seller negotiating power, and conditional offers may be rejected.
The Multiple Listing Service, commonly referred to as MLS, is a real estate selling system operated jointly by real estate Boards and Associations across Canada.
Dual agency is when one real estate agent (or real estate brokerage) represents both the homebuyer and the seller in a real estate transaction. There are limitations and requirements around dual agency, which differ by province.
A short-term loan designed to “bridge” the gap for homebuyers who have purchased their new home before selling their existing home. This type of financing is common in a seller’s market, allowing homebuyers to purchase without having to sell first.
Transferring your mortgage (and the existing interest rate and terms) from one property to another.
Current Market Assessment
A CMA (Current Market Assessment) is provided by your real estate agent during the listing process and is complimentary. This report assists with determining the asking price of the home, using current housing market information such as supply and demand, seasonality, home information like location, age, square footage and more.
Home Value Estimator
A home value estimator is a tool, typically found online, that helps home sellers estimate the value of their property. The result is an estimate and different from a detailed property assessment provided by a Realtor.
A warranty that protects the homeowners against future problems with the home for a determined period of time. A home seller may choose to get a home warranty when listing their property, to increase its appeal to homebuyers.
Acronym for “For Sale By Owner,” meaning the seller hasn’t retained the services of a real estate agent or broker to assist with the sale of their home. By virtue of the FSBO, the seller will avoid paying the real estate agent’s commission fee, which is split between the listing and buying agent.
The difference between the listing price of a home and the final selling price, expressed as a percentage. If the list-to-sale-price ratio is more than 100%, the home sold over asking. If it is below 100%, the home sold under asking.
Preparing a home for sale to appeal to a wide range of homebuyers. The staging process often includes decluttering, depersonalizing, deep-cleaning, and minor updates such as painting and rearranging furniture.
The appeal of a home when viewed from the curb. Curb appeal includes the home’s exterior, front yard, and anything else that’s visible from the street.
The home-buying process completed by means of technology in place of face-to-face contact. Some common technology tools include 360 home tours and video showings, video conference calls, e-documents, e-signatures and e-transfers.
Source: remax.ca, “Real Estate Terms: RE/MAX Home Seller’s Glossary” Retrieved: September 17, 2020.