A Glossary Of Terms Used By Realtors And Mortgage Brokers
Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of the daily operations of a specific industry, and the mortgage and real estate business is no exception.
To help you understand the terms, acronyms, and phrases regularly used when purchasing property, Nola Stairs has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your real estate and financial needs effectively.
Contract of Purchase and Sale
This is fairly self-explanatory. It is the contract that is negotiated between the buyer and the seller to determine price dates and included items.
The deposit on the contract of purchase and sale is a deposit of good faith and forms part of the down payment on the home. If any of the subjects cannot be fulfilled, the buyer receives the deposit back.
Subjects on the Contract of Purchase and Sale
The subjects are put on the contract to protect the buyer to make sure that the financing is alright. Even if there is a pre-approval, that subject needs to be on the contract. A home inspection, all though it is not required by the bank, may protect the buyer from any hidden defaults the home may have.
Completion, adjustments, and possession dates
Completion refers to the date that money changes hands. Adjustments refer to the date on which the buyer becomes responsible for property taxes and utilities. Possession, of course, is the day they are able to move in.
A realtor can only work for one party and must disclose that to them immediately upon meeting with them. The realtor cannot work for both parties as they have in the past when they could sell their own listings. That is now considered a conflict of interest.
This is the amount of money that buyers are required to have available when they sign their documents at the lawyers or notary public office. They are required to have 1.5% of the purchase price for closing. This amount may be more if they have to pay a property transfer tax.
Property Transfer Tax
If one is a first-time buyer, they are exempted from paying this tax. When buying all future homes, they must pay 1% on the first $200,000.00 and 2% on balance to $2,000,000.00. This is a tax that goes to the British Columbia Government.
When looking at the title to the property, one is looking for liens and judgments on the property that may adversely affect its sale of the property. They are also looking for the right ways, building schemes, and restrictive covenants.
Property Condition Disclosure Statement
The seller of the property, in most cases, will complete a disclosure statement that will form part of the contract. This disclosure must be filled out to the best of their knowledge and disclose any issues or problems they have had with the home. Recent repairs made to correct those issues must also be disclosed. If it is a rental property often, there is a line drawn through the disclosure statement that the seller has not lived there. The buyer is then purchasing as is where it is.
A realtor will ask their buyer to go to their lender and be pre-approved to purchase a home. Usually, this is done before looking at homes so the client knows if they are qualified and how much they can afford.
If you’re looking for a licensed mortgage broker and realtor in Prince George, BC, reach out to Nola Stairs. I am a licensed realtor and mortgage broker. My education and comprehensive understanding of both mortgages and real estate allow me to efficiently guide you to your homeownership goals and appropriately finance them. With my vast lending network of major banks, trust companies, and private lenders, I can offer better rates and terms for your mortgage. Similarly, through my real estate connections, I can help you sell and buy a new home very quickly.