Top 10 Real Estate Terms Sellers and Buyers Should Know

Real estate terminology can be confusing—but it doesn’t have to be. If you’re selling or buying a home soon, here are the top ten terms you should know to feel confident during the process.

1. MLS or Realtor.ca

MLS stands for multiple listing services. In Canada it's called Realtor.ca and all real estate agents who are registered can list their properties on the one database. Our handy tool for searching the MLS can be found on our website. Some basic information required include the number of bedrooms and bathrooms, the square footage, the price, and the name of the listing agent—but there’s a lot more!

2. Lockbox

Realtors routinely use lock boxes to securely store the keys to a house on the premises. This arrangement allows agents to show the house without first going to the listing agent’s office or some other location to pick up the keys. It also eliminates the need for someone to bring the keys to the property. Lockboxes are often secured to railings, door knobs and other places. Want to see a realtor panic? It happens when we arrive at a showing and have trouble finding the lockbox!

3. Waivers

Waivers are voluntary action that removes a party’s right or ability in an agreement, while essentially removing a real or potential liability of another party in the agreement. The waiver is a separate document from a contract, but is related to conditions included in a contract. This document waive's all of your conditions. This makes it a firm sale and a legally binding contract. 

4. Conditions

Conditions are a clause in a real estate contract that allows one or both parties to back out of the deal if certain conditions are not met. A common condition would be a home inspection that would allows the buyer to back out of the deal if the home inspection reveals major problems.

Conditions can be a valuable tool for both buyers and sellers, but they can also slow down your real estate transaction. By their nature, conditions make it easier for either party to leave the deal—which can leave you back at square one. But that doesn’t mean you should turn down all offers that include a condition. Instead, talk to your real estate agent about the offer, and they can offer expert advice based on your market and your specific situation.

5. Terms

Terms are things that need to be satisfied after conditions are waived, but before you close on the property. Terms could include things you want the current homeowner to fix before you move in, such as replacing a baseboard or fixing a light. 

6. Home inspection

A home inspection is carried out by an objective third party to establish the condition of a property during a real estate transaction. An inspector will report on such things as a home’s heating system, the stability of the foundation, and the condition of the roof. The inspection is meant to identify major issues that might affect the value of the home and the stability of your and your lender’s investment and return. 

7. Conditional Sale

When a home is conditionally sold, it basically means that a buyer and seller have come to an agreement on the sale of the property. However, there are conditions that have to be met as part of the agreement for the deal to be firm or finalized.

8. Lender

A real estate lender is an individual or institution that finances a real estate transaction, usually by issuing a loan to a buyer.

9. Deposit cheque

A portion of your down payment you give over the condition period so that they will trust you enough to hold the home for you. It gets held in trust at the listing real estate brokerage. If you don't waive your conditions and you decide to collapse the deal, then you get your deposit back. If you do waive your conditions and then change your mind, you are in a legally binding contract and can lose that deposit (as well as get sued for legal fees and damages). 

10. Closing

Closing is when the home sale has been finalized. When does this happen? A sale is considered closed when the conditions have been met, all the paperwork has been signed, and all the money has exchanged hands. When these steps are completed, the seller will hand over the keys, and the buyer will be the new homeowner.