15 real estate terms for first-time buyersBefore you start hunting for your dream cottage - whether it’s a large country home on a big lake bustling with boats and jet skis, or a dreamy cabin tucked away in dense foliage - you should first become acquainted with the real estate basics, which means understanding the jargon-y language that realtors often speak.
We spoke with the president of the Ontario Real Estate Association, Ron Abraham, to learn the must-know terms for first-time cottage buyers.
Waterfront Property: Property that borders a body of water such as a lake, stream, river or ocean. Natural water boundaries sometimes lack the precision of a survey of land, so there are various tests and formulas to determine where private property ends. Some of these include the water’s edge and the high water mark.
Shore Road Allowance: Established in the 1800s, a shore road allowance is a strip of land, 1 chain ride (66 feet), around some lakes and rivers that function as public roads to allow access to and from the waterways. Some of these have been opened while others remain as an allowance but were never opened. These are referred to as unopened road allowances.
Access: This refers to how accessible a property is. For instance: Is the property accessible year-round or seasonally? Who owns the roads that provide access to the water? Is the road municipally owned or privately owned? If privately owned, who maintains the road and what is the annual cost?
Land Value: The value of a piece of property, including both the value of the land itself, as well as any improvements that have been made to it such as culverts or a well.
Offer to Purchase: An important legal document that says you are offering to buy the seller’s property.
Conditional Offer: This means that you have placed one or more conditions in the Offer to Purchase. Common conditions include a home inspection, financial approval, and the sale of the buyer’s existing property. The property is not sold until all conditions have been settled.
Closing Costs: Expenses associated with buying a property, in addition to the purchase price. Payable on the completion date, these costs can include legal and notary fees and disbursements, property land transfer taxes, or adjustments for property taxes.
Home Inspection: A properly executed home inspection will thoroughly examine the house and will point out the need for major repairs, identify areas that may need attention, and explain what maintenance will be necessary to keep the home in good shape. You should expect a written report that identifies all findings, including fire and safety concerns.
Building Permit: A building permit grants legal permission to start construction of a building, which includes additions, renovations, and new structures. Permits ensure that construction meets minimum standards set out the building code.
Appraisal: The process of estimating the value of property, usually for lending purposes. This value may or may not be the same as the purchase price of the home.
Deed: A title deed is a legal document that transfers ownership of a property to a buyer.
Amortization: The number of years it would take to repay the entire amount of the mortgage.
Buyer’s Market: When there is a higher number of properties to choose from than buyers available. Property prices tend to be lower and they remain available for longer sale. Buyers usually have more leverage in negotiating a purchase.
Seller’s Market: More buyers are looking for homes than there are homes for sale. Home prices generally increase and sell quickly.
Balanced Market: Where demand for property equals the supply of available property. Sellers usually accept reasonable offers and homes generally sell in sufficient time periods. Buyers usually have more leverage in negotiating a purchase.