There are many common terms and terminology in real estate that are not only used in BC but Canada wide. We have created a glossary of real estate terms for British Columbia to help guide you.
Adjustable Mortgage Interest Rate: This type of mortgage has an adjustable rate. This means that both the interest rate and the payment change based on the conditions of the market.
Agency: This is the type of relationship with the party in the real estate transaction. In BC Realtors can offer designated agency, where they work for the client (abiding by all rules of confidentiality) and no agency where the Realtor is not providing representation to the party. Limited dual agency is no longer permitted in BC except in very rare occasions which really don't exist in any populated area.
Amortization: The amount of time it will take for the loan to be paid in it's entirety assuming that the payments are regular.
Appraisal: This is a report created by an Appraiser who is hired to determine the market value of a property. An appraisal is typically done before conditions or subjects are removed from a purchase agreement. The bank or mortgage lender typically hires an appraiser.
Assignee: The person to whom an interest or right in real property is transferred to.
Assignment: The act of transferring a claim, interest or right from one person to another person or corporation. Assignments are often seen when a Buyer purchases a property as a pre-sale. Before the contract completes on that purchase the Buyer assigns the purchase agreement to another Buyer who would then complete and own the property.
Balanced Market: A market where the conditions are equal and don't favor a Seller or Buyer. See Buyer's Market or Seller's Market.
BC Assessment: This is the provincial governing body that is responsible for property valuations for the purpose of assessing property taxes. BC Assessments are completed in July 1 and provided to owners in the following January for that calendar year.
Blended payment: A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases.
Brokerage: Every licensed Realtor in BC must be under a Brokerage where they provide real estate services. A Brokerage is a firm that has a number of agents who work independent of each other and are managed by a Managing Broker.
Building Information Request (BIR): In the City of Kamloops and TNRD region often Buyer's and their agents require a copy of the Building Information Request from the City of Kamloops or TNRD. This BIR shows any outstanding permits or notes regarding the property being sold. The TNRD has a large number of outstanding building permits on their properties. Unfortunately the building permits were not closed consistently through the TNRD. This is uncommon in the city of Kamloops.
Buyers Market: This is a market where it favors Buyers. There typically are much more homes to buy than there are buyers to buy those homes. The Buyer's purchasing and negotiating power stronger in this scenario.
Carriage home: A carriage home is normally a secondary structure on a property (second to a primary home) that is attached by a garage or carport. In Kamloops carriage homes are often suites above a garage. This type of home is a two storey style with a building foot print no larger than 80m2 (861 sq feet) and no larger than 95m2 (1,022 sq feet) of living space. Here is more information from the City of Kamloops regarding secondary suites.
Certificate of Pending Litigation: This is a notice of court action against the title of a property. Often we see this when a property is going into foreclosure.
Comparative Market Analysis (CMA): This is something done by a Real Estate Agent where they analyze the value of a property when compared to other comparable sales and current listings. This helps sellers establish an asking price for a property.
Closed mortgage: In some cases, a closed mortgage cannot be paid off or renegotiated, in whole or in part, before the end of its term unless the buyer is willing to pay a penalty.
Closing costs: These are costs that are associated to the final completion or purchase of a home. Closing costs are typically legal fees, property transfer tax, property tax, utility and strata fee adjustments and disbursements which are payable on closing or completion day. Contact your mortgage broker and Realtor to ensure you have all the information on your closing costs for your Kamloops purchase.
CMHC: This stands for Canada Mortgage and Housing Corporation which is a Crown corporation and they administer the National Housing Act for the federal government. Their mandate is to encourage the improvement of housing and living conditions for all Canadians. CMHC also is involved in insuring high ratio mortgages (those under 20% down.
CMHC Insurance Premium: This applies to Buyers purchasing a home with less than 20% down payment. In this case an insurance premium is paid to CMHC and an insurance policy is issued to the lender of the mortgage.
Commitment Letter (or Pre-Approval Letter): This is a letter provided to the Buyer and their Realtor representative stating that the Buyer is preapproved for financing. It often specifies some of the basic terms and the amount of the mortgage the Buyer is preapproved for.
Completion Day: This is the day that the money changes hands from the Buyer to the Seller. At this time the title changes from the Seller's name(s) to the Buyer(s).
Compound interest: Interest calculated on both the principal and the accrued interest.
Conditional Offer: This is an offer that is accepted with conditions or subjects. There is a specific date that the conditions have to be met by also called the Subject Removal Date.
Condominium (condo): This is a strata or home owners association property where the units are in a high or low-rise building. Typically condos have one common entry and entrances to units fall within a common hallway. Some condos have walkways on the outside of the building but are still commonly used by owners. Condos are typically one level contained living space but can also have a loft or second level in rare occasions. These units have monthly maintenance or strata fees which go towards maintenance of the property, insurance and utilities. These properties are governed by bylaws and have to abide by the BC Strata Act.
Conventional mortgage: A mortgage loan up to a maximum of 80% of the lending value of the property. Typically, the lending value is the lesser of the purchase price and market value of the property.
Conveyance: This term is used to describe the process of transferring the Seller's ownership in the title to the Buyer's.
Conveyancer: This is a lawyer or notary who would be hired by each party in a transaction to represent them for the transfer of the title. Real estate offices also have Conveyancing Secretaries to process the paperwork before they are sent to the conveyancer.
Co-op: This is a way to own property without title, but through the purchase of a share through a cooperative. The Cooperative owns the building and the land (or leases the land in some cases) and a Buyer obtains shares in the cooperative.
Counter Offer: A Buyer submits an offer, the Seller does not accept that offer and sends the Buyer a counter offer changing things such as the dates, price or conditions.
Consumer Price Index (CPI): A measure that examines the weighted average of prices of consumer goods and services, such as transportation, food and medical care, calculated by averaging price changes for each item.
Court Ordered Sale: This is typically also known as a foreclosure. It occurs when a registered owner such as a bank obtains an order to sell a home. The sale must be approved by the court and there is a foreclosure process with many steps in this case. Refer to our foreclosure guide for more information.
Credit History or Credit Report: A report a lender uses to establish how good the credit is of a potential borrower. It shows information about the creditor’s ability to handle debt obligations and any outstanding debts.
Curb Appeal: This is the first impression a property has from the curb. Essentially when a buyer pulls up to see a home, is it presentable, tidy and appealing or is the property in disrepair and not appealing to a buyer.
Defects: Material latent defects are not discoverable through normal inspection and must be disclosed by the Seller of a property. Patent defects are discoverable through a normal inspection.
Deposit: This is negotiated in the agreement to purchase and it is where a Buyer offers an amount of money for a purchase that will be held in the Trust Account of the Real Estate Brokerage (typically but sometimes the lawyers). The deposit forms part of the down payment for the purchase of a property.
Depreciation: The decrease in value of something because it is now worth less than when you bought it.
Down payment: The total amount of funds a buyer needs to put towards the mortgage that is not being finances. The minimum down payment in Canada for a home is 5% (if under $500,000). If a purchase is over $500,000 it is 5% up to $500,000 and 10% for the amount between $500,000 and $1million.
Easement: An interest in land owned by another person that benefits the person (or entity) who has the easement, for a specific limited purpose (i.e. right of way permitting passage over a particular strip of land) such as with public utilities. We often see easements for Telus, BC Hydro, Fortis (gas) etc.
Encroachment: When a structure (ie shed, fence etc) illegally invades or intrudes onto a property (public or private).
FINTRAC: The Financial Transactions and Reports Analysis Centre of Canada. All people buying or selling real estate in BC are required to submit their FINTRAC information in order to process the transaction. This normally includes a drivers license, BCID or passport.
Fixed mortgage interest rate: A locked-in rate that will not increase for the term of the mortgage. For example, a 4.79% rate for a 5 year term.
Foreclosure: A legal process by way a lender or mortgagor takes possession of a property usually due to non payment of the mortgage. The lender then goes through a court process allowing that bank/lender to sell the property to cover the unpaid mortgage debt. See our foreclosure page here.
Garden Home: This is a one storey home that is a second home on a property. It can be no larger than 80m2 (861 sq feet) and is smaller than the main house on the property. Here is more information from the City of Kamloops regarding secondary suites.
Grow-op: Typically a marijuana-growing operation, usually located in a house. A gro-op would be a process beyond what is legally allowed to be grown in a property in BC by law. All gro-ops must be disclosed to potential Buyers of properties.
High-ratio mortgage: A mortgage loan higher than 80% of the lending value of the property. This type of mortgage must be insured — by CMHC or a private company, for the benefit of the approved lender, against payment default.
Home Inspection Report: A report prepared by a certified home inspector on behalf of the buyer when purchasing a property. The Buyer typically hires the home inspector resulting in the buyer having ownership in the home inspection. The buyer is not under any obligation to share the home inspection with the seller or Agents.
Home Owner Grant: A BC provincial program designed to provide property tax relief for most owners of residential properties that are owner-occupied. Rental properties are not included in this and Seniors often qualify for a higher home owner grant than those who are younger.
Housing Starts: The number of new housing units on which construction has been started in a given period.
In-law Suite: This is a suite in a home where it is not a legal suite but doesn’t necessarily house ‘in-laws’. An in-law suite often has a separate kitchen, living quarters and entry however doesn’t have the construction or separate utilities of a legal suite. Here is more information from the City of Kamloops regarding secondary suites.
Inflation: A rise in the general level of prices of goods and services in an economy over a period of time.
Interest rate: The price paid for the use of money borrowed from a lender.
Joint Tenancy: When purchasing a property where two or more people have undivided and equal ownership in that property.
Leasehold Title: This is an ownership in a property as a lease (agreement for a person to use the land for a specified amount of time). In Kamloops there are a number of leasehold properties such as Sun Rivers. The Leasehold title is also called a Parcel Abstract. Leases range in length of time, terms and details. There are a number of 99 year prepaid leases in Kamloops where there are not any ongoing lease payments and there are also shorter lease terms (such as properties on Paul Lake) where the term is shorter and there are annual lease payments. Leasehold is not only for native land, there are also government or crown leases.
Legal Suite: A legal suite is one where a home is located on a lot that is zoned for a legal suite. The suite itself was constructed under permit and the construction follows all local requirements for the suite to be legal and recognized as so. In the city of Kamloops just because a lot is zoned for a legal suite does not make the suite in a home legal. Here is more information from the City of Kamloops regarding secondary suites.
Lien: A claim against a property for money owing. A lien may be filed by a supplier or a subcontractor who has provided labor or materials but has not been paid.
Lump sum prepayment: An extra payment that is made in lump sum. This is paid in order to reduce the principal balance of the mortgage, with or without penalty.
Maintenance fee: This is a monthly fee paid to a strata or Home owners association for the maintenance of the common lands, buildings and cost to run the strata or HOA.
Maturity date: The last day of the term of the mortgage. On this day, the mortgage loan must either be paid in full or the agreement renewed.
Mortgage: A mortgage is a secured interest given to a Buyer for a property they are purchasing which secures repayment of the loan related to that property. A mortgage is registered on the title of the property. That security interest is discharged or removed off of the title on payment of the principal and interest owning on the loan in accordance with the mortgage commitment document.
Mortgagee: The lender who provides the mortgage loan.
Mortgagor: The person who take out the mortgage loan and who is responsible for repayment.
Mortgage broker: A professional who looks at a number of lenders and matches a mortgagor to a lender with the best terms and conditions for that mortgagor.
Mortgage term: Length of time that the mortgage contract conditions, including interest rate, is fixed.
MLS — Multiple Listing Service: This is a nationally distributed system that contains all properties that are listed for sale under a licensed Agent in Canada. A MLS contains descriptions, information and specifications of homes available for sale. This system is internet based and regularly kept up to date often times hourly.
New Home Warranty: This is for newly built homes and often known as the 2-5-10 program in BC. It specifies the amount of time an item is covered under a warranty. For instance in BC often the entire home has 1 year warranty for deficiencies (outside of wear and tear), up to the 2 year mark all of the mechanical us under warranty, 5 years includes water leakage aspects of your building envelope and 10 years covers major structural defects. All new homes are required to have a Home Warranty which is associated with a New Home Warranty Insurance provider.
Offer to purchase: This is a contract that is prepared typically by your Realtor on behalf of a Buyer on a property they want to purchase. This contract sets out the terms, conditions, price, inclusions and completion date for the home. If the contract to purchase is accepted by the Seller it is a legally binding agreement.
Open mortgage: A flexible mortgage that allows you to pay part before the end of its term.
Open House: This is a scheduled time where the home for sale is open and available for the public to view. Potential buyers don't have to have scheduled showings rather they can show up during the posted time. A licensed Realtor must be in attendance for the open house to host the people viewing the property.
Operating Costs: The cost of the monthly expenses when owning a home. These include (but not limited to) property taxes, property insurance, utilities, and maintenance and repairs.
Parcel Abstract: This a form showing ownership in a leasehold property. In Kamloops and the TNRD there are a number of leasehold properties such as Sun Rivers. When a property is being sold and leased to a new Buyer the Seller will have a copy of the Parcel Abstract showing the Seller's ownership in the lease. On closing the Buyer's name will then appear on the parcel abstract.
PCS (Private Client Services): This is a search provided by your Realtor which gives you access to up to the minute information regarding new listings, sales, price reductions and much more. This system is tied to your Realtor's internal interface and is a great tool for finding a home or property. Contact us to get your own PCS account.
Portable Mortgage: A mortgage feature that allows borrowers to take their mortgage with them without penalty, when they sell their present home and buy another one. Often there is a time limit of 90 days imposed on this mortgage port.
Possession Date: This date is set out in the initial purchase agreement or offer to purchase. It often follows the Completion Date by a day however in the case of a vacant property it can be the same day as the completion date and in some cases there are a few days between the Completion date and Possession Date. Possession day includes a date and time that the Buyer gets the keys!
Pre-approved Mortgage: This is when a formal letter is provided to a Buyer stating a mortgage approval based on conditions, the amount the Buyer is approved for and a time limit on that approval.
Pre-qualification: This is a preliminary procedure where Buyers can find out approximately what they can afford for a mortgage based on their income, assets and liabilities. Often at this stage a credit report has not been obtained so the pre-qualification is not something to depend on. Buyers should get a pre-approval before proceeding to purchase.
Principal: The amount of money that is borrowed for a loan.
Property Disclosure Statement: This is a document filled out by a Seller of a property that discloses everything the seller knows about that property.
Property Transfer Tax: In BC Property Transfer Tax applies to all Buyers who register a land title transfer in the BC Land Title Office. Some Native Bands also charge PTT (ie Kamloops Indian Band). First time buyers are often exempt from PTT (within a threshold of purchase price).
Property taxes: These are the taxes that are charged by the city or municipality that the home is located in. The taxes are based on the BC Assessment which comes out in early January every year. Sometimes if set out by the Owner of the home, the lender will collect taxes monthly as part of the mortgage payment to cover the property taxes. The lender would then pay the city or municipality on the owners behalf.
Real Estate Services Act: The BC statute that imposes licensing requirements on persons who provide trading services related to real estate, rental management services and strata management services.
Realtor or Real Estate Agent: A professional who holds a real estate trading services license who acts as an intermediary between the Seller and the Buyer of a property.
Rescission Period: When purchasing a property in BC there is a mandatory 3 day rescission period where a contract is rendered null and void should a buyer rescind within those 3 business days. There is a financial penalty for the rescission.
Reserve fund: Also knows as the Contingency Reserve Fund. A fund required to be set up by a strata or HOA corporation for major repair and replacement of common elements and assets of a development. This amount is set aside by the Management Company on a regular basis so that funds are available for emergency or major repairs. This is heavily regulated in British Columbia.
Restrictive covenant: Restrictive covenant agreements are signed agreements usually between a property owner (covenantor) and covenantee that is registered on the title of a given property. The agreement usually specifies some restriction of activities, building, or land-use that is applied to a portion of the subject property.
Sellers’ Market: This is a market where it favors Sellers. In this case there are more Buyers to purchase homes on the market than there are homes available for sale. In this scenario the prices of homes often become more expensive and we see more multiple, competing offers.
Strata Property Act: This is BC legislation governing strata owners and those who transact with strata corporations.
Strata Fee: This is a monthly fee paid to a strata or Home owners association for the maintenance of the common lands, buildings and cost to run the strata or HOA. Often in Kamloops strata fees will include water, sewer and garbage services. Some strata’s also include building insurance and other amenities. Each strata or HOA is different so it is important to know what is included when considering a purchase.
Tenants in Common: When registering a purchase on title, this is when two or more people acquire interests in a single property. The percentage ownership is not often equal but it is a pre-determined amount.
Time Clause: This is something included in an offer often when a Buyer has to sell their own home. A time clause allows a Seller to accept another offer and at that time tell the Buyer with the time clause to either remove conditions within a specified amount of time or let the Seller sell the property to another party. Often time clauses run from 24 to 72 hours but there is no "standard". Time clauses are found in other scenarios however the subject to sale time clause is the most commonly found.
Townhouse: This is a strata or home owners association development where the units are semi-attached for fully attached units that can be on one or more floors however have their own outside entry. Often townhouses are called townhomes or row houses. A number of townhomes will have garages or carports for parking. These homes have monthly fees that go towards the maintenance and repair of the common grounds and in some cases the townhomes themselves. Each development is structured differently as to what is included in their monthly fees.
Single Family Detached Home: Also known as simply a detached home or single family home. This is a free standing home with no attached walls which is built for a single family. This does also include homes that have basement suites. There are single family detached homes in bare land strata developments in Kamloops where the owners of the homes in the bare land strata pay a fee for basic maintenance of the roads, lighting and often water and sewer service charges.
Subject Clause: These are conditions written into an agreement or contract to purchase a property. The most common subject clauses or conditions are 'subject to financing' or 'subject to obtaining a home inspection'. Conditions or subjects have a date where a Buyer has to satisfy those conditions. Once the subjects are satisfied the Buyer removes all subjects making the contract unconditional also known as "firm".
Subject Removal: This is commonly 10 business days for most typical conditions or subjects on a purchase agreement. If a Buyer makes an offer subject to the sale of another property the conditions or subjects can run longer than the 10 business day period. Once all the subject clauses are satisfied the Buyer would remove all conditions or subjects making the contract unconditional, subject free or "firm".
Survey Certificate: Typically a document on 8x11 letter paper which shows the property boundaries, measurements and shows the location of the home and buildings. It also shows easements, encroachments and other property features. Sometimes owners have survey certificates which are out of date due to additional structures being built on the property (sheds) or a new fence erected.
Term: Mortgage term is the length of time that the mortgage contract conditions, including interest rate, are fixed.
Title: This is obtained from the BC Land Title Office and shows the legal description of the land, the land holder's name, type of ownership and address (from when the purchase was registered). The title will also have any registered charges on it such as mortgages, easements, rights of ways and liens.
Title Insurance: This is insurance that typically a lender requires a mortgagor take out on a property which insures against loss or damage arising from a matter affecting the title to real property. It is also recommended that a Buyer takes out title insurance when they purchase a home. It is a one time charge that is completed at the lawyers office before completion.
TNRD: Thompson Nicola Regional District: This is the governing body for the Thompson Nicola region of BC. The TNRD region includes a range of rural and urban areas. It is located in the City of Kamloops, extends up the north Thompson Valley, to the west in Lytton where the Fraser and Thompson River join and then further south west to the Lower Nicola where there are a number of ranching communities. There are more than 60 provincial parks, 11 municipalities and 10 electorial areas within the TNRD.
Unit: This is a term used to describe the individual home or apartment held by the owner within a strata (condo or townhouse) development.
Variable mortgage interest rate: Fluctuates based on market conditions but the mortgage payment remains unchanged.
Vendor: The seller of a property.
Vendor take-back mortgage (Sometimes called take-back mortgage): The vendor, not a financial institution, finances the mortgage. The title of the property is transferred to the buyer who makes mortgage payments directly to the seller.