Common real estate terms

For your convenience, all terms relating to mortgages are listed separately.

Agent: A real estate professional registered in Alberta to facilitate the sale, lease or exchange of a property.

Alberta Real Estate Association: An association of real estate industry members who belong to real estate boards in Alberta.

Appraisal: An estimate of a property’s value performed by a professional Appraiser.

Asking (list) price: The price placed on the property for sale by the seller.

Assessed Value: The value of a property, set and used by each municipality for the purposes of calculating property tax.

Attached Goods: An item that is attached to real property so as to form, in law, part of the land. Attached goods belong to the buyer and are also known as fixtures.

Buyer’s Agent (also known as “Buyer’s Broker” or “Purchaser’s Agent”): A person or firm representing the buyer. A buyer’s agent’s primary allegiance is to the buyer. The buyer is the buyer agent’s client.

Buyer Brokerage Agreement: A written agreement between the buyer and the buyer’s agent, outlining the agency relationship between the two parties and the manner in which the buyer’s agent will be compensated. In Alberta, a buyer agency relationship arises automatically without a written agreement establishing the relationship.

Certificate of Compliance: A stamp issued by the municipality which states that the improvements comply with the local building bylaws and requirements.

Client: The person being represented by an agent. The agent owes the client fiduciary duties including utmost care, integrity, confidentiality and loyalty.

Closing Costs: Expenses in addition to the purchase price for buying and selling a property.

Comparative Market Analysis (CMA): The most widely used technique for REALTORS to establish the value of residential properties. It uses sales, competitive listings and expired listings to try to determine a probable selling price for the subject property. Used synonymously with Competitive Market Analysis.

Completion Day: The day from which all calculations of interest, tax adjustments, and utility bill adjustments (if applicable) are made to the credit of either the buyer or the seller. All legal and financial obligations are met on that day and the title to the property is transferred from the seller to the buyer. Completion day is usually (but not always) the same as the possession date.

CMHC: Canada Mortgage and Housing Corporation. A Crown corporation providing information services and mortgage loan insurance.

Commission: An amount agreed to by the seller and the real estate broker/agent and stated in the listing agreement. It is payable to the brokerage on closing and shared, if applicable, among those agents involved in the sale.

Condition Precedent: A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal. May also be called a “subject to” clause.

Condominium Ownership: Shared ownership in a strata-titled property. Owners have title (ownership) to individual units and a proportionate share in the common property.

Conveyance: The term used to describe the process of transferring the seller’s title to the buyer and indicates all the necessary steps to complete the transfer. A conveyancing lawyer is a lawyer responsible for the conveyance process.

Counter Offer: An offer made by the seller back to the buyer altering one or several terms or conditions of the offer as originally written.

CREA: The Canadian Real Estate Association. A national association representing the real estate industry on federal public policy matters, providing member services and education. CREA promotes adherence to a strict Code of Ethics and Standards of Business Practice.

CREA Code of Ethics: Rules of behaviour or conduct that provide a standard of fair, moral practice and a guide by which a REALTOR’s behaviour or conduct is evaluated.

Customer: A person who receives valuable information and assistance from a real estate broker or agent, but is not represented by that individual.

Down Payment: The difference between a property’s purchase price and the amount financed.

Dual Agent: A real estate brokerage that acts as agent for both the seller and the buyer in the same transaction. Both buyer and seller are the brokerage’s clients.

Dual Agency Disclosure: The information that a dual agent must disclose and explain to both buyer or a seller when he/she is acting as a dual agent.

Easement: A legal right to use or cross (right-of-way) another person’s land for limited purposes. A common example is a utility company’s right to run wires or lay pipe across a property.

Edmonton Real Estate Board: The Edmonton Real Estate Board is a professional association of over 2,500 Brokers and Agents in the greater Edmonton area. The Board administers the Multiple Listing Service®, provides professional education to its members, and enforces a strict Code of Ethics and Standards of Business Practice. The EREB also advertises property listings at www.mls.ca, as well as in the Real Estate Weekly and on their website at www.rewedmonton.ca for the benefit of REALTORS and their clients. Commercial listings are advertised on cls.ca and AlbertaFirst.Com.

Encroachment: An intrusion onto an adjoining property. Common examples are a neighbour’s fence, storage shed, or overhanging roof line that partially (or even fully) intrudes onto your property.

Encroachment Agreement: An agreement that allows the encroachment to remain. The owner of the development that encroaches onto the adjoining property is granted the right to enter onto that property to maintain or repair the construction.

Encumbrance: A restriction that is either a monetary claim against the land (such as a lien, mortgage or lease), or a non-monetary one (such as an easement).

Estoppel Certificate: A written statement of a condominium unit’s current financial and legal status.

Fee Simple Estate: Ownership where the owner owns the land now and for all time in the future, and the owner’s rights are subject only to restrictions by the government.

Fiduciary Duty(ies): The duties of loyalty, disclosure, confidentiality, obedience, reasonable care and diligence and full accounting that are required by law of any agent relative to his/her principal.

GE Capital Mortgage Insurance Company: a private sector source of mortgage insurance to lenders in Canada.

Joint Tenancy: A form of ownership in which two or more individuals (often spouses) have an equal share in the ownership of a property. In the event of one owner’s death, his or her share is automatically transferred to the surviving owner(s); and does not become part of the deceased’s estate.

Lien: Any legal claim against a property, filed to ensure payment of a debt.

Listing contract: The legal agreement between the listing brokerage and the seller, setting out the services to be rendered, describing the property for sale and stating the terms of payment. A commission is generally payable to the brokerage upon completion of a sale.

Listing Agent: The REALTOR who signs a contract (on behalf of the brokerage) with an owner to sell the property.

MLS®, Multiple Listing Service®: Trademarks owned by The Canadian Real Estate Association. They are used in conjunction with a real estate database service, operated by local real estate boards, under which properties may be listed, purchased or sold.

MLS® Online^TM aka mls.ca: Carries MLS® property advertisements and consumer-related information supplied by individual real estate boards and associations across Canada.

Mortgage: A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt. Lenders consider both the property (security) and the financial worth of the borrower (covenant) in deciding on a mortgage loan.

Click here for more on Mortgage terminology.

Purchase Contract: The document through which the prospective buyer sets out the price and conditions under which he or she will buy the property.

Organized Real Estate: Refers to the various bodies or groups (CREA, AREA, local boards) who work together to bring about structure, standards and accepted practices in real estate.

Property Taxes: The value of the property as determined by local municipalities affects this levy. Local government determines the rate of taxation. Property taxes are paid on an annual basis.

Real Estate Board: A non-profit organization representing local real estate brokers and agents which provides services to its members and maintains and operates an MLS® system in the community. It offers orientation and other continuing education courses to its members and represents local real estate matters at the municipal level.

Real Property Report: The legal outline of the property and location of all buildings and improvements on the land (formerly called the Surveyor’s certificate).

REALTOR: Trademark identifying real estate professionals in Canada who are members of The Canadian Real Estate Association, and as such, subscribe to a high standard of professional service and to a strict Code of Ethics.

Rights of Way: Are indicated on title at the Land Title Office; often for use of utilities or city or municipality in order to make repairs to pipes, etc. No permanent structure may be built on a right of way.

Seller’s Agent: The seller’s agent represents the seller as a listing agent under the listing contract. His or her primary allegiance is to the seller. The seller’s agent does not represent the buyer.

Single Agency: The practice of representing either the buyer or the seller, but not both in the same transaction.

Statements of Adjustments: Closing statements in a real estate transaction which set out the sources of funds which make up the purchase price, adjustments to and from the purchase price, the final amount required from the purchase and the amount due to the seller. Lawyers will prepare a statement for the seller and the buyer.

Tenancy in Common: The owners each own a part of a common land. If one owner dies, the interest goes to his or her heirs rather than the other owner(s).

Title: The legal evidence of ownership in a property.

Title Search: A detailed examination of the ownership documents to identify the owner and any liens or other encumbrances on the property.

Torrens System: Alberta’s land registry system.

Unattached Goods: Moveable personal property that goes with the seller (also known as chattels).

Zoning: Land use Bylaw specifies in great detail every aspect of how property within a particular area of the municipality may be used.

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