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Peter Mazzuchin
Real Estate Broker, Investor, Author, B. Comm

Keller Williams Real Estate Associates, Brokerage
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If you’re like most consumers, you may find real estate terminology perplexing and downright frustrating at times. After all, not many people discuss easements or encroachments on a regular basis. However, if you’re about to buy a home, it’s important to understand this language. To help you get a head start, a list of common real estate terminology is listed below.
Amortization: The number of years it takes to repay the entire amount of the mortgage.
Appraisal: An estimate of a property’s market value, used by lenders in determining the amount of the mortgage.
Appreciation: The increase in a property’s value over time.
Blended Mortgage Payments: Equal or regular mortgage payments, consisting of both a principal and an interest component.
Broker: A real estate professional licensed by Ontario to facilitate the sale, lease or exchange of a property.
Buy-Down: When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and market rate directly to the lender - or to the purchaser – in one lump sum or monthly installments.
Closing: The real estate transaction completion, when the parties involved agree that all legal and financial obligations have been met, and the deed to the property is transferred from the seller to the buyer.
Closing Costs: Expenses in addition to the purchase price for buying and selling a property.
Common Elements: The portions of a condominium development owned in common (shared) by the unit owners.
Conventional Mortgage: A first mortgage issued for up to 75 percent of the property’s appraised value or purchase price, whichever is lower.
Counteroffer: One party’s written response to the other party’s offer during a negotiation of a real estate purchase between buyer and seller.
Debt Service Ratio: The percentage of a borrower’s gross income that can be used for housing costs, including mortgage payment and taxes (and condominium fees, when applicable).
Deed: A legal document that conveys (transfers) ownership of a property to the buyer.
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.
Encroachment: An intrusion onto an adjoining property. A neighbour’s fence, storage shed or overhanging roof line that partially (or even fully) intrudes onto your property are examples of encroachments.
Equity: The difference between the price for which a property can be sold and the mortgage(s) on the property. Equity is the owner’s stake in a property.
Land Transfer Tax: Payment to the provincial government for transferring property from the seller to the buyer.
Lien: Any legal claim against a property, filed to ensure payment of a debt.
Mortgagee: The lender.
Mortgagor: The borrower.
Multiple Listing Service (MLS): A system for relaying information to Realtors about properties for sale.
Open Mortgage: A mortgage that can be prepaid or renegotiated at any time and in any amount without penalty.
Title: The legal evidence of ownership in a property.
Title Search: A detailed examination of the ownership documents to ensure there are no liens or other encumbrances on the property, and no questions regarding the seller’s ownership claim.
Variable-Rate Mortgage: A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market rates. If market rates go up, a larger portion of the payment is interest. If rates go down, a larger portion of the portion of the payment is applied to the principal.
Zoning Regulations: Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.
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