Real Estate Terms You Should Know
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Real estate is full of industry terms that you may never have heard before you started looking for your new home. Here are a few important ones to help you better understand the process and plan your move.
IRREVOCABLE - When submitting an offer, the buyer inputs an irrevocable time and date (let’s say, irrevocable until Monday night at 10 pm). This means that the contract is legally binding for the buyer until Monday at 10 pm. During that time, the seller has the opportunity to accept or counter the offer. The offer becomes null and void once the irrevocable time and date has passed without acceptance or a counteroffer.
If the offer is countered by the seller, the seller will put a new irrevocable time and date which means the seller will be bound to the agreement until that specific time.
CLOSING (& CLOSING COSTS) - Closing day! This is the day that the property deed is transferred into the buyer’s name and the funds are transferred to the seller. Best of all, this is the day the buyer gets their keys! There are certain costs to consider such as land transfer tax, realtor fees, insurance and lawyer fees to name a few. It’s important to factor in these closing costs while considering your overall home purchase.
MULTIPLE LISTING SERVICE (MLS) - The MLS is a hub of information for realtors and is also where realtors upload their listings. There are over 65,000 realtors that are apart of the Toronto Real Estate Board so it’s basically a guarantee that once a listing is uploaded to the Toronto MLS there will be lots of eyes on the property. Bettering a seller’s chances of successfully selling their property.
DUE DILIGENCE- When making home purchases, it’s important to perform due diligence so you have all the information to make an informed decision. Due diligence involves reviewing inspections (home, termite), having a lawyer review the status certificate (if condo), viewing the property and ensuring things are to your liking, and having your realtor verify certain information.
Due diligence is usually performed either before an offer date or during the conditional period.
DAYS ON MARKET (DOM) - Have you ever looked at a listing and said, what the heck does DOM mean? Well, now you know. It refers to how many days the property has been listed on the MLS. The first day is 0.
HOLDING BACK OFFERS - When a property is listed for sale but will not accept offers until a specific date. For example, 123 Best Street is “holding back” offers until Tuesday, January 14 at 6 pm. It is up to the seller whether or not they will review preemptive offers before the presentation date.
PREEMPTIVE (BULLY) OFFERS - When a seller decides to “hold back” offers until a specific date, sometimes they will allow preemptive offers. This means that a buyer who LOVES the property can submit an offer before the offer presentation date in the hopes of having it accepted before the offer date.
FIRM OFFERS - A firm offer is one which has no conditions. This tells the seller that the buyer is serious about purchasing the home. It’s important to discuss with your realtor the risks of waiving conditions. That being said, it’s common for buyers to do this in competitive marketplaces such as Toronto.
CONDITIONAL OFFER - When buyers submit offers “with conditions” it is called a conditional offer. These conditions can vary. Common ones include a financing condition or a status certificate review. Once the conditions are fulfilled to the buyer’s satisfaction, the sale becomes firm. If the conditions are not fulfilled to the buyer’s satisfaction, the transaction does not go through and the buyer’s deposit is returned.
MULTIPLE REPRESENTATION - When two parties are represented by the same brokerage. This can mean one real estate agent is representing both the buyer and the seller. It can also mean the buyer and seller are using different real estate agents who work at the same brokerage. Disclosure is required in multiple representation scenarios.
We hope you find these definitions helpful! This is just the tip of the iceberg when it comes to real estate jargon. If you’re hung up on any words, feel free to shoot us a message.
