Canadian Real Estate Glossary: Every Term Explained

A–D

Abatement: a reduction in rent or purchase price for a specific reason. Amortization: total repayment period for a mortgage (typically 25 or 30 years). Assessment: municipal valuation of a property for tax purposes. Bully offer: an offer submitted before the scheduled offer review date, with a short irrevocable period to pressure the seller. Bridge financing: short-term loan covering the gap between buying a new home and selling an existing one. Buyer's agent: a real estate agent whose fiduciary duty runs to the buyer. Cap rate: net operating income divided by property value — used for investment property analysis. Chattel: movable personal property (appliances, window coverings) that may or may not be included in a sale. Closing: the date legal ownership transfers. CMA: Comparative Market Analysis — agent analysis of recent sold data. Condition: a clause requiring a specified event before the deal becomes firm.

E–L

Easement: legal right of one party to use part of another's property (e.g. utility easement, right of way). Equity: property value minus outstanding mortgage balance. Escalation clause: offer clause automatically beating competing offers by a set amount up to a ceiling. Estoppel certificate: condo document confirming current fees and legal status. Firm deal: all conditions have been waived — the sale is legally binding. GDS: Gross Debt Service ratio (housing costs / gross income, max 32%). High-ratio mortgage: down payment under 20% — CMHC insurance required. Holdback: funds withheld after closing pending completion of agreed repairs. Irrevocable period: window during which an offer cannot be withdrawn. LTV: Loan to Value ratio (mortgage / property value). Latent defect: hidden defect not discoverable on reasonable inspection — must be disclosed by seller.

M–R

Market value: price a willing buyer and seller would agree on in an arm's length transaction. Maturity date: end of a mortgage term — must renew, refinance, or pay off. MPAC: Municipal Property Assessment Corporation (Ontario). MLS: Multiple Listing Service — database of listed properties shared among REALTOR® members. NOA: Notice of Assessment — annual CRA document confirming your filed income. Open mortgage: can be repaid in full at any time without penalty (carries higher rate). Patent defect: visible defect observable on reasonable inspection. Portability: ability to transfer your existing mortgage to a new property without penalty. Prepayment privilege: annual right to make extra principal payments without penalty. PRE: Principal Residence Exemption — tax exemption on capital gain from your home. Quiet enjoyment: tenant's right to use their unit without unreasonable landlord interference.

S–Z

Schedule A: additional terms appended to an Agreement of Purchase and Sale. Seller's market: demand exceeds supply — sellers have pricing power and typically receive multiple offers. Status certificate: condo document with financial statements, reserve fund study, rules, and litigation history. Stress test: federal mortgage qualifying test — must qualify at contract rate + 2% or 5.25%, whichever is higher. TDS: Total Debt Service ratio (all debts / gross income, max 44%). Title: legal ownership of real property registered at the Land Registry. Title insurance: policy covering title defects, survey issues, zoning violations, and title fraud. Vendor take-back mortgage: seller provides financing to buyer as part of the transaction. Working with a REALTOR®: disclosure document explaining the agency relationship — required by RECO in Ontario.

Checklist

Checklist