The What’s What of Selling Your Home
Here’s a handy guide to the most common terms being used in the Toronto real estate market.
Closing Date – The day your mortgage and title to the property is transferred into your name. Also the day you can legally move in.
Deposit – An amount of money which must be given to secure a deal once all terms and conditions have been agreed to.
Down Payment – A down payment is the amount, usually stated as a percentage, of the total cost of a property that you pay in cash during the onset of the purchase.
ELFS – An acronym for Electric Light Fixtures. These are usually included in the sale of a property unless otherwise stated in the listing.
Home Inspection – A home inspection is a limited, non-invasive examination of the condition of a home, conducted by a certified home inspector. The inspector prepares and delivers to the client a written report of findings. The client then uses the knowledge gained to make informed decisions about their pending real estate purchase. The home inspector describes the condition of the home at the time of inspection but does not guarantee future condition, efficiency, or life expectancy of systems or components.
Kitec Plumbing – This is a more recent concern in our market. Kitec is a widely used and common plumbing piping system made by IPEX. The fittings are not as strong as originally thought and as result they have been bursting. This piping system has been used in homes and condos. The condos I have known to date with this piping have all provided different solutions. For home owners it will definitely be a more one off situation/fix. The important thing is to have a home inspection. For condo owners the piping can sometimes be difficult to see if it’s behind the walls or in the common areas. We are still discovering the ramifications of this and need to proceed on a case by case basis. Additionally, I have contacted several insurance companies to find out if their policies cover Kitec. For the most part, it is not at the forefront of their concern. Mostly it will be down to confirming the type of pipe which helps to factor in any quotes.
Knob and Tube Wiring – This is a type of wiring in homes until approximately 1950. The main drawbacks about this wiring is the insulation and it’s grounding (or lack thereof). Homes with this wiring not necessarily more dangerous however at some point insurance companies felt there was higher risk (likely due to the age of the wiring or the misuse) and mandated certain fixes before they would insure a home. Depending on the quantity of Knob and Tube, some insurers will ask for either complete removal or some modifications. This amount can be determined by the home inspector. Given the age of most homes in Toronto it is very common that this type of wiring will exist and it’s best to budget accordingly. For more information follow this link.
Market Value – The most probable price (in terms of money) which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue influence.
Multiple Offers – When two or more buyers have submitted offers on a property.
Offer Date/Night – A designated date and time where any interested buyers can submit their offer to buy your home. This is also referred to as a ‘closed bid’ system. Potential buyers are not aware of each other’s offers. Each buyer’s agent submits the offer to the listing agent before the deadline, then the seller then confidentially decides which offer they would like to accept.
Oil Tanks – Oil tanks were used for appliances, furnaces and boilers. In the city we have sometimes seen them in basements or they are buried. The biggest concern is if they are full and leaking. While there have been regulations passed concerning the age of tanks and their associated mandated removal times, not all home owners are aware that they even have one. This is why it is important to have a trained home inspector inspect the property before you purchase.
Possession Date – Similar to closing date: The day you can legally move in.
Pre-Approval – Involves completing your mortgage applications and credit check in advance of your home buying search. When a bank or lender provides you with pre-approval and/or rate hold, it means that they have agreed (based on the information provided) to provide you with a mortgage in the pre-approved amount. This process enables you to know how much home you can afford, know what your payments will be and most importantly, be ready to make an offer as soon as you find the right home.
Pre-emptive Offers or Bully Offers – When a buyer submits an offer to purchase a property in advance of the offer date. This type of offer is meant to motivate the seller to accept before the offer date and is therefore usually much higher than the asking price. Sellers are not legally required to consider this type of offer. Usually a seller’s desire to accept pre-emptive offers is stipulated in the MLS listing.
Registering an Offer – When a buyer formally notifies the listing brokerage’s office of the existence of an offer available for the seller’s review. Buying agents will call the selling agent’s office to register their buyer’s offer. Once an offer is registered with the listing brokerage’s office the agent is required to keep the buying agent up-to-date on the sales status of the property.
Sold Conditionally / Conditional Offer – When a buyer and seller have come to an agreement on a purchase price with a condition that must be satisfied before the deal is considered firm. Common conditions include an inspection by a home inspector or a mortgage approval from the buyer’s bank.
Sold Firm / Firm Offer – When a buyer and seller agree on all terms and conditions of the purchase. Neither buyer or seller can back out of the deal without losing their deposit and incurring legal penalties.
Common Elements – The common elements of the corporation are owned proportionately by the unit owners and consequently are not reflected as assets in these financial statements.
Reserve Fund – The corporation is required by the Condominium Act, 1998 to allocate to a reserve fund, amounts that, calculated from expected repair and replacement costs and life expectancies of the common elements and assets of the corporation, are reasonably expected to provide sufficient funds to repair and replace the common elements and assets. The reserve fund is charged with the cost of major repairs and replacement of common elements and assets of the corporation.
Status Certificate – This document gives the “overall” view of the condo corporation including its financial wellness. It also discusses rules and regulations of the condo building i.e if pets are allowed.