B.C. Real Estate Glossary: Terms Explained

A

Adjustments

Amounts shared between buyer and seller on the completion date, such as prepaid property tax, strata fees and utilities.

Agency

The relationship between you and your REALTOR®’s brokerage. In B.C., licensees must give you BCFSA’s disclosure form before giving advice.

Amortization

The total time to pay off a mortgage, usually 25 years, or up to 30 years for first-time buyers and new builds on insured mortgages.

Appraisal

A lender’s estimate of a home’s value, used to approve the mortgage.

Assignment

Selling your presale contract to another buyer before the home is finished. The developer must consent and the sale is reported to the province’s assignment register.

B

BC Assessment

The Crown corporation that values every property in B.C. each year as of July 1. Your notice arrives in January and is used for property tax.

Bare land strata

A strata where owners own their land and house, and share roads or common areas, such as many townhome and detached-home complexes.

Building envelope

The parts of a building that keep water out: roof, walls, windows and doors. New homes in B.C. have 5-year envelope warranty coverage.

C

CMHC insurance

Mortgage default insurance required when you put less than 20% down. The premium is 2.8% to 4.0% of the loan and is usually added to the mortgage.

Completion date

The day the money changes hands and the title is registered in the buyer’s name at the Land Title Office.

Conditional offer / subjects

Conditions in an offer, such as financing, inspection or strata documents, that must be met or removed by a set date.

Contingency reserve fund (CRF)

A strata’s savings account for repairs and replacements of common property.

Contract of Purchase and Sale

The standard written agreement used for most B.C. home sales.

D

Deposit

Money the buyer pays after acceptance or subject removal, usually 5% to 10%, held in trust by a brokerage or lawyer.

Depreciation report

An engineer’s or other qualified professional’s plan for the repair and replacement of a strata’s common property. Stratas with five or more lots need one every five years.

Disclosure statement (REDMA)

The document a developer must give presale buyers describing the project, deposits, budget and risks.

F

Firm sale

A sale with all subjects removed. Both sides are bound to complete.

FHSA

First Home Savings Account: $8,000 a year, $40,000 lifetime, tax-deductible going in and tax-free coming out for a first home.

Form B

A strata Information Certificate showing fees, special levies, legal issues, insurance summary, parking and lockers for a unit.

G

GST

5% federal tax on new homes. Resale homes have no GST. Eligible first-time buyers can get up to $50,000 back on new homes.

H

Home Buyers’ Plan (HBP)

Lets you withdraw up to $60,000 from your RRSP to buy your first home and repay over 15 years.

Home buyer rescission period

A 3-business-day period after acceptance when a resale buyer can cancel by paying 0.25% of the price.

Home warranty (2-5-10)

New homes in B.C. need warranty coverage: 2 years for materials and labour, 5 years for the building envelope and 10 years for structure.

L

Land Title Office

The provincial registry (LTSA) where ownership and mortgages are recorded.

Latent defect

A hidden problem a buyer can’t find with a normal inspection. Sellers must disclose material latent defects they know about.

Leasehold

You own the right to use a property for a fixed number of years, not the land itself. Prices are often lower and financing can be harder.

Listing agreement

The contract between a seller and a brokerage that sets the price, the term and the commission.

M

MLS®

The Multiple Listing Service® system that REALTOR® members use to share listings.

Mortgage stress test

Lenders must check you could afford payments at the greater of your rate plus 2% or 5.25%.

Multiple offers

When two or more buyers make offers on the same home at the same time.

P

Possession date

The day you get the keys, often the day after completion, at noon.

Pre-approval

A lender’s conditional promise to lend up to an amount at a rate held for a set time. It is not a final approval.

Presale

Buying a home from a developer before it is built.

Property disclosure statement (PDS)

A seller’s written answers about the home’s condition and history.

Property transfer tax (PTT)

B.C. tax paid by the buyer when title is registered: 1% / 2% / 3% plus 2% on residential value over $3 million, with exemptions for first-time buyers and new homes.

R

REDMA 7-day rescission

Under the Real Estate Development Marketing Act, presale buyers can cancel within 7 days of signing or receiving the disclosure statement.

S

Special levy

A one-time charge to strata owners to pay for a project or repair, approved by owners’ vote.

Speculation and vacancy tax

A B.C. tax on certain homes left empty or owned by non-residents in designated areas, including most of Metro Vancouver and the Fraser Valley.

Strata

A building or complex where you own your unit and share common property with other owners, run by a strata council.

Strata fees

Monthly fees for building upkeep, insurance, management and the contingency reserve fund.

Subject removal

The buyer’s written notice that conditions are satisfied, making the sale firm.

T

Title insurance

Insurance that protects you or your lender from certain title problems, often required by lenders.