Royal LePage Canadian Real Estate Glossary
Your comprehensive guide to essential real estate, mortgage, legal, and housing market terms in Canada.
Buying & Selling Process
Financing & Mortgages
Legal, Title & Taxes
Property Types
Market & Valuation
People & Roles
Financing & Mortgages
Legal, Title & Taxes
Property Types
Market & Valuation
People & Roles
A. Buying & Selling Process
Accepted Offer: A purchase offer the seller has signed and agreed to, forming a binding agreement once all conditions are met or waived.
Agreement of Purchase and Sale (APS): The legal contract between buyer and seller outlining price, conditions, closing date, and included items.
Amortization Period: The total length of time (typically 25–30 years in Canada) it will take to pay off a mortgage in full.
Appraisal: A licensed professional’s estimate of a property’s market value, usually required by the lender before mortgage approval.
Assignment Sale: When the original buyer of a pre-construction property sells their contract to a new buyer before the building closes.
Building Inspection / Home Inspection: A professional assessment of a property’s physical condition, structure, and systems prior to purchase.
Closing Costs: Fees paid at the completion of a real estate transaction, including legal fees, land transfer tax, title insurance, and adjustments.
Closing Date: The date ownership and possession of the property legally transfer from seller to buyer.
Conditional Offer: An offer to purchase that depends on specific conditions being satisfied (e.g., financing, home inspection) before it becomes binding.
Counter-Offer: A response to an offer that changes one or more terms, requiring the other party’s acceptance to proceed.
Deposit: Funds provided by the buyer at the time of offer to demonstrate serious intent to purchase; credited toward the purchase price at closing.
Firm Offer: An offer with no conditions attached, which becomes a binding contract immediately upon acceptance.
Irrevocable Date: The deadline by which an offer must be accepted, rejected, or countered before it expires.
Multiple Offers / Bidding War: A situation where more than one buyer submits an offer on the same property at the same time.
Notice of Fulfillment: A formal document confirming that all conditions in an agreement of purchase and sale have been satisfied.
Possession Date: The date the buyer is legally entitled to occupy the property; may differ slightly from the closing date.
Pre-Approval (Mortgage Pre-Approval): A lender’s conditional commitment estimating how much a buyer can borrow, based on income, credit, and debt review.
Subject-Free Offer: See Firm Offer.
Title Transfer: The legal process of transferring property ownership from seller to buyer, registered with the applicable provincial land registry.
B. Financing & Mortgages
Amortization: See Amortization Period.
Blended Payment: A mortgage payment that combines both principal and interest into a single, consistent amount.
CMHC (Canada Mortgage and Housing Corporation): The federal Crown corporation that provides mortgage default insurance and housing market research in Canada.
CMHC-Insured Mortgage: A mortgage backed by default insurance, typically required when the down payment is less than 20% of the purchase price.
Conventional Mortgage: A mortgage where the down payment is 20% or more of the purchase price, not requiring mortgage default insurance.
Credit Score: A numerical rating of a borrower’s creditworthiness, used by lenders to assess mortgage eligibility and interest rate.
Debt Service Ratio (GDS/TDS): Gross Debt Service and Total Debt Service ratios measure what percentage of a borrower’s income goes toward housing and total debt payments; used by lenders to qualify borrowers.
Down Payment: The portion of the purchase price paid upfront by the buyer, not financed through the mortgage.
Fixed-Rate Mortgage: A mortgage with an interest rate that stays the same for the entire term.
High-Ratio Mortgage: A mortgage where the down payment is less than 20%, requiring mortgage default insurance.
Home Equity: The portion of a property’s value the homeowner actually owns, calculated as market value minus outstanding mortgage balance.
Home Equity Line of Credit (HELOC): A revolving credit line secured against the equity in a home.
Mortgage Broker: A licensed professional who connects borrowers with lenders and mortgage products, often across multiple institutions.
Mortgage Default Insurance: Insurance (commonly through CMHC, Sagen, or Canada Guaranty) that protects the lender if a borrower defaults on a high-ratio mortgage.
Mortgage Life Insurance: Optional insurance that pays off some or all of a mortgage balance if the borrower dies.
Mortgage Rate Hold: A guaranteed interest rate a lender will honour for a set period (commonly 90–120 days) while a buyer shops for a home.
Mortgage Renewal: The process of negotiating new terms with a lender when a mortgage term ends, without discharging the loan.
Mortgage Stress Test: A federal requirement that borrowers qualify at a higher “qualifying rate” than their actual contract rate, to ensure they can handle rate increases.
Mortgage Term: The length of time a specific mortgage contract (rate and conditions) is in effect, typically 1–5 years, within the longer amortization period.
Open Mortgage: A mortgage that can be paid off, in whole or in part, at any time without prepayment penalties.
Porting a Mortgage: Transferring an existing mortgage (and its rate/terms) to a new property.
Prepayment Penalty: A fee charged by a lender when a borrower pays off or refinances a mortgage before the term ends.
Second Mortgage: An additional loan secured against a property that already has a primary mortgage.
Variable-Rate Mortgage: A mortgage where the interest rate fluctuates with the lender’s prime rate over the term.
C. Legal, Title & Taxes
Certificate of Location (Certificat de localisation) QC: A Quebec-specific legal document showing a property’s boundaries, structures, and any encroachments, prepared by a land surveyor.
Chattels: Movable personal property not permanently attached to the home (e.g., furniture, appliances not built in) and generally not included in a sale unless specified.
Encroachment: A structure or object that crosses a property line onto a neighbouring property.
Estoppel Certificate: A document (common in condo transactions) confirming the current status of a unit’s fees, reserve fund, and any outstanding obligations.
Fixtures: Items permanently attached to a property (e.g., built-in appliances, light fixtures) that are included in a sale by default.
Foreign Buyer Ban: Federal restrictions limiting non-Canadian purchases of residential property, with exemptions varying by buyer status and property type.
Foreign Buyer Tax: Additional provincial land transfer tax applied to non-resident buyers in certain markets (e.g., Ontario’s Non-Resident Speculation Tax, B.C.’s Additional Property Transfer Tax).
Freehold: Ownership of both the building and the land it sits on, with no ongoing condo-style fees (though may still have a homeowners’ association).
GST/HST on New Homes: Federal and provincial sales tax applicable to newly constructed or substantially renovated homes, with rebates available in some cases.
Land Transfer Tax: A provincial (and in some cities, municipal) tax paid by the buyer upon closing, calculated as a percentage of the purchase price.
Land Transfer Tax Rebate: A rebate available to eligible first-time homebuyers in certain provinces and municipalities, reducing or eliminating the land transfer tax owed.
Lien: A legal claim against a property, often for unpaid debt, that must typically be resolved before the property can be sold.
Notaire QC: In Quebec, the licensed legal professional (notary) who handles real estate transactions, title verification, and registration — replacing the role a real estate lawyer plays elsewhere in Canada.
Property Tax: An annual tax levied by the municipality, based on the assessed value of a property.
Real Estate Lawyer: Outside Quebec, the licensed lawyer who reviews the agreement, handles title search, and manages the legal closing of the transaction.
Right of First Refusal: A contractual right giving a party the option to purchase a property before the owner can accept a competing offer.
Speculation and Vacancy Tax: A provincial or municipal tax (notably in B.C.) applied to residential properties left vacant, aimed at increasing housing supply.
Title Insurance: Insurance that protects buyers and lenders against losses from title defects, fraud, or errors in the public record.
Underused Housing Tax (UHT): A federal tax on vacant or underused residential property owned by certain non-resident or non-Canadian owners.
Vendor Take-Back Mortgage: Financing where the seller acts as the lender, allowing the buyer to make payments directly to them instead of a bank.
Zoning: Municipal regulations that dictate how a specific parcel of land or property can be used (residential, commercial, mixed-use, etc.).
D. Property Types & Ownership Structures
Bungalow: A single-storey detached home, a common and popular property type across Canada.
Carriage Trade®: Royal LePage’s designation for the luxury residential real estate market.
Co-Ownership / Co-Op: Ownership structures where residents own shares in a corporation that owns the building, rather than owning individual units outright QC.
Condominium (Condo): A property type where individual units are privately owned while common areas are jointly owned and maintained through condo fees.
Condo Fees (Common Element Fees / Frais de copropriété): Monthly fees paid by condo owners to cover building maintenance, reserve funds, insurance, and shared amenities.
Detached Home: A standalone residential property with no shared walls.
Duplex / Triplex / Fourplex: Multi-unit residential buildings containing two, three, or four separate dwelling units.
Freehold Townhouse: A townhouse where the owner also owns the land beneath it, as opposed to a condo townhouse.
Leasehold: A form of ownership where the buyer owns the building but leases the land it sits on for a fixed term, common in some Western Canadian developments and First Nations land.
New Build / Pre-Construction: A property purchased before or during construction, typically directly from a developer.
Reserve Fund: Money set aside by a condo corporation for major future repairs and replacements, funded through condo fees.
Semi-Detached Home: A residential property sharing one common wall with a neighbouring unit.
Single Family Residence: A standalone home designed to house one family, without shared walls.
Stacked Townhouse: A multi-level townhouse-style unit stacked over or under another unit, often condo-titled.
E. Market, Valuation & Data Terms
Absorption Rate: The rate at which available homes are sold in a market over a given period, used to gauge market balance.
Assessed Value: The value assigned to a property by a municipal or provincial assessment authority for property tax purposes, which can differ from market value.
Average Sale Price: The mean sale price of homes sold in a given area and time period; sensitive to high- or low-end outliers.
Balanced Market: A market condition where supply and demand are roughly equal, typically resulting in stable prices.
Benchmark Price / HPI (Home Price Index): A standardized price measure that tracks the value of a “typical” home over time, less skewed by outliers than average price.
Buyer’s Market: A market condition where supply exceeds demand, generally giving buyers more negotiating power.
Days on Market (DOM): The number of days a listing remains active before it sells or is withdrawn.
List Price: The price at which a property is listed for sale, as distinct from the price it may ultimately sell for.
MLS® (Multiple Listing Service): The database system used by real estate boards across Canada to share property listings among licensed REALTORS®.
Median Sale Price: The middle value of all home sale prices in a given data set, less affected by outliers than the average.
Sale-to-List Ratio: The percentage relationship between a property’s final sale price and its original list price, used as a market temperature indicator.
Seller’s Market: A market condition where demand exceeds supply, generally favouring sellers with higher prices and faster sales.
F. People, Roles & Process Terms
Buyer’s Agent: A REALTOR® representing the buyer’s interests in a transaction.
Dual Agency / Multiple Representation: A situation where one brokerage (or in some cases one agent) represents both the buyer and seller in the same transaction, subject to provincial disclosure rules.
Listing Agent / Listing Brokerage: The REALTOR® or brokerage representing the seller and marketing the property.
Open House: A scheduled period during which a listed property is available for the public to view without an appointment.
REALTOR®: A trademarked term for a real estate professional who is a member of the Canadian Real Estate Association (CREA) and bound by its Code of Ethics — distinct from a general “real estate agent.”
Seller’s Agent: A REALTOR® representing the seller’s interests in a transaction.
Showing: A scheduled appointment for a potential buyer to view a listed property.
Have Questions About Your Next Move?
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