Real Estate Terms & Definitions

Buying a home can be an overwhelming process, and real estate jargon can complicate things even further.  Below, you'll find a glossary of common real estate terms and definitions, so you can feel confident in all aspects of your home search.


Active Listing
A listing that has an "active" status means that the property is available for purchase, and the seller is taking offers. Active listings are typically the most common in your local MLS®.
The time in which a loan balance decreases to zero when payments are regularly made. Typically, amortization periods are 15, 20, or 25 years long.
The valuation of a property or home, as estimated by a designated and authorized person.
Building Permit
Authorization by a municipality for a building to be constructed or repaired. A certificate must be obtained by the property owner or contractor before any construction can legally take place, and it must be visibly posted until the job is complete and approved by a building inspector.
Buyer's Market
When the number of homes for sale is higher than the number of buyers. Buyers have more choice, and home prices are typically lower. In a buyer's market, buyers often have more negotiating power during a purchase.
Closed Mortgage
A mortgage loan with a set payment schedule that doesn't vary over the life of the term, and can't be paid out early without a penalty. Closed mortgages typically have lower interest rates than open mortgages, and can last from 6 months to ten years,
Closing Costs
Fees incurred by either the buyer or seller at the closing of a home purchase, over the price of the property. Closing costs may include legal fees, title insurance, taxes, and title insurance.
Closing Date
The date when the ownership of a property is transferred from the seller to the buyer and the sale becomes final.
Days On Market
The number of days that a particular real estate listing is on the market (for sale). Days on market is abbreviated as DOM on property listings, and can be useful in determining whether the home is priced properly, and help buyers decide on offering prices.
A failure to meet the requirements as set out by the mortgage loan agreement and make mortgage payments. Defaulting on a loan can give the mortgage holder reason to take legal action to foreclose the property.
A sum of money placed in trust by the buyer to show good faith when an Offer to Purchase is made. Until the sale is closed, the lawyer or real estate representative will hold the sum. Once the sale is closed, the seller receives the deposit.
Down Payment
The amount, often stated as a percentage, that a buyer must pay up front for a house before they are able to secure a mortgage. A down payment usually ranges from 5% to 25% of the price of the home.
The legal process in which the lender can take possession of the property when the homeowner is unable to pay full principal and interest payments on a mortgage. The lender can then evict the homeowner and sell the house.
The charge for borrowing money for a specific period of time. Interest is typically paid to the lender at a particular rate in installments, in addition to the repayment of the principal amount.
Interest Rate
The rate that the borrower pays interest to the lender. For example, if the mortgage balance is $100,000, and the interest rate is 5 percent, an annual payment will include $5,000 interest.
A loan to finance the purchase of real estate. The purchaser agrees to repay the loan, pledging the property as security for the loan.
Offer to Purchase
A written contract from the buyer, setting out the terms for purchase. If the seller accepts the offer, the contract becomes legally binding.
Pending Listing
A home that has a purchase contract, but hasn't been sold yet, usually because certain conditions have yet to be met. Sellers may accept backup offers on pending listings.
Pre-Approved Mortgage
When a lender has evaluated a potential borrower's credit and made a commitment to provide a loan up to a certain amount. Pre-approval allows buyers to look for homes they already know they can get financing for, rather than shop for homes that might be too expensive.
The amount of money that was borrowed or is still owed on a loan, not including the interest.
Real estate professionals who are members of the Canadian Real Estate Association (CREA). REALTOR® is a trademark and only applies to these members.
Seller's Market
When the number of buyers outnumbers the available homes for sale. Home prices typically rise, and properties sell quickly in a seller's market.
Short Sale
When the sale of a property generates less process than the amount owed on the property. Short sales occur when both the lender and the borrower agree that selling the property at a moderate loss is better than the buyer defaulting on the loan. Short sales are an alternative to foreclosure.
Strata or Condominium Fee
A fee paid by condominium or townhouse owners. This payment goes toward payment of expenses including repairs, management costs, and maintnance.
Title (freehold or leasehold)
Title refers to the legal ownership of a property. With a freehold title, the holder has ownership of the property for an indefinite time period. A leasehold title allows the holder the right to use and occupy the property for a pre-defined period of time, but actual ownership remains with the landlord.
Zoning Bylaws
Regional or municipal laws that outline or restrict land use.

Contact us for professional real estate advice! Our agents are experts on the Edmonton real estate market and can assist you with the paperwork and real estate terminolgy that comes with buying and selling a home.