Real Estate is known for its unique phrases and terminology and at times it can be confusing, especially if you are a first-time buyer or seller. Here is the cheat sheet to help guide you through your home buying or selling journey!

CS: This means the property is conditionally sold. Someone has put an offer on the home and the offer is subject to conditions being met. Some common conditions are mortgage financing approval, home inspection and for a condo purchase, a review of the status certificate documents.

Right of First Refusal: This is an escape clause. An individual submits an offer, and it is conditional on the sale of their home by a certain date. Another party can still submit an offer on that same property and the original offering party has either 24, 48 or 72 hours to either remove their conditions entirely and agree to purchase the home or give up the home to the competing offer.

LA: Listing Agent

BA: Buyer Agent

Clean Offer: A clean offer is an offer without any conditions. This is attractive to a seller because there is no way for the buyer to back out of the offer. It is also an alternative way for the buyer to make a stronger offer instead of increasing the amount of money they are offering.

Firm: After a clean offer is received or a conditional offer has had all conditions removed/met/waived, the offer becomes firm.

On schedule A that is typically found on your APS (Agreement of Purchase and Sale) you will find conditions or clauses. Here is the difference between the two!

Conditions: You as the buyer have the right to have the right to walk away if you do not waive the conditions in your offer.

Clauses: You cannot walk away if a clause is not met by the buyer or seller. Examples may be: “The Seller agrees to provide the buyer with a survey if available.” Or “The Seller agrees that all chattels and fixtures will be in good working order upon possession”.

Irrevocable or Irrev: This means you cannot revoke your offer. As a buyer, you are giving a certain amount of time to the Seller to think about it and during that time you cannot rescind or revoke the offer.

Deposit: These are the funds that you give with your offer, and they are typically due 24 hours after acceptance, and they are held “in trust” by listing brokerage. If you walk away from the offer and the conditions were not fulfilled, you get your entire deposit back without penalty. If you have a firm offer and decide to walk away, then you don’t get the deposit back. There are other implications if you don’t close on the property as well such as being sued by the seller.

Down payment: This is the amount you will pay by closing date (this does not include your mortgage amount).

Rep remarks: These are the details shared amongst realtors on the MLS system. It is the minutia about the home. For example, who to contact for an offer, what the process is for making offers on this particular property or maybe certain details like the year the roof was replaced.

Public remarks: This is what shows up on realtor.ca and appears to the public. REALTORS® have a limited number of characters for the public remarks and at times include short forms or leave out lengthy details and include this information instead in the rep remarks.

When the bank is calculating how much they will lend you, they use GDS and TDS.

GDS: This means Gross Debt Service Ratio. This is how much are you spending on your house, interest, taxes and heat and it need to be under 39% of your total income.

TDS: This means total debt service ratio. This considers any other loans that you may have. This needs to be less than 44%.

Holding/Taking Offers: This means there is a set time for all interested parties to presents their offer at.

MLS: This means Multiple Listing Service. This system allows everyone to post their house for sale on a shared system. All the listings are in the same place and acts as a one stop shop for buyers.

Foreclosure: The bank is taking the home back from the homeowner.

DOM: This means “days on market” – how long the home has been on the market for on the MLS system.

CDM: This means “cumulative days on market” and is the sum of all days on market (even if the property was relisted or if they switched realtors). But, if the Seller kept the property off the market for 45 days then listed it again, that number would be reset to 0.

VTB: This means vendor take back mortgage. The owner of the home says that when they sell it to you, they would hold the mortgage or a part of the mortgage and you agree to pay it back just like a mortgage from a bank.

Special Assessments: This applies to condos. This is when they are required to take money from every unit owner to pay for an expense. This would be outside of regular condo payments.

Income Properties

GOI: This means gross operating income. This would be how much money the income property is making every year.

TOE: This is total operating expenses. How much is being paid every year in expenses. This does not include mortgage payments.

NOI: This means, net operating income. If you do the math, GOI – TOE = NOI. Use your NOI and purchase price to calculate the next one, which is cap rate.

Cap rate: This means capitalization rate. How much are you buying the property for and how much does it make every year before you pay your mortgage on it.

For more valuable real estate related tips, you can check out the REAL Collective Podcast on iTunes, Spotify or YouTube.