Buying Info
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Buying Info

Common Buying Terms

 

ALR – Agricultural Land Reserve
A provincial zone in which agriculture is recognized as the priority use, farming is encouraged and non-agricultural uses are controlled.

Amortization
The number of years a borrower is scheduled to repay the entire amount of a mortgage.

Applied Practice Course
See either Residential Trading Services Applied Practice Course or Commercial Trading Services Applied Practice Course.

Appraisal
An estimate of a property’s market value, used by lenders in determining the amount of a mortgage.

Appreciation
The increase of a property’s value over time.

Assessment
The value of a property, set by the local municipality, for the purposes of calculating property tax.

Associate Broker
An individual that holds a broker license and chooses to associate or affiliate with another sponsoring broker rather than opening their own brokerage office.

Balanced Market
A market in which the sales to active listings ratio is in a range of 14 to 20 per cent. In general, a balanced market results in home prices remaining relatively stable.

Bank of Canada Overnight Target Rate
The target level interest rate set by the Bank of Canada at which major financial institutions borrow and lend one-day (or “overnight”) funds among themselves.

Basis Point
A unit equal to 1/100 of one per cent used to denote changes in bond yields and other interest rates. For example, a 25 basis point change in the Bank of Canada’s target overnight rate refers to an increase of 0.25 per cent.

Benchmark Property or Home Price
A property or home price against which other properties can be evaluated.

Bond Yield
The percentage return that an investor can expect to earn from a bond issue over the maturity of the bond.

Brokerage
A real estate company under which an individual is licensed.

Buyer’s Market
When there is a higher number of homes to choose from than buyers in comparison. Prices of homes tend to be lower and they remain available for sale longer. Buyers usually have more leverage in negotiating a purchase.

Capitalization (“Cap”) Rate
The ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.

Carrying Cost
Financial and operational expense associated with an investment.

Closing Costs
Expenses in addition to the purchase price for buying and selling a property.

Commercial Leading Indicator (CLI)
A measurement designed by BCREA to forecast changes in broad commercial real estate activity. For more information, click here.

Commercial Trading Services Applied Practice Course
The compulsory course, administered by BCREA, for new licensees who plan to practice primarily in commercial real estate which forms part of the BC’s real estate licensing process. For more information, click here.

Condominium
Shared ownership in property. Owners have title (ownership) to individual units and a proportionate share in the common elements.

Consumer Price Index (CPI)
A measure that examines the weighted average of prices of consumer goods and services, such as transportation, food and medical care, calculated by averaging price changes for each item.

CPE – continuing professional education
BCREA’s education program developed for BC REALTORS® which includes more than 30 courses on a wide variety of topics including agency, law, commercial, property management, technology, office management and ethics.

Conventional Mortgage
A mortgage loan that does not exceed 80 per cent of the lending value of the property.

Core Inflation
A measure of inflation that excludes products that face volatile price movements or that can have temporary price shocks which can diverge from the overall trend of inflation and give a false measure of inflation.

Counter Offer
One party’s written response to the other party’s offer during negotiation of a real estate purchase between buyer and seller.

CREA – Canadian Real Estate Association
The Canadian association that represents more than 100,000 real estate brokers/agents and salespeople working through more than 100 real estate boards and associations across Canada.

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