Finding a property that ticks all your boxes is no easy feat — especially when real estate lingo can be so confusing.
Figuring out what exactly a mortgage is, all the different kinds of offers you can make or what fractional ownership means is a little stressful. But you can stick around to find out.
And you're not alone, 56% of Narcity Canada readers who responded to a recent poll admit to finding real estate jargon confusing.
The real estate agents with RE/MAX get it. As experts in the buying and selling process, they're fluent in property speak. Along with RE/MAX's huge bank of online resources, they can help you feel more confident throwing around terms like "equity" and "appraisal."
In the spirit of learning, here's a roundup of eight concepts that folks often hear but might be too embarrassed to google.
Deposit Vs Down Payment
Do you know the difference between a deposit and a down payment? When RE/MAX hit the streets to ask folks the same question, most people were stumped.
You'll hear both terms when someone is serious about a property, although at different times during the buying process.
A deposit is submitted with your offer to assure the seller that you're interested in the property. There's no set amount for this, and it's only paid once the offer is accepted.
A down payment, meanwhile, is a percentage of the total price of the home and is paid to your lender to secure your mortgage.
So what happens to your deposit? It goes toward your down payment.
Mortgage
A mortgage is a loan used to purchase or maintain a home, land or other types of real estate. Arguably the most intimidating real estate word, a mortgage is just another stepping stone to owning your dream home.
Buyers might also consider mortgage pre-approval, which helps them know how much money they can borrow right away.
Co-Ownership Vs Fractional Ownership
Co-ownership allows people to split the ownership and expenses of a property.
This term is used when people are looking to join forces and buy some real estate, like a couple looking to live together or business partners wanting to share the investment.
Fractional ownership is a little different. With it, an individual owns a portion of a property and is also entitled to a percentage of time there (sort of like a time-share).
Clean Offer
Sellers love a clean offer. It's made on a home and is basically free of conditions.
An offer can be conditional (versus clean) based on a variety of reasons, but it's usually related to financing, repairs or a preferred closing date. If those conditions aren't met, the buyer is free to cancel their offer.
On the other hand, a clean offer means a buyer is ready to seal the deal.
To learn more about other types of offers, you can check out RE/MAX's Homeseller's Glossary.
Equity
If you have a mortgage, you could be talking about equity for a long time. After all, it refers to the portion of the home that's been paid for and is actually owned by the homeowner.
In other words, equity is the difference between a home's value on the market and the amount still left on the mortgage.
20-Minute Neighbourhoods
A 20-minute neighbourhood is one where everything you need (say, grocery stores, childcare or a hospital) is within 20 minutes from home.
If you're familiar with what people look for in a property, you might know this term. It's all about convenience, which is a huge selling point!
You can see how people responded when quizzed on this concept in RE/MAX's video above.
Home Appraisal
Sellers looking to understand what their home is worth might be aware of this term.
A home appraisal is an assessment completed by a qualified professional who can determine a home's market value. It's based on key factors such as property size, location, construction materials, renovations and curb appeal.
Appraising a home is also required for the mortgage process because it allows financing companies to verify a mortgaged property's value.
Bully Offer
A bully offer is generally a strong offer that's quick to expire, so sellers are more motivated to consider it. It also comes in before the offer date.
This term might pop up during the offer stage when someone adores a home — and doesn't want anyone else to snag it first.
There’s no need to feel awkward if the world of real estate isn't your forte. After all, almost 40% of Narcity Canada readers who responded to a recent poll believe that it's okay to use a bathroom during a property showing. Guess they're feeling right at home already?
With these definitions to back you up, you don't have to fake it 'til you make it the next time a conversation heads towards property stuff.
And if you're looking to feel even more confident when buying or selling, consider working with a RE/MAX real estate agent.
To learn more about RE/MAX, check out their website or follow them on Facebook, Instagram, Twitter or YouTube.