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Louise Cossette

Courtier immobilier (514) 235-6888

Office : (450) 227-2611

Fax : (450) 227-2358

Royal LePage HUMANIA

204 Rue Principale

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Why a broker?

The purchase or sale of a property requires a great deal of technical knowledge. One must manage significant transactional, financial and legal aspects, in addition to knowing how to negotiate effectively. This presents ...
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Glossary

Act of sale

A contract, usually drawn up by a notary, used to officialize the sale of an immovable to a buyer.

Agents

Individual, partnership, or corporation holding a practising certificate issued by the Organisme d'autoréglementation des courtiers immobiliers du Québec, authorized to engage in brokerage operations on behalf of others for the purchase, sale, lease, or exchange of immovable property for a fee. An agent may employ other real estate brokers to represent the agent. By law, an agent is fully responsible for professional actions taken by the people representing the agent.

Amortization

Period required to pay back a mortgage loan in full through regular payments. The amortization is usually based on fixed terms of 10, 15, 20, or 25 years.

Brokerage contract

Agreement under which a person authorizes a real estate broker to act for a given period of time, as intermediary in the purchase, sale, rental, or exchange of immovable property. The brokerage contract officializes the rights and obligations of the broker and the client by mutual consent.

In an exclusive brokerage contract, the client may not use the services of a broker other than with whom the client entered into the contract for the duration of the contract. Similarly, the exclusive brokerage contract usually stipulates that the client can not carry out the sale or purchase of the property on their own.

Building inspection

General verification of the state of the main components of an immovable (foundation, structure, roof, heating system, electrical system, etc.) to assess condition.

Cadastral designation

Information concerning an immovable (location, area, value, etc.), contained in the cadastre for a given region.

Cadastre

Public register containing the technical data on each immovable in a given region (lot). A lot number used to publish the applicable rights is assigned to each property indexed in the cadastre.

Cancellation

Cancellation of the registration of a right, through which one is released from certain obligations, subject to certain conditions. Cancellation of a mortgage.

Certificate of location

Document containing a report and a plan, in which the land surveyor expresses an opinion on the location and condition of an immovable compared to the titles and the cadastre as well as laws and regulations governing the immovable.

Certificate of practise

Operating permit issued by the Organisme d'autoréglementation des courtiers immobiliers du Québec to any natural person, partnership, or legal person who meets the legal requirements to carry out real estate brokerage activities in Québec. The granting of a certificate by the Organisme d'autoréglementation des courtiers immobiliers du Québec is conditional to the successful completion of a series of specialized real estate brokerage courses and an entrance examination to the profession.

Charge

Amount to be paid according to a pre-set deadline. Tax payable on the use of a public utility, for example.

Conditional Offer

An offer to purchase that is subject to specified conditions, for example, a mortgage loan approval. There is usually a stipulated time limit within which the specified conditions must be met.

Co-ownership

Immovable in which the ownership is divided between several owners. Right of ownership shared between several persons concerning a single property or a group of properties. Co-ownership is undivided when the right of ownership is not accompanied by a material division of the property. Co-ownership is divided when the right of ownership is divided between the co-owners in fractions (lots) each containing a unit, materially divided, and a portion of the common area.

Co-ownership fees

Expenses related to the maintenance and management of the common areas of a co-ownership property. Monthly payment, usually fixed, used to set up a fund to pay for current and unforeseen expenses (repairs, equipment replacement, etc.).

Counter-proposal

A proposal presented in reply to a promise to purchase or to another counter-proposal and which in itself constitutes a new Promise.

Note: The first purpose of the counter-proposal is to signify refusal of a proposal by the other party to the transaction.

Deposit

A sum of money that accompanies a promise to purchase an immovable. The deposit must be placed in a trust account and will be deducted from the balance payable at the signing of the act of sale, or it will be returned to the proposer if the sale does not go through.

Description sheet

Document on which a real estate broker or agent has presented the features (construction year, taxes, measurements, etc.) of an immovable covered by a real estate brokerage contract.

Down payment

Personal contribution of the buyer to the financing of an immovable. Cash portion deducted from the selling price, which determines the amount of financing required to complete the purchase.

Easement

Restriction of the right of ownership for reasons of private interest, general interest, or public use. Right of access or use of land by others, for a defined purpose (passage, parking, public utilities, etc.).

Equity

The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the mortgage is reduced through regular payments. Market values and improvements to the property may also affect equity.

Evaluation

Process which consists in estimating the market value of an immovable based on the general condition of its components and its specific features. The evaluation is often the result of a comparison with similar immovables up for sale or having recently been sold in the same area.

Financing

Means used by a buyer to acquire an immovable. Financial resource, often in the form of a mortgage loan, provided to the buyer by a financial institution for the purchase of an immovable.

Fonds d’indemnisation du courtage immobilier

Body created under the Real Estate Brokerage Act, to which all real estate brokers and agents in Québec contribute to indemnify consumers who are victims of fraud, dishonest transaction, or misappropriation of funds or other goods by a real estate broker or agent, which, under the Real Estate Brokerage Act, must be deposited in a trust account.

Indirect costs

Additional expenses to be paid when buying an immovable, including building inspection, property evaluation, loan application, notary fees, taxes, insurance, etc.

Interest

The cost of borrowing money. Interest is usually paid to the lender in regular payments along with repayment of the principal (loan amount).

Interest rate

Percentage representing the amount of interest produced by an amount of one hundred dollars. A 6.5% interest rate will produce an interest amount of $6.50 payable to the lender for every $100 borrowed. The interest rate is used to calculate the amount to be paid to the lender in exchange for financing to allow the buyer to purchase an immovable.

Mortgage

Real right granted to a creditor on an immovable as collateral for a debt. This right gives the creditor, in case the repayment terms are not respected by the borrower, the option to exercise certain remedies such as taking the immovable in payment or selling it in a judicial sale.

Mortgage life insurance

Mortgage life insurance gives coverage for your family, if you die before your mortgage is paid off. This kind of insurance can be obtained from your lender and the premiums added to your mortgage payments.

Mortgage loan

Method of financing in which the immovable is used as collateral for debt repayment.

Mortgage loan insurance

Insurance taken out by the buyer of an immovable in order to guarantee the payment of the monthly instalments required to reimburse a mortgage loan in full.

Mortgage payment

A regular payment to the lender that includes both the interest and the principal.

Net proceeds from the sale

Residual amount deriving from the sale of an immovable once all selling expenses have been deducted, i.e., mortgage loan balance, broker compensation, legal fees, tax adjustments, etc.

Net worth

Your financial worth, calculated by subtracting your total liabilities from your total assets.

Offer to purchase

A written contract setting out the terms under which the buyer agrees to buy the home. If the offer to purchase is accepted by the seller, it forms a legally binding contract that binds the people who signed to certain terms and conditions.

Organisme d'autoréglementation des courtiers immobiliers du Québec (OACIQ)

Organization created by the Real Estate Brokerage Act whose main mission is to protect the public by supervising the practise of all real estate professionals practising in Quebec.

Principal

The amount that you borrow for a loan. Each monthly mortgage payment consists of a portion of the principal that must be repaid plus the interest that the lender is charging you on the outstanding loan balance. During the early years of your mortgage, the interest portion is usually larger than the principal portion.

Professional liability insurance

Professional liability insurance is taken out by real estate brokers to protect themselves against the financial consequences of any fault, error, negligence or omission which their representatives or themselves could be responsible for in the course of their activities.

Promise to purchase

Undertaking by a person to purchase an immovable under certain conditions set by that person. Contract through which the seller agrees to sell the immovable once he or she has accepted the promise to purchase.

Property insurance

Insurance that you buy for the building(s) on the land you own. This insurance should be high enough to pay for the building to be re-built if it is destroyed by fire or other hazards listed in the policy.

Property taxes

Taxes charged by the municipality where the home is located based on the value of the home. In some cases the lender will collect a monthly amount to cover your property taxes, which is then paid by the lender to the municipality on your behalf.

Real estate broker

Natural person who holds a certificate of practise issued by the Organisme d'autoréglementation des courtiers immobiliers du Québec and authorizing them to carry out brokerage transactions on behalf of others for the purchase, sale, rental, or exchange of immovable properties.

Real estate brokerage

The professional activity of real estate brokers and agents. Brokerage transactions and professional acts carried out by real estate brokers and agents concerning the purchase, sale, rental, or exchange of immovable properties. Profession which can only be practised by holders of a certificate issued by the Organisme d'autoréglementation des courtiers immobiliers du Québec.

Right of ownership

Recognition which gives the owner of a property the right to use, enjoy, and freely and fully dispose of the property, to the extent of the limits and conditions imposed by law.

Right of withdrawal

Privilege which a natural person has to withdraw a real estate brokerage contract for the sale of the immovable within three days following receipt of the contract duplicate signed by both parties, unless there is a written waiver. After this period, if the contract is marked “irrevocable”, it cannot be cancelled under any circumstance nor can the term be changed unless the broker or agent agrees.

Note: The right of withdrawal applies when the contract involves a chiefly residential immovable containing less than five dwellings.

Selling expenses

Additional expenses to be paid when selling an immovable, including mortgage loan balance, real estate broker compensation, notary, tax adjustments, etc.

Take-over agreement

Legal document signed by the buyer of a property in which the latter agrees to assume the responsibility of a mortgage loan contracted by the builder or by the original owner.

Title insurance

Insurance against loss or damage caused by a matter affecting the title to immovable property, in particular by a defect in the title or by the existence of a lien, encumbrance, or easement.

Transfer duties (Welcome tax)

Tax imposed by a municipality on any transfer of right of ownership on its territory.

Trust account

Deposit account at a financial institution in which a real estate broker can deposit the amounts entrusted to him or her in the course of a real estate transaction. When presenting a promise to purchase, the buyer often gives the listing broker a deposit on the purchase of the immovable. This deposit must be placed in a trust account.

Glossary definitions adopted from: Buyer Practical Guide (Association des courtiers et agents immobiliers du Québec) and Homebuying Step by Step (CMHC)