Welcome to the Suburban Dictionary: Sellers’ Edition. To make sense of it all, we enlisted the help of top agent Hasan Juma, Personal Real Estate Corporation, Oakwyn Realty Ltd.
As-is condition.
Definition: A property being sold in its current condition with no renovations or repairs to be done by the seller before the buyer acquires it. This may have implications for the quality of workmanship, the structure itself or the foundation, so it is important to include a subject to inspection clause if you’re considering purchasing this kind of property.
Hasan: When a seller is selling in “as-is condition,” they're saying that you can go ahead and do an inspection on the property, you can discover things about it, but we're not going to do anything about it if you find these sorts of items. So in real estate it's always buyer beware but when it's “as-is condition,” it's even more so.
Fixtures and chattels.
Definition: Once the buyer and seller sign the contract and agree to all terms and conditions, a legally binding contract has been formed. After this point, you must carry out all of your obligations and so must the buyer. The contract may include subject conditions, such as financing or inspection, so you still may not end up moving forward if these subject conditions are not met.
Hasan: Offer acceptance very much like what it sounds. This is when both a seller and a buyer agree to the terms and conditions of the contract fully.
Subject removal date.
Definition: The end of the time period where a buyer can remove subjects from their offer. If there are any subjects outstanding on this date, the buyer can either choose to remove them as-is or collapse the deal. Usually, subject removal periods are seven days long, but this can vary. After this point, if all subjects have been removed, the deal becomes firm.
Hasan: Very often when you're accepting an offer as a seller, the buyer is going to have a set of subjects or conditions that they need to fulfill before they fully say that they're going to move forward with your property. And so we call these, again, subjects or conditions, and there'll be a date where these conditions need to be met or satisfied by.
When you do get the subject removal, that is essentially, as a seller, the first time you can celebrate. That's when you might pop a glass of champagne. Very often that subject removal is presented with a bank draft deposit. Once you get the subject removal you are then sold; you can move forward towards completion.
Title transfer.
Definition: When both the buyer(s) and seller(s) complete a transaction of real estate, a title transfer takes place. At this point, the purchase agreement has been signed, the agreed amounts have been paid and the change of possession occurs. Once someone has a property title, they are the legal owner of that property. The property title must be registered with BC Land Title & Survey.
Hasan: In order to explain what title transfer is I’ve got to explain what title is. The title of a property is basically the legal deed of the property. It's a document that basically outlines you as the seller or you as the owner. When we do a title transfer, that essentially happens when you're selling the property. The title transfer is transferring from you as a seller over to the buyer.
Mortgage discharge.
Definition: A mortgage discharge is when a lender gives up their legal claim over a property after the mortgage has been fulfilled or the property sells. It is required when selling a property so that the buyer can be transferred a clear title. If there is an outstanding balance on the mortgage, the seller’s lawyer will have to provide an undertaking (a promise between lawyers that must be honoured) to the buyer’s lawyer to pay out and discharge the mortgage. When the buyer pays the purchase price, the money gets held in a trust and used to repay the seller’s mortgage, whose lender then signs the mortgage discharge document. Any remaining proceeds are then transferred to the seller. You (the seller) may have to pay a mortgage discharge fee to your lender as well.
Hasan: What this means is that the mortgage gets discharged or it gets paid off at the time that you sell the property and then, that title that we just spoke about, that title then gets transferred to the buyer without having a financial charge on it.
Buyer’s agent.
Definition: A real estate agent who works with buyers. A buyer’s agent helps find properties that meet a buyer’s needs, helps handle negotiations and documents and works with buyers to secure financing. They are paid as part of the commissions paid out when a home is purchased.
Hasan: A buyer's agent is the person who is representing the buyer in a transaction and so typically you will have a buyer's agent, you will have a listing agent as well.
The buyer's agent has a very unique skill set versus maybe a listing agent. So a buyer's agent is always out there hunting for deals. They have to be really well-versed, I would say, in the due diligence process. They need to be really, really well-versed on the stats and where the market is. And so when you're purchasing a property and you're working with a buyer's agent, you really want them to know what's happening in the market.
Seller's agent.
Definition: A real estate agent who works with sellers. They help price and market a property and attract prospective buyers. They also help sellers with paperwork and the negotiation process. Commonly called a listing agent.
Hasan: We refer to that more commonly as a “listing agent.” So this is someone that you would hire to list and sell your home. So a listing agent, they are marketers. Their whole job is to basically take your property, position it in its best possible light and get it out to the most people.
Real estate agent commission.
Definition: The commission fees paid to the buyer’s and seller’s agents involved in a transaction. By law, real estate associations cannot set a specific commission level. The commission fees are based on the sale price of a property. In BC, it is usually a two-tier commission setup of around 3% to 4% of the first $100,000 or so of a property’s sale price plus 1% to 2% of the remaining portion. But, these commission fees are negotiable.
Hasan: How the commission works here in BC is… there's no set commission and in fact it's against competition rules to be able to set commission. Everyone charges differently but I find most agents are charging very similarly and so generally what you'll find in BC or at least in the Vancouver area is a commission somewhere in the three percent range total. Again some are charging less, some are charging more. As a seller it's important to know that commission is always negotiable.
Listing agreement.
Definition: As part of the selling process, a listing agreement is a signed contract between you and the brokerage you’re working with to sell your property. It states that you agree to work exclusively with that brokerage for a time period to sell your home. The brokerage is legally obliged to act in your best interest. This document includes the commission rate as well.
Hasan: The listing agreement. This is between the seller and the listing agent's brokerage. So for example I'm with Open Realty, so if you were to list with me, you'd be making an agreement between yourself and Open Realty with me as the designated agent. And within the listing agreement, this is where we lay out what is going to be the listing price. How long are we going to be listed for? What sort of services am I going to provide to you as your listing agent? So all of this is dictated in the listing agreement, signed off on by all parties, and once we have it signed off on, that's when we move forward marketing the property.
Open house.
Definition: A day and time period when a property is available for viewing by interested Homeseekers with no appointment required. During this time, people can walk through your property regardless of their buying timeline and with no buyer’s agent present.
Hasan: Open house, probably one of the most common terms you're going to hear as someone who's selling your home. An open house is exactly what you might think it is. It's an opportunity for buyers to come into your home and view the property without having a buyer's agent present.
Subject to sale.
Definition: A subject removal clause stating that a potential buyer only agrees to purchase another property if they can sell their current property beforehand.
Hasan: Subject to sale is an interesting subject. When the buyer writes with a subject to sale, they're saying I do want to purchase your home, but I need to sell my home first So, they'll write subject to sale and they'll say, “give me two months or three months to sell my home and only then can I move forward on yours.” Subject to sale doesn't necessarily mean you're locked in to this agreement. So, if another offer comes along, you know, you can put yourself in a position where you can still accept that other offer, but it's all about how that subject to sale term is written and so that's why it's really important to work with an agent that understands all of the subjects and make sure that, if you do accept a subject to sale, you're not hindering your chance at getting another offer coming through as well.
Exclusive listing.
Definition: A real estate listing that is not listed on the MLS and is instead is exclusively held by one real estate agent or brokerage. They must in turn market the home to personal clients and other parties aside from the MLS.
Hasan: The most simple way to explain what an exclusive listing is is it's the opposite of what we call an MLS listing. An MLS listing is a public listing, so that essentially gets put onto the MLS, gets marketed fully and publicly, everybody's going to know that you're on the market if you are on the MLS. Now an exclusive listing stays off of the MLS and so you're signing with a listing agent that's going to market your property in every other way aside from the MLS.
Multiple offers.
Definition: A situation in which multiple potential buyers make offers on a property. In BC, this scenario must be disclosed using a Disclosure of Multiple Offers Presented Form that the seller and their agent(s) complete and present to everyone who made an offer on the property. This document doesn’t include the prices of the offers received nor any conditions that were part of the offers.
Hasan: Alright, multiple offers exactly what you might think it is. So multiple offers when you list your home as a seller; this is when you get more than one offer at the same time.
Offer presentation.
Definition: A set date and time by which an agent or brokerage will accept offers on a property. Any offers submitted after this date will not be considered.
Hasan: This is an interesting one because us as realtors, we throw this term around all the time. We're talking about offer presentations all the time. Technically what an offer presentation is is when we set in advance a date and time that buyers need to submit their offers by.
Appraisal.
Definition: A calculation of a property’s market value, based on its characteristics, the properties nearby and the forces of the market itself. Often done by a bank to ensure a borrower is requesting a reasonable mortgage for a property they are interested in or requested by a seller from a professional appraiser to price their home as part of the selling process.
Hasan: Appraisal is basically getting a market value assessment done of your property, generally not by a realtor. It's usually done by an appraiser, an appraisal company, or by a bank.
Suburban Dictionary: Seller’s Edition
Selling a home and stumped by all the jargon? Suburban Dictionary: Seller’s Edition is here to help.
