There are plenty of terms that get tossed around when real estate jargon is the flavour of the day. Here is a little insight into some terms you might hear from your neighbour, your friend, your realtor or your lawyer.
Market Value Often one of the most debatable terms, the discussion of market value has often caused a rift between many, usually because the parties can’t agree on what the market value of a given property actually is. In simplest terms, market value is said to be the factual and calculated price of a given property. This figure is attained by an assessment of the property and a comparison to similar properties that have either sold or are currently on the market. How well you assign this value can ultimately determine how well your home sells, or how sound a decision you make, when you buy. It is not a subjective term.
Rent While I’m sure just about everyone knows what the term rent means, not everyone is sure on the importance of tracking it when playing the role of a landlord. Imagine if Jack was renting his downtown condo to his friend Jill and one day Jill decided that falling down the hill with Jack wasn’t as fun as it used to be. Jill might have even been a few months late in rent payments and caused a little damage to Jack’s condo. If Jill decides to up and leave, without any actual trace or paper trail proving that she was a formal tenant in the condo, Jack has absolutely zero recourse to go after lost rent or damages. It really is the best thing in the world to rent to a friend, but you have the right to know exactly what you’re getting yourself into.
Income Property In residential real estate this term will refer to a property that was bought for the purpose of being rented out — thus generating an income for the owner as the result of the incoming rent. While just as common as they were a few years back, because buying an actual property has become increasingly easier and property prices have increased, actually breaking even on your mortgage through your incoming rent has become increasingly rare. Having said that, many still make sound profits through residential income properties.
Exclusive Listing On the most basic level, it simply means that the sole and exclusive right to market, negotiate and sell the property in question is given to a particular brokerage. The actual legal ramifications and responsibilities that come with such a distinction are something that go beyond the scope of this particular article. Yes, all MLS listings are exclusive listings, but not vice versa.
OREA Forms OREA stands for the Ontario Real Estate Association. When it comes to residential real estate 99.9 per cent of transactions take place on standard OREA forms/contracts. Can you rest assured that the fine print on those forms with the OREA logo contain nothing drastic? Yes. Have there been cases in the past where the standard form has been manipulated and then edited to look like the original? Yes. So while OREA concerns itself very much with the security of the consumer, you should always concern yourself with your own security as well.
Hopefully, some of these terms have cleared up some lingering confusions, or perhaps shed some light on a new topic. If you have any terms or phrases that you’d like clarification on, I’m always reachable.
Happy hunting!
