Real estate, much like any other professional field, tends to have a number of terms that can be difficult to comprehend when you’re not forced to deal with them on a day-to-day basis.
Here are a few of the more common ones that I’ve received inquiries on recently. Hopefully you’ll feel just a little more comfortable with the jargon out there.
Misrepresentation
This one can be tricky. It usually comes up when the buyer finds out that what he thought was promised by the seller, wasn’t. I recently received an email from a gentleman who was promised a tandem parking spot but when the deal closed the space was a regular single, in a poor location no less. Can anything be done? Well, depending on the wording in the contract and any amendments that were signed, recourse may or may not be sought. The point is that there was certainly misrepresentation during the listing period. However, and unfortunately for the buyer in this case, if an amendment was signed correcting the matter, albeit not to the understanding of the buyer, the misrepresentation did not technically carry over to the closing period.
Closing Costs
Those additional costs that accompany the purchase price of the property. For the seller these costs will include commissions and legal fees. For the buyer, in addition to legal fees, these costs will include property taxes. There are additional, more detailed costs but for general purposes the total closing costs can be considered at approximately 1.5 per cent to 1.75 per cent of the purchase price.
Square Footage
Ever wonder why 2,500 square feet just doesn’t seem as large as it use to? That’s because square footage has recently begun to be measured much less precisely than it had in the past. Twenty years ago, square footage took into account actual living space (i.e. not counting the space that walls took up), today square footages often are taken by a simple measurement of the length times the width of the “box.” Only above grade, of course, indoor living space is accurately included.
Flipping
Most routinely refers to the act of purchasing a brand new development and then selling it off to a second buyer prior to your own closing. While the technicalities of this process deserve an entire article unto themselves, suffice it to say that even in today’s correction market investors continue to keep their eyes peeled for that next “blue-chip” real estate flipper investment. However, as a potential flipper, it’s important to understand all the expenses and costs associated with this practice. No investment is easy nor guaranteed. With the upcoming release of Tridel’s Hullmark Centre, for example, it’s important that all investors understand the full details of the project and what the realistic projections, as well as costs, may be.
Legal Basement Apartments
Believe it or not, four out of five rented basement apartments in our fair city will not meet fire code standards for an actual dwelling. If you ever read or hear “no guarantee of retrofit status,” they’re essentially telling you that the legality of the basement apartment is not guaranteed. So what can the repercussions be? Let me put it this way. Brampton, arguably the ring leader when it comes to basement apartments, currently is somewhat safe from serious inquiry into the matter, simply because the number of rental units in the city are at a minimum. In other words, depending on the circumstances within the region, this type of dwelling may or may not be cause for immediate serious concern.
Hopefully this helps to shed some light. As always, I look forward to any questions. Feel free to email me at amitp@rogers.com.
