Common Real Estate Terms

ACRE - A measure of land equaling 43,560 square feet; 4,840 square yards; 160 square rods.

ADJACENT - Lying near to, but not necessarily abutting, the property.

ADJUSTMENTS - Refers to those terms requiring apportionment as of the date of closing.

AGENCY - A relationship created when one person, the "principal," delegates to another, the "agent," the right to act on the principal's behalf in business transactions and to exercise some degree of discretion while so acting. An agency gives rise to a fiduciary relationship and imposes on the agent, as the fiduciary of the principal, certain duties, obligations and high standards of good faith and loyalty.

Single - Agency - Either with the seller or buyer, is that relationship between the seller or buyer and an agent wherein the agent is considered in law to represent only the principal.

Dual - Agency - Occurs when the same agent has an agency relationship with more than one party to the same real estate transaction, and both parties must give their informed consent to this form of representation. The agent must advise the seller and the purchaser of the dual aspect of representation and must provide full and timely disclosure to all parties of all pertinent information.

Sub-Agency - That relationship whereby an individual is empowered by an agent to act on his/her behalf.

Undisclosed Dual Agency - This situation arises when a professional is found to be acting in an agency role for conflicting interests without prior understanding, approval and agreement of the parties.

AGREEMENT OF PURCHASE AND SALE - An agreement between the seller (seller) and buyer (purchaser) for the purchase of real property.

AMENDMENT TO AGREEMENT - Formalizes any mutual agreement between purchaser and seller that affects an original contract, and which is acceptable to both parties.

AMENITIES - Features, both tangible and intangible, which enhance and add to the desirability of real estate.

APPRAISAL - The process of estimating, fixing, or setting the market value of real property. An appraisal may take the form of a lengthy report, a completed form, a simple letter, or even an oral report.

APPRAISAL REPORT - A written summary estimating the value of property and the conditions and limitations at the time of the appraisal.

APPRECIATION - An increase in the worth or value of property due to economic or related causes, which may prove to be either temporary or permanent.

ASSESSMENT - A specific levy for a definite purpose, such as adding curbs or sewers in a neighborhood. Individual condominium owners are subject to special assessments benefiting the project as a whole and not funded through regular maintenance charges.

CONDITIONAL SALES CONTRACT - A contract, usually involving the sale of goods, in which the property remains in the seller's name until all installments set out in the contract have been paid by the buyer.

COUNTER-OFFER - An offer by a seller to sell the property, open for an acceptance for a specified period of time, and offered to particular purchasers.

COVENANT - An agreement contained in a deed, which creates a legal obligation. DUAL AGENCY - Representation of two principals (usually seller and buyer) by the same agent in the same transaction.

EASEMENT - A right enjoyed by one tenement over another tenement, usually granted for a specific purpose rather than for the general use and occupation of the land, and once granted attaches to the land and binds subsequent owners.

ESCROW - A written agreement between two or more parties providing that certain instruments of property be placed with a third party to be delivered to a designated person upon the fulfillment or performance of some act or condition.

HOLDOVER CLAUSE - A clause in a listing agreement that protects a real estate brokerage for a specific period of time of time after the listing agreement expires. It requires the payment of a commission fee when a buyer makes a private offer to purchase, after having been introduced to the property during the time the property was listed with the brokers.

LISTING AGREEMENT - A written agreement under which the owner appoints a real estate broker for a designated period of time to sell, lease or exchange the property based on the owner's stated terms, and under which the owner agrees to pay the broker a commission.

LISTING TYPES - There are three major listing types:

• Open Listing - These are usually written arrangements in which the owner gives one or more brokers authority to find a purchaser for the property.
• Exclusive Listing - Gives one broker the authority to offer the property for sale (lease, exchange, etc.) during a specified time period.
• MLS® Listing - A signed multiple listing form contains an authority from the seller permitting the broker to employ the services of cooperating brokers who are members of the real estate board or association. The responsibility regarding promotion, negotiations, and payment of commission to cooperating brokers is that of the listing agent.

MARKET VALUE - The highest price in terms of money, which the property will bring to a willing seller if exposed for sale on the open market; allowing a reasonable time to find a willing purchaser, buying with the knowledge of all the uses to which it is adapted and for which it can be legally used, and neither party acting under necessity, compulsion or peculiar and special circumstances.

MULTIPLE LISTING SERVICE ®(MLS®) - The trademarks known as MLS® Multiple Listing Service and the MLS® design marks are Certification Marks registered and owned by The Canadian Real Estate Association (CREA). These marks are protected throughout Canada for the exclusive use of members of CREA in connection with services defined as listing to affect the purchase and sale of real estate. The Certification Marks may only be used in association with listing services performed as part of a plural system arrangement and are performed by members in good standing of The Canadian Real Estate Association.

PROPERTY CONDITION DISCLOSURE STATEMENT - During the past several years, various jurisdictions throughout North America have introduced property disclosure forms. These forms provide buyers with a statement from the seller regarding the condition of the main structures and systems in a house. The questions posed on any Seller Property Information Statement, or any similar document, should be carefully reviewed with the seller, completed and signed by the seller. It is important to note the completion of this form by the seller does not relieve the listing broker from those obligations that he/she would otherwise have with respect to ascertaining the condition on the form should be used to assist in meeting those obligations. It also does not relieve the buyer from carrying out their own due diligence.

REFERRAL - a term commonly used in real estate brokerage referring to the act of a licensed salesperson or broker recommending or otherwise communicating a prospective buyer or seller to another licensed salesperson or broker operating within or beyond the referring salesperson's licensing jurisdiction, geographic area, or specific field of professional expertise.

RESTRICTIVE COVENANT - A limitation placed upon the use of property contained in the deed or other written instrument in the chain of title. More specifically, a restrictive covenant is a contract between two landowners, by which the person obtaining the promise (the covenantee) acquires the right to restrain the covenantor from putting the land to certain specific uses. Such contracts between landowners run with the land.

RIGHT-OF-WAY - The right to travel over another's land, more or less frequently, according to the nature of the easement.

WAIVER OF CONDITION - The relinquishment of some right as set out in a condition within an Agreement.

ZONING - The regulation of structures and uses of property within designated districts or zones. Zoning regulates and affects such things as use of the land, types of structure permitted, building heights, setbacks, and density (the ratio of land area to improvement area).