Real Estate Lingo Video with Jody Miller – Royal Lepage Kelowna

Hey, thanks for watching our video today. We’re going to talk about real estate lingo. Just words, terms that realtors might use, take for granted that you should know them, but why would you know them? They’re just crazy words that you probably come across once in a while out and maybe in a real estate, they have a little bit different meaning than what they would have day to day when you’re using them.

So, when it comes to buying a home, there’s a lot of words, lingo, just words you’re not going to hear normally, or maybe you’ve heard them, but they don’t apply really to like day to day your life, but they apply to real estate. So, how do they apply to real estate? What do they mean? Words such as subjects, deposits, completion date, possession date, what does it mean? What does it mean to you? Time for acceptance even, right? So, like what do those words mean? We’re going to go over those today. Each word, give you a little bit of a snapshot of what the word is, how it applies to the contract and just what does it mean to you? So, here we go. 

So, we’re going to start with the contract of purchase and sale, which essentially begins as an offer. So, you read your contract, it’s an offer once everything’s done and it’s accepted and it’s agreed to by both parties, you would’ve a firm in binding contract. But at this point, let’s just begin with our offer and start off with some keywords that are going to go with our offer when you want to buy a house.

Part two, the price of the property or at least the price that you’re offering on the property on the offer. Next is the deposit. When is it paid and how much is it going to be? And just any details regarding that deposit. We’ll also talk to you now what the deposit is exactly. It’s not like you’re going to the bank to make a deposit. So, what is this deposit in real estate? We’ll get to that. Next on the contract will be subjects and terms. There’s also going to be when do you take ownership? When do you get the keys? When do you get to move in?

Time for acceptance which means — that actually sounds kind of weird, right? Time for acceptance. So, it means you’ve read the offer, how long does a seller have to reply to that offer, to accept it, to say they want more money or just to say, they’re not interested. So, the time for acceptance is just how long is it open to be accepted by the seller? And there’s certainly a lot more. 

So, let’s just get started with some real estate lingo. And I’ll give you a little bit more detail on each word or each term and how it’ll affect you and what they mean. So, first off is property and price and so those are two big things in the contract and they’re very, very simple.

Property is the place you want to buy and the price is what you’re offering. Maybe later you’re prepared to pay a little bit extra, but the price is the price on the contract that you’re offering. In most real estate transactions, a deposit is paid, the deposit’s going to be paid. And it’s basically showing that you’ve got a commitment to the property and basically saying, yeah, I want to buy the property. I’m signing off on it.

But without signing off on it, the people are going to go like, well, maybe they changed their mind. So, once you’ve done your due diligence, you’ve done your home inspection. You’ve made sure you got everything in order to buy it. You will pay a deposit. Sometimes that deposit will be paid when you remove your subjects, which means you’ve done all your homework. You’re officially buying the property.

Sometimes you’ll pay it just when the deal has been accepted. But regardless that deposit will be paid showing your commitment to the property. Often it’ll be 5, 10% of the purchase price of the property although there is no guaranteed amount. But say you’re buying a nice place. It’s a $800,000 house. Maybe the deposit is going to be $65,000. You’ll bring a deposit check or you’ll pay electronically. That’ll go into a trust account, later go towards your purchase price. But just so you know, what’s a deposit? It’s you showing a commitment financially to you completing the purchase of that house. 

Our next word, our next term, our next lingo word is subjects. You’re always going to hear subject to this, subject to that. When are we removing subjects? What are the subjects? It’s a totally like, it’s just a common word in real estate all the time. So, you’re going to include subjects. A subject always has a timeline associated with it. Maybe you bought a house, you’ve got an offer put together and it’s the end of August.

You’re going to give yourself over 10 business days. You’re going to remove those subjects, do your due diligence. So, maybe the subject is worded something to the effect of subject to having a home inspection done and approved on or before September the 14th. And you’d have a year in there because you’ve got to have it precise. That’s your subject. You’re going to have a whole bunch of other subjects checking the title, getting your financing in order, which will allow you to get an appraiser in there in time. So, all your subjects need to be dealt with. And really, it just means you’re doing due diligence. You’re doing homework on the property. And when you’ve done the subjects and you say, hey, everything’s good. We’re happy with it. You’ll sign a subject removal form. That form means that you’re committed to buying the property, all that due diligence that you want it to do, you’ve done it. You’re satisfied with it.

You’re signing off on it. But the main thing with subjects is you’ve tied up the property. You have an accepted offer, but now you’ve got time to do your homework on the property. Yeah, you have an accepted offer, but you might say, hey, this house is falling apart, we need to do a home inspection. Make sure there’s no surprises. You do your home inspection. There’s no surprises or there’s stuff there that you’re okay to deal with. You say, all’s good, we got our financing in order, our title search is done and we’ve done a bug and pest inspection. There’s a whole bunch of things you can do, but those are all subjects. It’s the thing you want to take care of associated with a date and that you’ve done it. You sign off on it, remove subjects. That’ll help you ensure that you then have a deal that’s in your best interests. 

There’s terms and there’s conditions, terms and conditions could almost be confused with subjects. The difference is a subject has a date associated with it. So, you’re going to do your homework before a certain date. You are the one that has to do that or someone has to do that on your behalf. A term in a condition is just basically more of an agreement or a statement or a point within the contract that does not require any more due diligence. So, you might have a term that the seller will provide you with a survey certificate.

The seller agrees to provide a copy of the survey certificate to the buyer, done. There’s not like any more homework. It’s just a fundamental agreement. Another one might be a walkthrough. So, you agree that there’s going to be a walkthrough done within 24 hours of taking the possession, getting the keys and that you check the appliances. And they agree that all the appliances will be in proper working order. And for some reason, they aren’t in proper working order. It’s in the contract. You have recourse to go back and rectify that. So, in that I talked about doing a walkthrough in possession. What is possession? We’re going to talk about that in just a minute. 

So, now we have completion possession and adjustment dates, things that are similar, but definitely not out the same. Completion date is the day that you agree that the sale is going to register into your name. It’ll go from the seller to the buyer. Once that happens at the land title office where they register ownership of all the properties, the buyer will then be on the title with their name. The seller will be removed and the lawyers will ensure that that buyer is going to be the owner of the property. Formally it’ll be registered.

Now possession date is different. The registration, registration is just what it changes hands but it happens on paper. It doesn’t technically mean you get the keys. Possession is the day and the time that you actually get the keys. So, think completion lawyers, possession keys. You’re moving in on that day. For possession, you look at whatever time is on the contract, whatever day technically you can have your moving truck drive up to the house. If it’s 10:00 AM onto Friday, that’s when you get possession, have your moving truck there for 10:00 AM on Friday, because the house is yours. And then as far as dates are concerned, I mentioned completion. I mentioned possession. The other one was adjustments. So, adjustments are very simple. It’s just the day that the seller no longer has to pay any of the bills, utilities associated with property or property taxes. But the buyer takes over that responsibility. So adjustments, whenever the utilities are, whatever the property taxes, things of that nature it’s adjusted. So, the new owner is responsible on that day to start paying from that day forward for any costs.

All right included items just because you’re buying a place and you see some things in the house. When you walk through it, it has no bearing that they’re going to be included. Appliances doesn’t mean they’re going to be included. You get in the contract. There’s a section included items. It’ll talk about things that need to be included and should be included basically no matter what. However, you’re going to get to appliances, wash dryer, dishwasher, a lot of those things. And when you’re doing the offer, write them in, say this is to be included.

If there’s a basement suite, what’s included in the basement suite. If there’s a car charger and you think that they’re going to leave it behind, but there’s no clarity. Write that in. If there’s a audio system, solar system, pool, there’s cleaning equipment for the pool, there’s all kinds of stuff. Maybe there’s pool noodles and they said, they’re going to leave them if you want them. Or if there’s a hot tub, write it in the contract because if it’s not in writing, it’s not enforceable. If you go to section 18 and the contract to purchase the sale is very interesting. At least I think so. Maybe you’re not going to find it interesting, but it actually says there’s no guarantees, no warranties, et cetera, either than what is set out in writing in the contract. So, make sure you get it in writing, put it in there. And if you expect to see it there, when you move in or if it’s not there, it should have been left there. If it’s in writing, at least you can go back and say, hey, you guys took the built in vacuum. Where’s all the built in vacuum equipment. We wrote it in the contract. But if it’s not in the contract, you’re probably out of luck. So make sure, go into purchase. What’s included. Write it in there. Talk to your realtor about it.

Be very thorough because part of what you’re buying is not just the house, but what’s within the house that you want to. So, take your time and get it. Perfect. Make sure included items are exact what they need to be. And that there’s no gray area, nothing missing. And there’s nothing you’re losing sleep over because you didn’t include it when you should have.

Thanks for watching. You’ve made it pretty far. You’ve listened to a lot of detail, some interesting and some maybe not, but it’s going to be very, very important when you go to buy a house. So, with these words, the last word I want to bring to your attention is just time for acceptance. And that just means when you’re writing this offer, how much time are you giving the seller to get back to you? That’s going to be between you and the realtor and how much time do they need and how much pressure do you want to put on them?

f it’s too much pressure, they may not get back to you. But look at it this way, time for acceptance the day and the time that this seller has to get back to you with an answer to the offer you’ve written. So, thanks for watching this. There’s lots of words here, but at least when you’re doing your offer, when you’re talking to your realtor, hopefully this helps make sense of everything and you can use this lingo video to help it make just a little bit more clarity on the whole process. Thanks for watching you guys, have a great day.