Agreement of Purchase and Sale (APS)
The legal contract between buyer and seller. Once signed by both parties and conditions are removed, it's binding. Your lawyer should review it before you sign.
Amortization
The total length of time you'll take to pay off your mortgage, typically 25 or 30 years. First-time buyers can now access a 30-year amortization even with less than 20% down, which lowers the monthly payment. Not to be confused with your mortgage term (usually 1–5 years).
Bridge Financing
A short-term loan that lets you close on your new home before you've received the proceeds from selling your current one. Useful when timelines don't line up.
CMHC Insurance
Mortgage default insurance required when your down payment is less than 20%. It protects the lender, not you, but it allows you to buy with less money down.
Closing Date
The date title transfers from seller to buyer, and the buyer takes possession. This is the date lawyers finalize documents and funds are exchanged.
Comparative Market Analysis (CMA)
A report your agent prepares showing what similar homes have sold for recently. It's the foundation for setting a listing price or writing a competitive offer.
Condition
A clause in the offer that must be satisfied before the deal is firm. Common conditions: financing (mortgage approval) and inspection. You can walk away if the condition isn't met.
Deposit
A good-faith payment made by the buyer when an offer is accepted, most often 2 to 3% of the purchase price and sometimes as low as 1%. A larger deposit can strengthen an offer when you are competing. It's held in trust and forms part of the down payment, and in Karim's offers it's due one business day after acceptance rather than the standard 24 hours.
Down Payment
The upfront portion of the purchase price you pay in cash (minimum 5% in Canada). The rest is financed through your mortgage.
First Home Savings Account (FHSA)
A registered account that lets first-time buyers save up to $40,000 toward a home. Contributions are tax-deductible (like an RRSP) and qualifying withdrawals are tax-free (like a TFSA).
First-Time Home Buyers' Tax Credit (HBTC)
A federal tax credit worth up to $1,500 for eligible first-time buyers, claimed on your income tax return the year you buy.
Freehold
You own the building and the land it sits on. No monthly condo fees, but you're responsible for all maintenance, insurance, and repairs yourself.
Home Buyers' Plan (HBP)
A program that lets first-time buyers withdraw up to $60,000 from their RRSP ($120,000 for a couple) toward a home purchase, tax-free. The amount is repaid to your RRSP over time.
Irrevocable Period
The time window after submitting an offer during which you cannot withdraw it. The seller uses this period to accept, reject, or counter your offer.
Land Transfer Tax
A provincial tax paid by the buyer at closing, calculated as a percentage of the purchase price. First-time buyers in Ontario may qualify for a rebate up to $4,000.
Listing Price vs. Sale Price
The listing price is what the seller is asking. The sale price is what a buyer agreed to pay. They're often different, and understanding the gap is part of pricing strategy.
MLS® (Multiple Listing Service)
The database REALTORS® use to list and search properties. Most listings you see on real estate portals are pulled from MLS®.
Mortgage Term
The length of your current mortgage agreement, typically 1 to 5 years, after which you renew at prevailing rates. Not the same as amortization.
Pre-Approval
A lender's commitment (based on verified income and credit) to lend you up to a specific amount. More reliable than pre-qualification. Start here before you start looking.
Status Certificate
A document for condo purchases that outlines the financial and legal health of the condo corporation: reserve fund, special assessments, and bylaws. Your lawyer reviews it.
Title Insurance
Insurance that protects you (and your lender) against issues with the property's title: fraud, encroachments, and survey errors. It's a one-time cost, typically under $400.