Canadian Real Estate Association (CREA): A national organization in Canada that represents the interests of real estate brokers, agents, and salespeople across the country. CREA provides support, resources, and advocacy for its members and promotes professionalism and ethical standards in the real estate industry. As a voluntary membership organization, CREA plays a key role in shaping real estate policies and regulations in Canada. CREA's primary goal is to promote and protect the interests of its members and the Canadian real estate market as a whole. It also operates the Multiple Listing Service® (MLS®).
Cancellation Clause: Also known as a termination clause, is a provision included in a contract that allows one or both parties to terminate the agreement under specific circumstances. This clause outlines the conditions, notice requirements, and any associated penalties or fees for ending the contract before its designated expiration date.
Cap Rate or Capitalization Rate: The rate of return on an investment property based on its net operating income and market value. It is calculated by dividing the net operating income (NOI) of a property by its current market value. The resulting percentage is the cap rate, which can be used to compare the relative profitability of different properties.
Capital Improvement: A significant renovation or enhancement made to a property that extends its useful life, increases its value, or enhances its functionality. For example, major renovations, additions, upgrades to infrastructure, or the installation of permanent fixtures.
Capitalization: The process of determining the value of an income-producing property by dividing its net operating income (NOI) by the capitalization rate. The capitalization rate is a percentage that represents the expected return on investment for a property. By applying the appropriate capitalization rate to the property's NOI, the estimated value of the property can be calculated, providing valuable information for buyers, sellers, and investors in assessing the financial performance and worth of a real estate asset.
Cash Flow: The amount of money generated by a real estate investment after deducting all expenses and operating costs. It represents the net income received from the property, including rental income and other sources, minus expenses such as mortgage payments, property taxes, maintenance, and vacancies.
Cash-Out Refinance: A mortgage refinancing option where a property owner borrows more than the outstanding mortgage balance, using the difference in cash for other purposes. During the refinance process, the homeowner receives a new loan with a higher principal amount, allowing them to convert their home equity into cash. The borrowed funds can be used for various purposes, such as home improvements, debt consolidation, or investment opportunities, while the new loan terms and interest rate are based on the updated loan amount.
Caveat: A legal notice or warning filed with a land registry or property records to indicate an interest, claim, or potential dispute regarding a specific property. It serves as a public notification to alert potential buyers, lenders, or other parties that there may be an existing legal issue or restriction related to the property.
Certificate of Occupancy: A document issued by a local government or building department indicating that a building or unit is compliant with building codes and can be legally occupied.
Certificate of Sale: A legal document issued by a court or public auctioneer to the winning bidder at a foreclosure sale. It serves as proof of the purchase and transfer of ownership rights to the property.
Chattels: Movable personal property that is not permanently affixed to a property, such as furniture, appliances, or portable items. Chattels are distinct from fixtures, which are items that are permanently attached to the property and are considered to be part of the real estate.
Closing: The final stage of a real estate transaction when the property ownership is transferred from the seller to the buyer.
Closing Costs: The fees and expenses associated with the purchase or sale of a property, paid at the closing.
Co-Signer: Also known as a guarantor, is a person who agrees to assume equal responsibility for a loan or lease alongside the primary borrower or tenant.
Codicil: A legal document that modifies or adds to an existing will. It is used to make minor changes or updates to the original will without requiring a complete revision.
Collection: The process of gathering and receiving payments from tenants for rent or other charges related to a property. This includes activities such as invoicing tenants, tracking payments, and ensuring timely receipt of funds.
Collateral: An asset or property that is pledged as security for a loan or debt. It serves as a form of protection for the lender in case the borrower fails to repay the loan. If the borrower defaults, the lender has the right to seize and sell the collateral to recover the outstanding debt.
Comparable Sales: Recently sold properties that are similar to the subject property and used to determine its fair market value.
Comparative Market Analysis (CMA): A report prepared by a real estate agent or broker that provides an estimate of the value of a property based on recent sales of comparable properties in the same area. A CMA is typically used to help determine the listing price of a property, or to help a buyer make an offer on a property.
Condominium: A type of housing where individuals own their individual units and share ownership of common areas and amenities.
Contingency: A condition or requirement that must be met for a real estate contract to be binding.
Contract: A legally binding agreement between two or more parties that outlines the terms and conditions of a real estate transaction.
Conventional Loan: A mortgage loan that is not insured or guaranteed by a government agency.
Cooperative: A type of housing where residents own shares in a corporation that owns the building, granting them the right to occupy a specific unit.
Counteroffer: A response to an offer that includes modified terms or conditions, creating a new negotiation point.
CREA (The Canadian Real Estate Association): A national organization representing real estate brokers, agents, and salespeople in Canada. Established in 1943, CREA serves as the voice for real estate professionals across the country and advocates for their interests at the federal level. CREA provides various services and resources to its members, including access to market statistics, professional development opportunities, and a comprehensive Multiple Listing Service® (MLS®) system called REALTOR.ca, which is widely used by buyers and sellers to search for properties. Additionally, CREA develops and upholds a Code of Ethics and Standards of Business Practice, ensuring high professional standards and ethical conduct within the real estate industry.
Credit History: A record of an individual's borrowing and repayment activities, including loans, credit cards, and other forms of credit. It includes information such as payment history, outstanding debts, and the length of credit accounts.
Credit Score: A numerical representation of an individual's creditworthiness, based on their credit history and financial behavior.
Curable Defect: A problem or issue with a property that can be remedied or fixed. It is a defect or condition that can be resolved through repairs or renovations, typically at a reasonable cost.
Curb Appeal: The visual attractiveness of a property when viewed from the street or curb.
Custom Home: A residence that is designed and built according to the specific preferences and requirements of the homeowner. It involves collaborating with architects, builders, and designers to create a unique and personalized living space.
Customer Relationship Management (CRM): A system or software used by real estate agents and brokers to manage their interactions with clients and prospects. A CRM may include features such as contact management, lead tracking, and marketing automation, and can help agents and brokers to streamline their business processes and improve their relationships with clients.
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