Sale-leaseback
A type of real estate transaction where the seller transfers the title to the buyer upon purchase, but then rents the property from the new owner. This practice is not common in Canada.

Sales Contract
A legal written document that details the agreed upon conditions between a seller and a buyer regarding the sale of a specific property. Also called an “Agreement of Sale.”

Sales tax
Provincial and federal taxes applied to the purchase of a property. Residential resale properties are usually exempt from federal GST but newly constructed properties are not.

Second Mortgage
A mortgage loan that takes priority after a first mortgage on a registered land title.

Secured Debt
A debt that is secured by a lien on a debtor’s property (typically a mortgage loan) that may be taken by the creditor if the debtor defaults on his or her payments.

Secured Loan
The borrower must provide collateral in order to borrow the money.

Security
1. Something deposited or given as assurance of the fulfillment of an obligation. For example, property is often used as collateral for a loan.
2. A document which indicates ownership such as a stock certificate or bond.

Self-Employed Person
An individual who owns and operates a trade or business rather than working as an employee for company.
1. You are self-employed if you are a sole proprietor or a partner working in a business.
2. You can be an employee and self-employed at the same time if you have an independent business outside of your regular employee hours. To qualify for many business tax exclusions and deductions, the business must make a profit in three of five years. In most cases, to qualify you must take and average of the last two - three years tax assessments.

Seller Broker
An individual who earns a commission (paid by the seller of a property) in exchange for finding a buyer and assisting in the negotiation for the real estate transaction.

Seller’s Market
When the real estate market favors the seller. This type of market usually means the seller is expected to sell quickly and for market or above market value.

Semi-custom Home
A house in which the layout is predetermined by the builder. This means the buyer cannot alter the layout, but he or she can specify some of the features including the type of cabinets and floor coverings.

Settlement Statement
A document that contains the details and conditions of a settlement. It describes whom must pay, the amount to be paid, and to whom the money is to be paid.

Shared-appreciation Mortgage
A type of mortgage loan where the lender offers a below-market interest rate in exchange for profit sharing when the property is sold. This is typically only done with private funds/lenders.

Shared-equity Partnership
An agreement between multiple buyers where one buyer inhabits the property and the other buyer has an ownership stake as an investment. The partners split the capital gain after the property is sold.

Short-term Liabilities
Money that must be paid in less than a year (12 months), including wages, short-term loans, taxes, credit card balances and long-term loans.

Simple Interest
Interest that is calculated only on the principal balance, without compounding.

Simple Interest Loan
A method of allocating the monthly payment between interest and principal. The interest charged is determined by the unpaid principal balance on the loan, the interest rate, and the number of days since the last payment. The rest of the payment goes to the principal. Making early payments or additional payments reduces the loan’s principal and cuts the total interest paid over the life of the loan.

Step Down Lease
A lease that allows for decreases in a rental payment on specified dates.

Step-rate Mortgage
A fixed-rate mortgage loan where payments are lower at the beginning of the loan, typically for two years, but then increase after the specified time period.

Step Up Lease
A lease that allows for increases to rental payment at certain time periods.

Sub-prime Borrower
A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.

Sub-prime Mortgage
A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
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Subordinate Loan
A mortgage with priority that is below that of another mortgage. This includes second or third mortgages, or home-equity loans.

Sweat Equity
The value of the work, including renovations, maintenance, or repairs, put into a house by its owner. This can be used in place of a full down payment (up to and including 50% of a down payment).

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Photo: Benoit Remillard

The Montreal Real Estate Blog showcases outstanding images from talented local photographers.  If you’d like to submit your photography, please join our flickr pool.

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1. Condition de la propriété :

Si la maison n’est pas présentée sous son meilleur jour on perd des ventes potentielles. La condition du toit, de la fondation, de la structure, de la peinture et du recouvrement de plancher sont des éléments importants qui sont pris en compte par l’acheteur. Il est bien sûr avantageux de faire certains travaux mais si le projet vous est impossible, il faudra prendre en considération ce fait lors de la négociation du prix.

Votre maison devra être impeccablement propre à l’intérieur comme à l’extérieur. C’est incroyable de constater que la majorité des acheteurs refusent de voir au-delà de petits détails esthétiques superficiels. Pour illustrer cette idée, beaucoup d’acheteurs peuvent visiter une maison qui serait parfaite pour eux au niveau des caractéristiques et qui affiche en plus un prix en-dessous du marché. Malgré tout, si la propriété est très encombrée, que le tapis est abîmé, la peinture jaunie et écaillée ou qu’il y a une forte odeur d’animaux, ils ne retiendront pas la propriété et préféreront passer à la prochaine.

Votre agent pourra vous donner une liste de conseils de petites choses à faire qui contribueront à rendre votre propriété plus attirante. La plupart de ces conseils ont un coût minime et nécessite plutôt votre temps.

2. A stratégie de prix de affiché:

A venir! Souscrire au Blog.

Ecrit par Sheila Iacono. Agent immobilier affilié.
Royal Le Page Habitaction. Courtier Immobilier agreé.

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Gregory Klump, the association’s chief economist, says the price decline was the first since January, 1999 and reflects a slumping economy and the huge runup in prices in recent years in Alberta’s energy-based economy.

In June, the major market MLS residential average price edged down 0.4 per cent year-over-year to $341,096, says the association as it released its latest Multiple Listing Service statistics.

Klump says the slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year.

The real estate group says the average price in these markets retreated after rising dramatically last year, but has stabilized since March this year in line with a balanced market.

Source: The Canadian Press

Around the News:

• House prices hit brakes - The Globe and Mail
  The cooling housing market took on a decided chill in June, when the average price of a resale home declined for the first time in more than nine years.News of the pullback in home prices came shortly after the Bank of Canada announced it would stand pat on interest rates, and it removes one potential factor that could have prompted a rate increase later this year, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.
  >> Read the complete article

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The new rules, set to take effect Oct. 15, are a “responsible and measured approach … to reduce the risk of a U.S.-style housing bubble developing in Canada,” the Department of Finance said in a news release.
The measures will apply to new, government-backed, insured mortgages. “Canadians who already hold mortgages will not be affected,” it said.

The changes include:
• Cutting the maximum amortization period to 35 years from 40.
• Requiring a minimum down payment of five per cent, whereas loans for 100 per cent of the price are possible now.
• Establishing a requirement for a consistent minimum credit score.
• Introducing new loan-documentation standards.

The government acknowledged that the proportion of bank mortgages in arrears is stable at 0.27 per cent, “near the lowest levels experienced since 1990 and well below the highs of 0.65 per cent experienced in each of 1992 and 1997.”

Source: CBC News

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“Unlike the general trend elsewhere in Canada, the resale market in the Montréal Metropolitan Area is doing well,” says Michel Beauséjour, FCA, Chief Executive Officer of the GMREB. “Other large Canadian cities are seeing slower activity, with sales in Toronto decreasing by 14% since the beginning of the year, by 32% in Calgary and by 20% in Vancouver.”

For the Montréal Metropolitan Area, 25,519 transactions were recorded in the MLS® system during the first six months of 2008, a decrease of 3% compared to the 26,430 sales during the same period last year.

“Condominiums go against the tide recorded since the start of 2008 with a cumulative increase of sales of 7% compared to the first six months of 2007, while single-family homes show an equal decrease of 7%,” says Michel Beauséjour.

Source: The Montreal Real Estate Board

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If you are buying a home, you may be wondering whether it’s better to lock in a fixed rate in case rates continue to go up, or choose a variable rate that floats with the prime rate. Similarly, if your existing mortgage is variable, you may be wondering whether now is the time to lock in.

Mortgage rates are difficult to predict. It is best to base your decision on your personal situation and comfort level, rather on economic expectations.

Going variable

Variable-rate mortgages can be attractive - the interest rate is lower than for a fixed mortgage of similar size and duration.

With some mortgages, as rates fluctuate, so does the amount of your mortgage payments. Or, with set payment amounts, the portion of the payment that covers your mortgage principal will fluctuate.

In an environment of falling rates, you’ll pay down more principal and pay less interest. But if rates go up, your principal payments will shrink and it may take you longer to fully pay for your home.

Should you choose a variable-rate mortgage? If you can tolerate the uncertainty, the variable rate could save you money over the long term.

Locking in

When you lock in to a fixed-rate mortgage, the interest rate will be higher than for comparable variable-rate products. The benefit, however, is that your rate is fixed for the term of the mortgage.

Even if rates in general rise substantially, your rate is guaranteed not to change. From the moment you lock in, you’ll know exactly what your payments will be and how much of the principal will remain at the end of the term.

Should you choose a fixed-rate mortgage? If fluctuation rates are going to keep you awake at night, then a fixed-rate mortgage may be worth the peace of mind it can give you.

Your decision

Ultimately, the decision to choose a variable or a fixed-rate mortgage is as personal as choosing the right home. It should always be made with informed advice from a professional, who can help you evaluate the options based on your unique circumstances.

For any questions about mortgage financing, programs, options, interest rates etc., feel free to contact Danuta at 1-800-605-6154

Written by Danuta Levitzki.
Conseillère en Financement Hypothécaire | Mortgage Loan Specialist
Visit her website

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Asking Price: $239,000
Property Type : Triplex
Bedrooms : 2
Interior Floor Space : 800 sqft
Built in : 1910
Location : Central - East (Montréal)
City Evaluation: $228,200

Although the information sheet describes the location as “Central”, we’ll call it Central-East, since the near intersection are borderline Hochelaga-Maisonneuve area. And we ALL know that’s not really central “downtownish”, is it?

This little triplex with its funky looking doors is now listed under foreclosure properties by RE/MAX 2000.
The MLS sheet does not mention it, but it has a yearly gross revenue of $17,000 more or less. Good? Well, that will depend on the property’s expenses, which there is no mention of it either.

There are also no additional images of this property. But if you are so keen to know more, you can contact us for more Repossession listings in the area.

Stay tuned for more listed foreclosure properties: Subscribe to the Montreal Real Estate Blog

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Rate Hold
The length of time, typically between 60 and 120 days, that a lender will guarantee a loan’s interest rate once you are locked in.

Rate Lock-in
A written agreement or contract in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set time period.

Real Estate Agent
An individual who is licensed to represent a buyer or a seller of real estate in a sales transaction. Real estate agents typically work on commission.

Real Estate Attorney
An attorney or lawyer who specializes in real estate transactions. This includes dealing with property tax issues and the transfer of land and buildings.

Real Estate Broker
An individual who is licensed to represent a buyer or a seller of real estate and collects commissions for the work. Most brokers have agents working for them and they collect a portion of those commissions in exchange for providing office space, marketing, and other overhead.

Real estate brokerage
The professional activity of real estate brokers and agents. Brokerage transactions and professional acts carried out by real estate brokers and agents concerning the purchase, sale, rental or exchange of immovable properties. Profession which can only be practiced by holders of a certificate issued by the Association des courtiers et agents immobiliers du Québec.

Real Property
Permanent, non-movable property, such as land and buildings.

Realtor
A real estate broker or an associate that holds an active membership in a real estate board.

Recognized Gain or Loss
The amount of gain or loss reported for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.

Refinance
To arrange a new loan for an increased amount whereby the old loan is paid off from the proceeds of the new loan.

Refinancing
The act of paying off one mortgage with another mortgage to take advantage of lower interest rates. Refinancing is also used to transform equity into cash for vacations, home improvements, or for consolidating debt.

Refund
1. To give back, return, or repay (typically money).
2. The excess of your withholding and estimated tax payments for the year that you paid over your tax liability. The Federal Government then issues a tax refund if you paid more taxes over the year for your tax bracket.

Registered Education Savings Plan
Education savings plans that grow tax free until a child is ready to pursue a post-secondary education, at which time the money is withdrawn to help finance the costs.

Registered Retirement Savings Plan (RRSP)
A savings plan introduced by the Federal Government to encourage Canadians to save money for retirement. The investment and the interest earned on the RRSP is sheltered meaning it will not be taxed as long as the funds remain in the plan.

Reliction
An increase in the amount of land that occurs when a body of water (such as a river or sea) permanently withdraws.

Relocation Benefits
Monetary assistance and other considerations given to employees who must relocate at their company’s request. This can include reimbursement for packing and moving, house-hunting trips, and temporary housing/storage expenses.

Relocation Company
A company or business that specializes in providing assistance to individuals who are being relocated by their employers.

Remaining Balance
The unpaid or remaining principal left on a loan.

Remaining Term
The length of time remaining for a borrower to pay off the rest of an installment loan as scheduled.

Renewal
Extending an unpaid loan with the original lender when the terms of the loan expire.

Repayment Period
With a home equity line of credit, that portion of the life of the loan that follows the draw period. During the repayment period, the borrower cannot take out any more money, but must pay down the loan.

Repayment Plan
Modifications made to the repayment terms of an existing loan after the borrower is delinquent. Often used when the borrower misses payments, but the lender does not foreclose.

Replacement Cost
The amount or cost to rebuild and refurnish with materials and items of similar value. For example, replacement costs are used for insurance purposes in the event of theft or fire when replacing lost items.

Replacement Reserve Fund
Funds that are set aside by a homeowner’s association or condominium board to replace common property, such as playground equipment.

Repossession
If a borrower stops making payments on a property, the lender has the legal right to take back the property.

Resale Value
The price or dollar amount that a property owner is able to negotiate when selling an existing home or property.

Rescission
The cancellation of a contract as agreed by all of the parties involved.

Reserve Fund
Funds that are set aside or reserved by a home owner’s association or condo board for major repairs and improvements to common areas.

Reserves
Formerly required to be maintained by the bank in accordance with Bank Act regulations, but are now phased out.

Resident Alien
A person who is living as a legal permanent resident, but is not a citizen of that country.

Residual Value
The value of the vehicle at the end of a lease agreement which is agreed upon at the time of signing.

Restructured Loan
A mortgage in which basic terms — such as interest rate, term and monthly payment — are altered or restructured to prevent foreclosure on the property. This is not a regular practice in Canada.

Resets
The periodical balancing of an account for the purpose of converting interest into principal, and charging the party liable thereon with compound interest.

Retail Banking
Banking services offered to individual customers such as savings accounts, personal loans, cheque cashing, and RRSPs.

Retained Earnings
All of the profits or losses accumulated from prior years and from the present year’s income statement, minus dividends paid to you.

Return
Any increase in value, profit, or income that is earned from an investment.

Return on Investment
The gains or profit from an investment that is typically expressed as equity divided by cash flow.

Right of First Refusal
An agreement made by a property owner which gives a specific buyer the opportunity to purchase the property before it is offered to anyone else.

Right of ownership
Recognition which gives the owner of a property the right to use, enjoy and freely and fully dispose of the property, to the extent of the limits and conditions imposed by law.

Right of withdrawal

Privilege which a natural person has to withdraw a real estate brokerage contract for the sell of his immovable within three days following receipt of the contract duplicate signed by both parties, unless there is a written waiver. After this period, if the contract is marked “irrevocable”, it cannot be cancelled under any circumstance nor can the term be changed unless the broker or agent agrees.
Note: The right of cancellation applies when the contract involves a chiefly residential building containing less than five dwellings.

Royalty Income
Payments or money received for the use and exploitation of certain kinds of property, such as artistic or literary works, patents, and mineral rights.

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NOTE: Choosing the wrong mortgage can cost you thousands of unnecessary paid interest money.

Why Should You Go To a Mortgage Broker First?

A professional presentation to a lender on the first application will get the best response and save you valuable time and money. Secondary applications with previous credit bureau inquiries may be more costly.
Often the success of obtaining mortgage approval depends on the way a proposal is presented and to whom it is sent. Your Mortgage Broker is trained to present your mortgage proposal to obtain the most immediate and positive result.

Example: You don’t call an insurance company for insurance - you use an insurance broker, because of their expertise, product knowledge and rates. So remember, call your mortgage broker first!

How Do Brokers Get Better Deals Than Many Banks?

Brokers often develop professional relationships with private sources of funds, termed private lenders. These lenders can provide many various mortgage products not available at conventional sources.

Can You Still Go Through Your Bank With Your Broker?

Yes, letting a Mortgage Broker represent you to your own financial institution can often result in a better rate than you could get on your own.

Written by Danuta Levitzki. Conseillère en Financement Hypothécaire | Mortgage Loan Specialist
For current interest rates or to get more information on mortgage financing feel free to visit her website or call direct at 1-800-605-6154.

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