Amortization is a term used when setting up your mortgage. It refers to the repayment schedule over a period of time and outlines how much of your payment will go to the principal you are borrowing and how much will go to the interest on the balance. Simply put, amortization is the process of gradually paying off a loan through scheduled payments that cover both principal and interest over time.

In real estate, assessed value refers to the dollar value assigned to a property by a municipal or provincial tax authority for the purpose of calculating property taxes. It is typically based on factors like the property’s location, size, and market conditions, but it may not reflect the property’s current market value or sale price.

A bridge loan in real estate is a short-term financing option used to bridge the gap between buying a new property and selling an existing one. It provides immediate funds for a down payment or closing costs, allowing homeowners to secure their new property before completing the sale of their current one. These loans typically have higher interest rates and are intended for temporary use until longer-term financing is secured or the sale of the existing property is finalized.

The BRRRR Method—Buy, Rehab, Rent, Refinance, Repeat—is a real estate investment strategy where an investor purchases a property, renovates it to increase its value, rents it out for steady income, refinances to recover initial capital, and repeats the process. This method benefits real estate investors looking to build a portfolio with limited upfront cash by leveraging equity from each property to fund future investments. It's particularly effective for those focused on long-term wealth building through rental income and property appreciation.

Cap rate (capitalization rate) is a real estate metric used to estimate the return on investment for income-generating properties. It’s calculated by dividing a property’s annual net operating income (NOI) by its current market value or purchase price. For example, a property with an NOI of $50,000 and a value of $1,000,000 has a cap rate of 5%. Investors use cap rates to compare the profitability of properties and assess potential risks, with higher cap rates indicating higher returns but often with increased risk.

A cash deal or cash offer in real estate is when a buyer purchases a property outright without financing, using readily available funds. This type of offer often appeals to sellers because it eliminates the need for mortgage approval, reduces the risk of delays, and typically leads to a faster closing process. Cash deals are common among investors or buyers looking to make competitive offers in a hot market.

Chattels are movable personal property items that are not permanently attached to a home or land. Examples include furniture, appliances, and tools. In real estate transactions, chattels are typically excluded from the sale unless explicitly included in the purchase agreement.

A Comparative Market Analysis (CMA) is an estimate of a property’s market value based on recent sales of similar properties. CMAs are prepared by real estate agents to help sellers price their homes and buyers assess fair offers. Originally intended as a marketing tool for agents, CMAs are typically offered for free. While helpful, they are not as detailed or legally recognized as a real estate appraisal, which is conducted by licensed appraisers for precise valuations.

A conditional sale in real estate means that the purchase agreement is subject to specific conditions being met before the sale becomes final. Common conditions include the buyer securing financing, completing a satisfactory home inspection, or selling their current property. If the conditions are not fulfilled within the agreed timeframe, the deal may be canceled without penalties to the parties involved.

Conditions in real estate are specific requirements outlined in a purchase agreement that must be met for the transaction to proceed. Common conditions include financing approval, home inspections, or property appraisals. They are important because they protect both buyers and sellers by ensuring that key aspects of the deal are satisfied before the sale becomes binding, reducing risks and potential disputes. The typical time frame for conditions to be met in a real estate transaction is 5 to 10 business days, though it can vary depending on the market and the specific conditions. For example, financing and home inspection conditions often fall within this range, while more complex conditions, like selling an existing property, may require a longer period. The exact time frame is negotiated between the buyer and seller and outlined in the purchase agreement.

A condo fee is a monthly payment made by condo owners to cover shared building expenses like maintenance, utilities, and amenities. When purchasing a condo, be aware of the fee amount, what it includes, and any potential increases. Review the condo corporation’s financial health, reserve fund, and bylaws to ensure there are no hidden costs or upcoming special assessments that could affect your budget.

A condominium is a type of property ownership where individuals own their unit while sharing ownership of common areas like hallways, amenities, and grounds. Condominiums can include residential condos (apartments, townhouses), commercial condos (office or retail spaces), and detached condos, where standalone homes share communal amenities. Each type is governed by a condo corporation and specific bylaws, offering a mix of private and shared living or working spaces.

The Canadian Real Estate Association (CREA) is a national organization representing real estate professionals across Canada. CREA owns trademarks like MLS® and Realtor®, which ensure standardized practices and protect the integrity of the real estate industry. They provide resources, advocacy, and tools like the MLS® System, enabling members to deliver professional services and consumers to access reliable property listings.

Days on Market (DOM) refers to the number of days a property is listed for sale on the MLS® System before being sold or removed. It helps buyers and sellers gauge a property's demand and market activity. While DOM can be reset by re-listing a property, such manipulation may mislead buyers, making transparency key in real estate transactions.

An escalation clause in real estate is a contract provision that automatically increases a buyer’s offer if competing bids are higher, up to a set maximum. It’s useful in competitive markets where multiple offers are expected, helping buyers stay competitive without overbidding initially. A well-drafted escalation clause ensures transparency and protects the buyer by capping the amount they’re willing to pay.

FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) is Canada’s financial intelligence agency responsible for detecting and preventing money laundering and terrorist financing. In real estate, FINTRAC compliance is necessary during transactions to verify client identities and report large cash payments or suspicious activities. It ensures transparency and safeguards the industry from financial crimes.

Freehold land refers to property ownership where the owner holds full rights to the land and any structures on it indefinitely. In real estate, there are different types of freehold ownership, such as single-family homes, rural properties, and commercial land. Unlike leasehold properties, freehold land gives owners greater control but comes with full responsibility for maintenance and taxes.

FSBO stands for For Sale By Owner, where a property owner sells their home without hiring a real estate agent. People sell FSBO to save on commission fees and maintain control over the sale process, while buyers may find unique opportunities or lower prices. FSBO is legal in Canada and the U.S., but sellers must follow local regulations and handle tasks like marketing, pricing, and legal paperwork independently.

Home equity is the portion of a property’s value that the owner fully owns, calculated by subtracting any outstanding mortgage balance from the home’s market value. It’s important because it represents financial stability, can be used as collateral for loans, and grows as you pay down your mortgage or as property values increase. Home equity is a key asset for wealth-building and funding future investments.

A Home Equity Line of Credit (HELOC) is a revolving credit line secured by your home’s equity, allowing you to borrow as needed. It’s beneficial for large expenses like renovations or emergencies due to its flexibility and lower interest rates compared to unsecured loans. To qualify, you need sufficient home equity, good credit, and stable income. HELOCs are offered by banks and financial institutions, often alongside your mortgage provider.

In Alberta, the land transfer fee is a cost paid when registering a property’s title with the Land Titles Office after purchase. It includes a base fee plus a calculated amount based on the property’s value and mortgage amount. Buyers must pay it at closing, with costs varying depending on the property price but generally lower than in other provinces. Land Title Registration Fee: $50 base fee plus $2 for every $5,000 (or portion thereof) of the property’s value. Mortgage Registration Fee: $50 base fee plus $1.50 for every $5,000 (or portion thereof) of the mortgage amount. Both fees are combined and paid to the Land Titles Office during the property registration process. For example, on a $500,000 property with a $400,000 mortgage, the total fee would include the registration costs for both the property value and the mortgage. Up to date information and fees can be found on the alberta.ca website.

A land transfer tax is a provincial or municipal tax paid when purchasing property, calculated as a percentage of the property's purchase price. Unlike Alberta’s land transfer fee, which is a smaller administrative cost for title registration, land transfer taxes are often significantly higher and vary by province. Alberta does not have a land transfer tax, making its property purchase costs lower than most other provinces.

Leased land refers to property where you own the building but lease the land it sits on from another party, such as a government or private owner. Benefits include lower purchase prices and access to unique locations. However, disadvantages include ongoing lease payments, limited property appreciation, and potential lease non-renewal risks. It’s important to review lease terms carefully before purchasing.

Mortgage insurance protects lenders against default when buyers make a down payment of less than 20% of the property’s value. It’s necessary for high-ratio mortgages and ensures access to homeownership with smaller upfront costs. The premium, typically 2.8–4% of the loan amount, is added to monthly payments. While it doesn’t protect buyers, it enables lower down payments and mitigates lender risk. In Alberta, mortgage insurance is typically obtained through one of three primary providers approved by lenders: Canada Mortgage and Housing Corporation (CMHC): A federal agency offering mortgage insurance for high-ratio mortgages across Canada. Sagen (formerly Genworth Canada): A private mortgage insurance provider offering flexible options for homebuyers. Canada Guaranty: Another private insurer providing mortgage default insurance with competitive terms. Your lender will arrange mortgage insurance on your behalf when you apply for a high-ratio mortgage, so you don’t need to apply for it directly. Mortgage insurance is mandatory in Canada, including Alberta, for high-ratio mortgages, where the down payment is less than 20% of the property’s purchase price. It protects lenders in case the borrower defaults on the loan. However, for conventional mortgages with a down payment of 20% or more, mortgage insurance is not usually required.

A real estate appraisal is a licensed appraiser's formal evaluation of a property's market value, often required for mortgages, refinancing, or legal purposes. It’s important because it provides an unbiased, detailed, and legally recognized valuation. Unlike a Comparative Market Analysis (CMA), which estimates value based on market trends and comparable sales, an appraisal is more comprehensive and credible, offering greater accuracy and reliability for financial decisions.

Real estate conveyance is the legal process of transferring property ownership from the seller to the buyer. It includes preparing, verifying, and registering documents like the title transfer and ensuring all financial obligations, such as taxes and fees, are settled. This process is typically handled by real estate lawyers or conveyancers to ensure accuracy and compliance with local laws.

A Real Property Report (RPR) is a legal document prepared by a surveyor that outlines a property’s boundaries, structures, and compliance with local bylaws. While not always mandatory, it is often required in Alberta when selling a property to confirm that the structures comply with municipal regulations. An RPR is important because it provides clarity and protects both buyers and sellers by identifying any encroachments or boundary issues before the transaction is completed. Properties that have been sold before may already have a Real Property Report (RPR). However, the existing RPR must be up-to-date and reflect all current structures and improvements on the property to remain valid. If changes like new decks, fences, or additions have been made since the last RPR, a new or updated RPR will be required for the sale to ensure compliance with municipal regulations. Sellers should confirm the RPR’s accuracy and provide it to buyers during the transaction. The cost of a Real Property Report (RPR) in Alberta typically ranges from $500 to $1,500, depending on the property’s size, location, and complexity. To obtain an RPR, you must hire a licensed land surveyor, often found through recommendations from real estate agents, lawyers, or professional directories like the Alberta Land Surveyors’ Association (ALSA). Ensure the RPR is up-to-date and reflects all existing structures on the property.

A reserve fund is a savings account maintained by condominium corporations to cover major repairs and replacements for shared property elements, like roofs or elevators. When buying a condo, review the reserve fund’s balance, recent contributions, and the reserve fund study to ensure it’s adequately funded. A healthy reserve fund is crucial to avoid unexpected special assessments and maintain the property’s long-term value.

ROI, or Return on Investment, measures the profitability of an investment by comparing the net profit to the initial cost. It’s expressed as a percentage and helps evaluate how effectively an investment generates returns. Return on Investment (ROI) in real estate is calculated by dividing the net profit from a property by the total investment cost, then multiplying by 100 to express it as a percentage. For example, if a property earns $10,000 in profit on a $100,000 investment, the ROI is 10%. It’s important because it helps investors compare profitability across properties and make informed decisions about where to allocate funds for maximum returns.

A Seller Property Information Statement (SPIS) is a disclosure form completed by the seller, detailing a property's condition and any known issues. It’s important because it promotes transparency, helping buyers make informed decisions and protecting sellers from future liability by disclosing defects upfront. A Seller Property Information Statement (SPIS) is not legally required in any Canadian province. However, sellers are legally obligated to disclose known material defects that could affect the property's value or safety. The SPIS is a voluntary tool used to document such disclosures, but it must be completed honestly to avoid potential legal disputes. Its use varies by region and is often encouraged by real estate professionals to promote transparency.

Wholesale real estate involves assigning a property contract from a seller to a buyer for a fee, without purchasing the property. It’s legal in Canada, including Alberta, when done transparently and in compliance with local laws. Sellers benefit by quickly offloading properties, buyers gain access to off-market deals, and investors can profit with minimal upfront costs. Proper contracts and disclosures are essential for all parties.

The key difference between cap rate and ROI lies in their purpose and calculation: Cap Rate measures the annual return on an investment property based on its net operating income (NOI) relative to the current market value or purchase price. It’s primarily used to evaluate the property’s profitability, independent of financing. Formula: Cap Rate = NOI ÷ Property Value × 100 ROI (Return on Investment) considers the total profit relative to the total investment, including costs like financing, renovations, and operating expenses. It evaluates the overall performance of the investment. Formula: ROI = Net Profit ÷ Total Investment × 100 In short, cap rate focuses on property performance, while ROI reflects the investor's overall return, including financing and other variables.