Glossary C
Capital Gain
Profit earned from the sale of an asset.
Caveat Emptor
Latin for 'Let the Buyer beware'. Under this legal phrase, the Buyer is expected to judge and evaluate property carefully before buying, or purchase at their own risk.
Closed Mortgage
A mortgage that locks you into a specific payment schedule for a specific amount of time. A penalty usually applies if you repay the loan in full before the end of the time period.
Closing Costs
Costs, in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on the closing date. Closing costs typically range from 1.5% - 4% of a home's selling price.
Closing Date
The date on which the title and keys to a property are transferred from the Seller to the Buyer, and money is transferred from the Buyer to the Seller. The Buyer is the new owner.
Cloud on Title
A defect in the title that impairs the owner's ability to market the property. This might be a lien, claim, judgment, or encumbrance.
CMHC
Canada Mortgage and Housing Corporation. A Crown corporation that administers the National Housing Act for the federal government and encourages the improvement of housing and living conditions for all Canadians. CMHC also creates and sells mortgage loan insurance products.
Collateral
Something of value given or pledged to a lender as security for the repayment of a loan.
Commission
Payment, or brokerage fees, given by the Seller of a property to a real estate agent for services rendered. Usually paid at the closing.
Commitment Letter / Mortgage Approval
Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.
Common Elements
The portions of a condominium development shared by the unit owners.
Comparables
Properties that are similar to a specific piece of property that are used to help estimate the value of that property.
Competitive Market Analysis
A method of determining home value that looks at recent home sales, homes presently on the market, and homes that were listed but did not sell.
Conditional Offer / Conditions of Sale
An Offer to Purchase that is subject to specified conditions, for example, the arranging of a mortgage. There is usually a stipulated time limit within which the conditions must be met.
Condominium
Shared ownership in property. Owners have title (ownership) to individual units and a proportionate share in the common elements.
Condominium Fee
A monthly fee paid by condo owners for maintaining the development's common areas.
Consideration
Something of value, usually money, given to induce another to enter into a contract.
Construction Loan
Type of loan where money is given to a builder as stages of construction are reached. The borrower obtains a permanent long-term mortgage from another source to repay the construction loan.
Contingency
A provision in a contract that keeps it from becoming binding until a certain event happens. A satisfactory home inspection report might be a contingency. Also called a condition.
Contract
A legally enforceable agreement between two or more parties. To be valid, a real estate contract must be dated, in writing, include a deposit, have a description of the property, spell out all terms and conditions that were mutually agreed upon, and must be executed (signed) by the Buyer and the Seller.
Contractor
In construction, a specialist who enters into a formal construction contract to build a structure, or handle renovations, improvements, or additions to an existing structure.
Conventional Mortgage Loan
A mortgage loan up to a maximum of 75% of the lending value of the property. Normally, mortgage loan insurance is not required for this type of mortgage.
Counter Offer
One party's written response to the other party's offer during negotiation of a real estate purchase between Buyer and Seller.
Convey
To transfer property from one person to another.
Conveyance
Document used to transfer title. A deed is a conveyance.
Covenant
A clause in a legal document which, in the case of a mortgage, gives the parties to the mortgage a right or an obligation. For example, a covenant can impose the obligation on a borrower to make mortgage payments in certain amounts on certain dates. A mortgage document consists of covenants agreed to by the borrower and the lender.
Credit Report
A past history of debt repayment used by creditors and lenders as an indicator of future readiness to responsibly repay debt.
