Plain-language definitions for the terms that come up in every Alberta real estate transaction. Share these with your clients so everyone stays on the same page.
A measure of how quickly available homes are selling in a given market over a specific period. It is calculated by dividing the number of homes sold by the total number of homes available. Agents use this to tell clients whether they are in a buyer's or seller's market.
The total length of time it would take to pay off a mortgage in full through regular payments. In Canada, the most common amortization period is 25 years, though 30-year amortizations are available with a minimum 20% down payment.
A planning document adopted by an Alberta municipality that outlines how a specific area of land will be developed. It covers land uses, transportation, utilities, and open space, and is important for understanding the future of a neighbourhood.
The value assigned to a property by the municipality for the purpose of calculating property taxes. In Alberta, assessments are based on market value as of July 1 of the prior year and are issued annually.
A type of condominium in Alberta where the owner holds title to the land and the building, but shares common property such as roads and amenities with other owners in the complex. Common in townhouse and estate-style developments.
A single mortgage that covers two or more properties. Often used by developers or investors in Alberta who are purchasing or developing multiple lots at once.
A short-term loan that helps a buyer cover the gap when their new home's possession date comes before the sale of their current home closes. It is secured against the existing property and is typically repaid within a few weeks.
Official approval from the municipality that allows construction, renovation, or demolition to proceed on a property. In Alberta, a building permit ensures the work meets the Alberta Building Code and local bylaws.
The profit earned when a property is sold for more than its original purchase price. In Canada, capital gains on a principal residence are tax-exempt, but gains on investment or rental properties are taxable - currently 50% of the gain is included in your income.
A legal notice registered on a property's land title in Alberta that warns others of an interest or claim against the property. Common examples include builder's liens, utility easements, or a spouse's interest in a matrimonial home.
An analysis prepared by a real estate agent that estimates a property's market value by comparing it to similar properties that have recently sold, are currently listed, or expired unsold in the same area.
Mortgage default insurance required in Canada when the down payment is less than 20% of the purchase price. It protects the lender - not the buyer - in case of default. Premiums are typically added to the mortgage balance.
A savings account maintained by a condominium corporation to cover major repairs and replacements of common property, such as roofing, parking structures, or elevators. In Alberta, the Condominium Property Act requires a reserve fund study to ensure adequate funding.
Clauses in a purchase contract that must be met before the sale becomes firm. Common conditions include financing approval, a satisfactory home inspection, and review of a condominium document package. If a condition is not met, the buyer can typically walk away.
The number of days a property has been actively listed for sale on MLS. A lower DOM usually signals strong demand, while a higher DOM may indicate overpricing or a slower market.
A national data feed operated by the Canadian Real Estate Association (CREA) that distributes MLS listing data to approved websites and platforms. It is the backbone of how listings appear on sites like REALTOR.ca.
Out-of-pocket expenses that a lawyer or notary pays on your behalf during a real estate transaction - things like title searches, registration fees, and courier costs. These are billed to the client as part of the closing costs.
A land use that may be allowed in a particular zoning district but requires a specific approval from the municipality. Unlike a permitted use, a discretionary use is not guaranteed and may come with conditions. In Alberta, these decisions can be appealed to the Subdivision and Development Appeal Board.
The portion of a home's purchase price that the buyer pays upfront, with the remainder covered by a mortgage. In Canada, the minimum is 5% on the first $500,000, 10% on the portion between $500,000 and $1,499,999, and 20% on homes priced at $1.5 million or more.
A legal right for someone other than the property owner to use a specific part of the land for a defined purpose. In Alberta, utility easements are common and allow companies to access underground pipes or cables running through a property.
When a structure - such as a fence, deck, or garage - extends beyond the property's legal boundary onto neighbouring land or into a municipal setback. An encroachment is typically identified on a Real Property Report.
Any claim, lien, or restriction registered against a property's title that may affect its value or limit how it can be used. Mortgages, caveats, and easements are all common types of encumbrances.
Land set aside during the subdivision process in Alberta to protect natural features such as wetlands, ravines, or steep slopes. Environmental reserve cannot be built on and is typically dedicated to the municipality.
The difference between a property's current market value and the amount still owing on any mortgages or liens. Equity grows as you pay down your mortgage and as the property appreciates in value.
A contractual right that gives a specific party the first opportunity to purchase a property before the owner can accept an offer from someone else. Sometimes seen in commercial leases or agreements between family members.
A mortgage where the interest rate stays the same for the entire term, meaning your regular payments do not change. In Canada, the most popular fixed term is five years.
An area of land identified by the province or municipality as being at risk of flooding. Properties in an Alberta flood plain may face building restrictions, higher insurance costs, or requirements for flood mitigation measures.
The percentage of your gross monthly income that goes toward housing costs - including mortgage payments, property taxes, heating, and condo fees. Canadian lenders generally require a GDS of 39% or lower to qualify for a mortgage.
In Canada, the 5% federal Goods and Services Tax applies to newly constructed homes, substantially renovated homes, and vacant land purchased from a builder. Alberta has no provincial sales tax, so only the federal GST applies. A partial rebate may be available for homes under $450,000.
The length of time an investor owns a property before selling it. A longer holding period can help absorb transaction costs and take advantage of market appreciation. In Canada, properties sold very quickly may be subject to anti-flipping tax rules.
A visual examination of a property's major systems and structure - including the roof, foundation, plumbing, electrical, and HVAC - performed by a qualified inspector. In Alberta, inspections are not mandatory but are strongly recommended and commonly included as a condition of sale.
Building new homes or structures on vacant or underused lots within established neighbourhoods, rather than on undeveloped land at the city's edge. Infill is a growing trend in cities like Edmonton and Calgary as they work to increase density in mature communities.
The legal document that proves ownership of a property in Alberta. Maintained by Alberta Land Titles, it includes the legal description, the registered owner's name, and any encumbrances such as mortgages or caveats.
A legal claim registered against a property, typically as security for an unpaid debt. In Alberta, common examples include builder's liens filed under the Prompt Payment and Construction Lien Act and liens for unpaid property taxes.
A contract between a property owner and a brokerage that authorizes the brokerage to market and sell the property. In Alberta, listing agreements must comply with RECA rules and clearly outline the commission structure and listing term.
The ratio of the mortgage amount to the appraised value of the property, expressed as a percentage. A higher LTV means a smaller down payment. In Canada, any LTV above 80% requires mortgage default insurance.
The rate used by Alberta municipalities to calculate property tax. It represents the amount of tax payable per $1,000 of assessed property value. Each municipality sets its own mill rate annually based on its budget needs.
A cooperative system operated by real estate boards that allows agents to share property listings and offer compensation to buyers' agents. In Alberta, MLS data is managed through regional boards and displayed publicly on REALTOR.ca.
Insurance required by Canadian lenders when the buyer's down payment is less than 20% of the purchase price. Provided by CMHC, Sagen, or Canada Guaranty, it protects the lender if the borrower defaults on the loan.
Land that a developer must dedicate to the municipality - or provide cash-in-lieu - during subdivision. In Alberta, up to 10% of the developable land can be required as municipal reserve, typically used for parks, schools, or public recreation.
A high-level planning document required under Alberta's Municipal Government Act that sets out the long-term vision for growth, land use, transportation, and infrastructure across an entire municipality.
The annual income generated by a rental or investment property after deducting operating expenses such as property management, maintenance, insurance, and property taxes - but before mortgage payments. NOI is a key metric for evaluating investment properties.
A written proposal from a buyer to a seller outlining the price, conditions, and terms under which the buyer is willing to buy the property. In Alberta, the standard form is the AREA (Alberta Real Estate Association) residential purchase contract.
A land use that is automatically allowed within a specific zoning district, as long as it meets the requirements set out in the municipality's land use bylaw. Unlike discretionary uses, permitted uses cannot be refused if all regulations are met.
A review of a property's history and surroundings to identify potential environmental contamination - such as former gas stations, dry cleaners, or industrial uses. Often required by lenders for commercial properties or land with a history of industrial activity in Alberta.
The date when the buyer is entitled to move into the property. In Alberta, this is agreed upon in the purchase contract and is typically the same day the transaction closes and funds are released by the lawyers.
A form completed by the seller that provides information about the property's condition, including known defects, past renovations, and any issues like water damage or pest problems. In Alberta, it is commonly included but not legally required.
A legal document prepared by an Alberta Land Surveyor that shows the boundaries of a property and the location of all structures, fences, and improvements relative to those boundaries. Most Alberta purchase contracts require the seller to provide a current RPR with municipal compliance.
The regulatory body that governs real estate professionals in Alberta, ensuring they meet licensing, education, and conduct standards. RECA oversees agents, brokers, mortgage brokers, and property managers across the province.
A condition registered on a property's title that restricts how the land or buildings can be used. Common examples include limits on exterior materials, building height, or the types of businesses allowed. These are often set by developers during subdivision.
A legal right allowing someone to pass through or use a portion of another person's property for a specific purpose, such as access to a neighbouring lot or a public roadway. Right-of-way details are registered on the land title.
The final sale price divided by the original listing price, expressed as a percentage. A ratio above 100% means the home sold for more than asking, while below 100% means it sold for less. It is a useful market indicator for pricing strategy.
The minimum distance a building or structure must be set back from a property line, road, or other boundary, as defined by the municipal land use bylaw. Setback violations are commonly flagged on Real Property Reports in Alberta.
A one-time fee charged to condominium unit owners to cover unexpected or major expenses that exceed the reserve fund's available balance - such as emergency roof repairs or building envelope work.
The process of dividing a parcel of land into two or more separate lots, each with its own legal title. In Alberta, subdivision must be approved by the municipal subdivision authority and comply with the Municipal Government Act.
A measurement and mapping of a property's boundaries and features performed by a licensed Alberta Land Surveyor. A survey forms the basis of a Real Property Report and is essential for confirming property lines.
The percentage of your gross monthly income that goes toward all debt obligations - housing costs plus car payments, credit cards, student loans, and other debts. Canadian lenders generally require a TDS of 44% or lower.
A one-time insurance policy that protects the buyer or lender against losses caused by title defects, fraud, encroachment issues, or other problems that were not discovered before closing. Increasingly common in Alberta as an alternative to a full RPR with compliance.
A review of a property's land title records to confirm ownership and identify any encumbrances, liens, or caveats registered against it. In Alberta, title searches are conducted through the Alberta Land Titles Office.
The land registration system used in Alberta, where the government guarantees the accuracy of land title records. Once a title is registered, it is considered conclusive proof of ownership. Alberta was one of the first jurisdictions in Canada to adopt this system.
A parcel of land within a subdivision that is designated for utility infrastructure such as power lines, water mains, or stormwater management. Utility lots are owned by the municipality or utility provider and cannot be developed for private use.
A registered right on a property's title that allows a utility company to access, install, and maintain infrastructure - such as gas lines, power cables, or sewer pipes - on or under a portion of the property.
A mortgage where the interest rate fluctuates with the lender's prime rate, which is influenced by the Bank of Canada's policy rate. Monthly payments may stay fixed while the interest-to-principal split changes, or payments themselves may adjust.
A financing arrangement where the seller lends the buyer a portion of the purchase price, secured by a mortgage on the property. This can be useful in Alberta when a buyer has difficulty qualifying for full conventional financing.
A numerical rating - typically from 0 to 100 - that measures how convenient it is to run daily errands on foot from a given address. Higher scores mean more amenities within walking distance and can positively influence property values.
A last visit to the property before the possession date, allowing the buyer to confirm the home is in the agreed-upon condition, any negotiated repairs have been completed, and all included items remain in the property.
The classification assigned to a property by the municipality's land use bylaw, which determines what can be built and how the property can be used - residential, commercial, industrial, or mixed-use. In Alberta, zoning is set at the municipal level and can be changed through a rezoning application.
A formal approval from the municipality that allows a property to deviate from one or more specific zoning regulations - such as a reduced setback or additional building height - without changing the overall zoning designation. In Alberta, variances are granted by the Subdivision and Development Appeal Board.