Real estate agencies glossary

Short, plain-English definitions of the terms you'll meet when choosing a real estate agency provider in London, Ontario.

What are fixtures vs chattels in real estate?: Fixtures are items permanently attached to or part of a property that transfer with the sale, while chattels are movable personal goods that remain the seller's property unless explicitly included in the offer.
What is a buyer representation agreement?: A buyer representation agreement is a contract between a buyer and a real estate agent that establishes the terms of representation, including exclusivity rights and the length of time the agent will work on behalf of the buyer.
What is a cap rate (capitalization rate)?: A capitalization rate is the annual net operating income of a property divided by its purchase price, expressed as a percentage, used to evaluate the expected return on an income-generating property.
What is a conditional offer?: A conditional offer is an offer to purchase a property with terms that must be met before closing, such as successful home inspection, mortgage approval, or sale of the buyer's existing home.
What is a firm offer?: A firm offer is an unconditional offer to purchase real estate with no conditions, meaning the buyer has committed to complete the transaction regardless of inspection results or financing approval.
What is a holdback in real estate?: A holdback is a percentage of closing funds (typically 10 percent) withheld from the seller or contractor and released after a statutory holdback period or deficiency correction, as required under Ontario's Construction Lien Act.
What is a real property report?: A surveyed document that maps the legal boundaries of a property, the location of buildings and structures on it, and any encroachments or deviations from the registered legal description.
What is a reserve fund study?: A reserve fund study is the required periodic assessment, conducted under Ontario Condominium Act rules, that determines whether a condo corporation has sufficient funds to cover major repairs and replacements of common property components.
What is a Seller property information statement?: A seller property information statement (SPIS) is an optional disclosure form in Ontario that allows sellers to inform buyers about known defects, repairs, and property history before purchase.
What is a status certificate?: A status certificate is an official document issued by a condominium corporation that discloses its financial status, reserve fund, governing documents, and rules to prospective buyers or their legal representatives.
What is a triple net lease (NNN)?: A commercial lease structure in which the tenant pays base rent and is responsible for all three net costs: property taxes, building insurance, and maintenance expenses.
What is a zoning designation?: A zoning designation is the municipal classification assigned to a property that specifies what types of development and use are legally permitted on that land under London, Ontario's zoning bylaw.
What is an agreement of purchase and sale addendum?: An addendum is a written supplement to an agreement of purchase and sale that modifies, clarifies, or adds conditions to the original contract between buyer and seller.
What is an Agreement of purchase and sale?: The Agreement of Purchase and Sale is the binding legal contract between a buyer and seller that sets out the price, property details, conditions, and closing date for a real estate transaction in Ontario.
What is an assignment sale?: An assignment sale is the transfer of a pre-construction purchase contract from the original buyer to a new buyer before the property closes, typically requiring the builder's written consent.
What is an irrevocable date?: The irrevocable date is the deadline specified in a real estate offer by which the seller must accept it or the offer automatically expires and becomes void.
What is an MLS (Multiple Listing Service)?: An MLS is a cooperative database that allows licensed real estate agents in Ontario to share property listings with each other, giving buyers and sellers broader market exposure than publicly available sites alone.
What is an occupancy period?: The occupancy period is the interval between when a buyer takes possession of a new condo and when the sale formally closes and the property is registered with the Land Registry. During this time, the buyer typically pays occupancy fees to cover utilities, property tax, and common expenses.
What is designated representation?: Designated representation is an Ontario real estate practice where one brokerage appoints individual agents to represent the seller and buyer separately, allowing the brokerage to facilitate both sides while keeping each agent's loyalty distinct.
What is dual agency in real estate?: Dual agency is when a single real estate brokerage represents both the buyer and the seller in the same property transaction, requiring written disclosure and informed consent from both parties under Ontario law.
What is land transfer tax?: Land transfer tax is a provincial tax levied in Ontario on the transfer of real property ownership, calculated as a percentage of the purchase price and paid by the buyer at closing.
What is net operating income (NOI)?: Net operating income (NOI) is the annual revenue from a property minus all operating expenses, calculated before debt service, mortgage payments, or income taxes.
What is Tarion warranty?: Tarion warranty is Ontario's mandatory consumer protection program that guarantees coverage of deposits, delayed closings, and construction defects on new homes built by enrolled builders.
What is title insurance?: Title insurance is a one-time insurance policy that protects a property owner or lender against financial loss resulting from title defects, fraud, or undisclosed liens discovered after a real estate purchase closes.