Appraisal
An unbiased estimate of a property’s market value, usually conducted by a licensed appraiser. Lenders require an appraisal to ensure the property is worth the purchase price before approving a mortgage.
Closing Costs
Additional expenses buyers must pay at the time of purchase, separate from the property’s purchase price. These can include legal fees, title insurance, property transfer tax, and more. Typically ranges from 1.5% to 4% of the purchase price in B.C.
Completion Day
The date on which the legal title of the property is transferred from the seller to the buyer. On this day, the buyer’s lawyer or notary sends the funds to the seller’s lawyer and registers the property at the Land Title Office. This is not the day you get your keys—it is the day you start your insurance.
Deposit
A good faith sum of money paid by the buyer once an offer is accepted. It is typically 5% of the purchase price, due within 24–48 hours of subject removal. The funds are held in trust (usually by the buyer’s brokerage) and applied to the purchase price at completion.
Firm Offer
Now that you have an accepted offer, it is up to the buyer to satisfy their conditional terms and complete any due diligence. During this time, your Realtor and mortgage broker will work together to satisfy the lender’s requirements for your mortgage. Once the rescission period has passed and the deposit has been provided (most commonly held in trust by your Realtor’s brokerage)—congrats! You have a firm and binding contract.
GST
In Canada, the Goods and Services Tax (GST) applies only to new homes, jew mobile or modular homes, substantially renovated residential properties, or vacant land. More Information
Home Inspection
A detailed examination of a property’s condition, usually conducted by a certified home inspector. This helps buyers identify any issues with the home before finalizing the purchase.
Multiple Offer
A situation where more than one buyer submits an offer on the same property, typically driving up the sale price. This often occurs in a seller’s market and may result in subject-free offers or offers over asking price.
Possession Day
The day the buyer takes physical possession of the property. It is typically one or two days after Completion Day. This is when you get the keys and can move in.
Pre-Approval
A lender’s written commitment stating how much they’re willing to lend the buyer based on an initial review of financial information. It strengthens an offer and shows sellers the buyer is serious.
Property Tax
An annual tax paid to the municipality based on the assessed value of the property. It is billed annually (usually in July) and pro-rated at the time of sale.
Property Transfer Tax (PTT)
A one-time tax paid by the buyer when a property changes ownership in B.C.
Standard rates:
- 1% on the first $200,000
- 2% on the portion from $200,001 to $2,000,000
- 3% on the portion from $2,000,001 to $3,000,000
- 5% on any amount above $3,000,000 (residential only)
Some exemptions apply (e.g. First-Time Home Buyer or Newly Built Home exemptions.)
Recission Period
On January 3, 2023, the B.C. government implemented the Home Buyer Rescission Period (“HBRP”) for residential real estate transactions. Also known as the “cooling-off period,” this measure gives homebuyers up to three business days to rescind an offer on a home after the offer has been accepted. More information
Strata
A form of ownership common in condos and townhomes. Owners share responsibility for common areas and must pay monthly strata fees. Buyers should always review strata documents before purchasing.
Subject Conditions (Subjects)
Clauses in the offer that must be fulfilled for the sale to proceed. Common subjects include financing, inspection, or review of strata documents. Once subjects are removed, the offer becomes firm.
Title Search
A search of public records to confirm the legal ownership of the property and identify any liens, easements, or charges on title that could affect the transaction.