The honest answer: Real estate vocabulary is dense and confusing — and the wrong understanding of one term (like the difference between a CMA and an appraisal) can cost a Ontario seller $10,000–$40,000. This glossary covers the 60 terms every Ontario buyer, seller, or homeowner should know, with practical definitions specific to Ontario and the Toronto-area market.
Defined and reviewed by Alex Goodman, RECO-licensed Sales Representative with RE/MAX Your Community Realty.
A
Adjustable-Rate Mortgage
Amortization
Appraisal
AVM
B
Brokerage
Buyer’s Agent
C
Closing Costs
CMA
CMHC
Conditional Offer
Condominium / Condo
Conventional Mortgage
CREA
D
Days on Market
Deposit
Detached
Down Payment
DTI
E
Easement
Encroachment
F
Firm Offer
Fixed-Rate Mortgage
G
GDS Ratio
H
HELOC
Heritage Designation
High-Ratio Mortgage
I
Insured Mortgage
IRD
L
Land Transfer Tax
Letter of Opinion
List Price
List-to-Sold Ratio
Listing Agent
LTV
M
MLS
Mortgage Broker
Mortgage Term
MPAC
MPAC Reconsideration
Multiple Offers
Multiple Representation
O
Offer Date
Open House
P
POTL
Pre-Approval
Pre-Qualification
Property Tax
R
RECO
Refinancing
Renewal
S
Sales Representative
Semi-Detached
Showing
Sold Price
Staging
Status Certificate
Stress Test
T
TDS Ratio
Title Insurance
Title Search
Toronto Municipal LTT
Townhouse / Row House
Ontario MLS
V
Variable-Rate Mortgage
A variable-rate mortgage where the payment amount adjusts with the rate (vs. a ‘true’ variable where the payment stays the same but the amortization shifts). ARMs expose you to immediate payment shock if rates rise.
The total length of time it would take to fully pay off a mortgage. In Canada, maximum amortization is 25 years for insured mortgages, 30 years for conventional mortgages, and 30 years for first-time buyers/new construction (under the December 2024 rule changes). Longer amortization = lower payments but more total interest.
A formal valuation prepared by a licensed appraiser (AACI, CRA, or DAR designation). Costs $400-$600 in Ontario, takes 2-5 business days. Legally rigorous, required by lenders for mortgages and HELOCs, and required by courts for divorce/estate matters. Accuracy ±3-5% of sold price.
An algorithmic home value estimate produced by software using public records, recent sales, and property features. Examples: Zestimate (Zillow), Realtor.ca estimate, InstantCalculator.ca. Margin of error in Ontario is typically 10-15%. Useful for ballpark estimates, not for final pricing decisions.
The licensed real estate company under which a sales representative (agent) operates. In Ontario, all real estate transactions must occur through a brokerage. Examples in Ontario: RE/MAX, Royal LePage, Sutton, Century 21. RECO licenses both the brokerage and the individual agents.
The real estate agent representing the buyer. Their fiduciary duty is to the buyer. In Ontario, buyer’s agent commission is typically paid by the seller (negotiated in the listing agreement), though this is changing as of 2024 RECO reforms — buyers now sign a Buyer Representation Agreement specifying their agent’s compensation.
All non-purchase-price costs of a real estate transaction. In Ontario, expect 1.5-4% of purchase price: land transfer tax, lawyer fees, title insurance, home inspection, status certificate (condo), adjustments. On a $1M Ontario purchase, closing costs are typically $20K-$40K.
A pricing analysis prepared by a real estate agent, comparing your home to recent sold properties in the area. A CMA is free, takes 24-72 hours to prepare, and typically lands within 3-5% of the eventual sold price for Ontario homes. CMAs are used for pricing your home for sale, NOT for legal/financial purposes.
Canada Mortgage and Housing Corporation — the federal Crown corporation that insures high-ratio mortgages (down payments under 20%). CMHC insurance is mandatory for high-ratio mortgages and is paid by the borrower (typically rolled into the mortgage balance).
An offer to purchase that contains conditions (e.g., financing, home inspection, status certificate review) that must be satisfied before the deal becomes firm. Typical condition period: 5-10 business days. Most Ontario offers in 2026 are conditional.
A property where you own your individual unit but share ownership of common elements (lobby, parking, hallways) via the condo corporation. Monthly condo fees fund the corporation’s operations and reserve fund.
A mortgage with a down payment of 20% or more. Does not require mortgage default insurance. Typically offers more flexibility on amortization and lender choice than insured mortgages.
The Canadian Real Estate Association — the national industry body. CREA owns the Realtor® and MLS® trademarks. Members must follow the CREA Code of Ethics.
The number of days a property is actively listed before it sells. Median DOM in the City of Toronto was 22 days in Q1 2026, with well-priced homes typically receiving offers within 14-25 days. DOM is one of the strongest indicators of pricing accuracy: homes priced correctly sell in 7-25 days.
The good-faith funds paid by the buyer when an offer is accepted, typically 5% of purchase price in Ontario. Held in the listing brokerage’s trust account until closing. Forfeit if the buyer backs out without valid reason.
A single-family home that doesn’t share walls with another residence. The most expensive property type in Toronto. Q1 2026 average sold price: $1.65M.
The upfront cash portion of a home purchase, paid by the buyer. In Canada, minimum down payments are: 5% on the first $500K, 10% on the portion $500K-$1.5M, and 20% on any portion above $1.5M. The maximum mortgage-insurable purchase price is $1.5M as of December 2024.
The ratio of monthly debt payments to monthly gross income. Canadian lenders calculate two specific debt ratios: GDS (Gross Debt Service) and TDS (Total Debt Service).
A legal right for someone else to use part of your property for a specific purpose (e.g., a utility easement for hydro lines). Easements stay with the property through ownership changes.
Where a structure (fence, deck, shed) extends from one property onto another. Encroachments must be disclosed in real estate transactions and can affect title insurance.
An offer with no conditions, or one where all conditions have been satisfied. Once firm, the deal is binding — backing out triggers loss of deposit and potential lawsuit.
A mortgage with an interest rate that stays the same for the entire term. Provides predictability but typically priced higher than variable rates. Comes with substantial break penalties (IRD calculation) if you exit early.
Mortgage payment + property taxes + heat + 50% of condo fees, divided by gross monthly income. CMHC requires GDS ≤ 39% for insured mortgages. Lenders typically prefer GDS ≤ 32%.
A revolving line of credit secured against your home equity. Maximum 65% LTV in Canada. Interest-only payments allowed. Often used for major expenses, debt consolidation, or investment. Variable rate.
A formal designation under Ontario’s Heritage Act that protects a property’s historical character. Heritage-designated homes face restrictions on exterior alterations and demolition. Common in Toronto neighbourhoods like Cabbagetown, the Annex, Rosedale, and Old Town.
A mortgage where the loan exceeds 80% of the home’s value (i.e., down payment under 20%). Requires CMHC or equivalent insurance and is subject to additional federal rules.
A mortgage with a down payment of less than 20% of the purchase price, requiring mortgage default insurance from CMHC, Sagen, or Canada Guaranty. The insurance protects the lender; the cost is paid by the borrower.
The break penalty calculation for fixed-rate mortgages, equal to the difference between your contract rate and the lender’s current rate for the remaining term. Can be $15,000-$40,000+ on a typical Ontario mortgage broken early.
Provincial tax paid by the buyer on real estate transactions. Ontario LTT is tiered: 0.5% on first $55K, 1.0% on next $195K, 1.5% on next $150K, 2.0% on next $1.6M, and 2.5% on the portion above $2M. First-time buyers get up to $4K rebate.
A written, signed document from a licensed real estate agent stating their professional opinion of a property’s market value, supported by recent comparable sales. Similar to a CMA but more formal. Free, no obligation, accuracy ±3-5%. Used for pricing decisions, planning, and personal records — not for lending.
The asking price set on a property when it goes to market. In Ontario, list prices vary widely from final sold prices: well-priced homes often close 102-108% of list; overpriced homes close 88-95% of list after reductions.
The ratio of final sold price to original list price, expressed as a percentage. A list-to-sold ratio of 100% means the home sold for asking; above 100% means above asking; below 100% means below asking. The Ontario list-to-sold ratio in Q1 2026 was 99.4% — indicating a mild seller’s market.
The real estate agent representing the seller in a transaction. Their fiduciary duty is to the seller, and their commission is typically paid by the seller out of the sale proceeds. Also called a ‘seller’s agent.’ In Ontario, a listing agent must be registered under RECO.
The ratio of the mortgage amount to the property value. An 80% LTV means the loan is 80% of the property value (i.e., 20% down payment). Lenders price interest rates partly based on LTV — higher LTV often means higher rate or insurance cost.
Multiple Listing Service — the database where real estate listings are shared between agents. The MLS® System (trademarked by CREA) powers Realtor.ca and gives all member agents access to listings, sold history, and market data.
An independent licensed professional who shops mortgages across multiple lenders (typically 30-50). Brokers are paid commission by lenders, not by borrowers. Using a broker typically saves 0.15-0.40% on rate vs. dealing with one bank — $15K-$40K over a 5-year term.
The length of time your mortgage rate and conditions are locked in. Most common in Canada is 5 years. Don’t confuse term (commitment period) with amortization (total payoff length).
Municipal Property Assessment Corporation — the Ontario body that assesses property values for municipal tax purposes. Assessments are updated every 4 years (last full update was 2016; the next is delayed). MPAC values are typically 15-30% below actual market value in Ontario.
The Ontario process for disputing an MPAC property assessment. Free for the first appeal level (Request for Reconsideration). Higher appeals (Assessment Review Board) involve fees. Most successful appeals involve appraisal evidence.
When more than one buyer submits a competing offer on the same property at the same time. In Ontario, sellers can choose to inform competing buyers (per regulation) but cannot disclose specific offer details.
When the same brokerage represents both buyer and seller in a transaction. In Ontario, this requires written consent from both parties under TRESA (Trust in Real Estate Services Act, 2024). Disclosure is mandatory.
A specific date set by the seller for reviewing offers, common in hot markets with multiple offer expectations. Hold-back strategy: list low, build interest, review all offers together on offer date.
A scheduled time when a listed property is open for any prospective buyer to walk through without an appointment. Most common on weekend afternoons.
A property type combining freehold ownership (you own your unit and land) with a small ongoing fee for shared amenities (e.g., a private road or common green space). Increasingly common in newer Ontario developments.
A formal commitment from a lender to provide a mortgage up to a specified amount, with a specific rate held for 90-120 days. Requires income verification, credit check, and asset documentation. A pre-approval is what Ontario sellers will take seriously when reviewing offers.
An informal estimate from a lender of how much you might qualify to borrow, based on self-reported income and debt. Pre-qualifications are not binding and are not commitments. They typically take 5-15 minutes.
Annual municipal tax based on MPAC assessed value × municipality’s tax rate. In Toronto, the residential tax rate is approximately 0.71% (2024) — lower than 905 municipalities (Vaughan, Mississauga ~0.8%; Brampton ~1.0%; Hamilton ~1.3%). Lower rate × higher Toronto values = comparable absolute tax.
The Real Estate Council of Ontario — the provincial regulator overseeing all licensed real estate professionals. RECO sets education requirements, handles complaints, and maintains the public registrant search at reco.on.ca. Every Ontario real estate agent and brokerage must be RECO-registered.
Breaking your current mortgage to take out new financing — either to access equity, change amortization, or switch lenders. Refinancing mid-term involves break penalties; at renewal, no penalty. Refinances can also extend amortization or change rate type.
The process of signing a new mortgage term at the end of your current one. Most Canadians renew with their existing lender without shopping — and pay 0.15-0.40% more in rate as a result. Always shop 120 days before renewal.
The Ontario term for a real estate agent. To use the term ‘Realtor®,’ the salesperson must also be a member of the Canadian Real Estate Association (CREA). ‘Sales Representative’ is the legal title under RECO; ‘Realtor’ is the trademarked CREA designation.
A single-family home sharing one wall with another home. Common in Toronto’s mid-19th to mid-20th century neighbourhoods. Q1 2026 average sold price: $1.20M.
An in-person tour of a listed property by a prospective buyer (with their agent). In Ontario, well-priced homes can receive 20-60 showings in the first week.
The final purchase price recorded after closing. Sold price is the only number that matters for market analysis — list prices are negotiation starting points; sold prices are what the market actually paid.
Professional preparation of a home for sale — furniture rental, decor, lighting, decluttering. Costs $2K-$6K in Ontario for a typical detached home. Returns 5-15x cost in higher final sold price.
A document required when buying a condo in Ontario, summarizing the condo corporation’s financial health, reserve fund, recent decisions, and any pending lawsuits. Status certificates cost $100-$150 and must be reviewed by a lawyer before condo purchase. Vital — uncovered issues can be deal-breakers.
Canadian federal regulation requiring mortgage applicants to qualify at the higher of: their contract rate + 2%, or the qualifying rate (5.25% as of 2024+ for OSFI-regulated lenders). The stress test reduces what most Ontario buyers can borrow by approximately 15-20% vs. their actual rate.
Total monthly debt obligations (mortgage + all other debt payments) divided by gross monthly income. CMHC requires TDS ≤ 44% for insured mortgages. Lenders typically prefer TDS ≤ 40%.
Insurance protecting against defects in property title (e.g., undisclosed liens, easements, encroachments, fraud). One-time fee of $250-$500 paid at closing. Standard practice in Ontario for all real estate transactions.
A legal review of the property’s title history, conducted by your lawyer before closing. Reveals any liens, easements, prior owners, and other legal interests. Done in tandem with title insurance.
An ADDITIONAL land transfer tax charged by the City of Toronto (on top of Ontario LTT). Same tiered structure. On a $1.5M Toronto purchase, total LTT (Ontario + Toronto) is approximately $54K — double what’s paid on a comparable 905 purchase.
A multi-unit home sharing walls on both sides with adjacent units. Often freehold (you own the land) but can also be condominium (you own the unit but share land with the condo corporation).
The Toronto Regional Real Estate Board — the regional industry organization covering Ontario. Ontario MLS operates the MLS database for Ontario listings and publishes monthly ‘Market Watch’ reports with sold price data.
A mortgage with an interest rate that floats with the Bank of Canada’s prime rate. Historically outperforms fixed rates ~70% of the time in Canada, but can hurt during rapid rate-hike cycles. Break penalties are typically 3 months’ interest (vs. IRD for fixed).
A free 15-minute Letter of Opinion call walks through your specific situation — the terms, the math, and what they mean for your home. No agenda. If there’s nothing useful for you, I’ll say so.
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