Selling Your Home: Important Terms Every Seller Should Know

If you’re selling your home, there are a lot of factors to consider but you don’t want to be stuck not understanding what’s going on. We would love to help you sell your home and will take the time to review everything to ensure that you are both comfortable and understand every step of the process, but in the meantime, here are some key terms that you will likely hear while selling your home and what they mean.

Agreement of Purchase and Sale: When you receive offers on your home, it will be presented as an Agreement of Purchase and Sale (APS). You can counter the offer directly on the Agreement and if accepted, this becomes the binding “agreement” for the sale of your home.

Buyer’s Agent: This is the Realtor who is representing the buyer in the transaction.

Closing Date: The closing date refers to the date on which the transaction will be completed. If you are selling your home, this is the day that you will turn in your keys to the lawyer and the new owners will take possession.

Conditions: In order to ensure that they are protected, buyers will often put conditions on their offer. These conditions must be met and waived by a certain date to make the deal firm. In the time that these conditions are being met, the home is said to be “conditionally sold”. Common conditions include home inspection, financing, lawyer review, and securing insurance.

Current Market Analysis (CMA): Realtors use a variety of tools to determine a fair price to list your home. To determine value, a CMA is completed and your home is essentially compared to homes recently sold in your neighbourhood and those currently on the market.

Deposit: When making an offer, the buyer will offer a deposit. This deposit is meant to protect the seller in the case that the buyer backs out of the transaction at the last minute. The deposit is held by either your brokerage or lawyer.

Firm Sale: Once all the conditions have been waived, a home is sold firm. This means that both parties are contractually bound to complete the transaction.

First Refusal: In some cases, the buyer may want to ensure that they sell their own home before fully committing to purchasing yours. In the case of a first refusal, your home will stay active on the market, but in the case of another offer, the buyer will either have to firm up the deal or back out without a set period of time before the other offer can be entertained (usually 24 to 48 hours).

Irrevocable: When an offer is made, or countered, a time frame is given for the other party to respond. If they fail to respond within that time frame, the offer becomes “dead” meaning that it is no longer binding.

MLS (Multiple Listing Service): These trademarked terms are owned by The Canadian Real Estate Association and are used in conjunction with the real estate database system operated by local real estate board.

Multiple Offers: With the current low inventory in the Ottawa area, many homes are going to multiple offers. This means that all the offers are collected and it is up to the sellers to determine which one to proceed with. This is currently a closed process meaning that none of the buyers are aware of the other bids.