10 Real Estate Facts You May Find Surprisingly Interesting!
Real estate is full of terminology, industry practices and little-known details that can make a big difference when buying, selling or owning a property. From understanding how square footage is calculated to decoding mortgage terminology and navigating purchase offers, there is plenty to learn beyond what you see on a property listing.
Whether you are a first-time buyer, an experienced homeowner or simply curious about the real estate industry, these facts are worth knowing.
Here are 10 interesting real estate facts that might surprise you!
1. Square Footage Isn’t Always What You Think
When it comes to measuring a home, the numbers can be a little more complicated than they appear. Measurements may be calculated using exterior dimensions, and the treatment of basements, garages, balconies and other spaces can vary depending on the measurement standard used. Above-grade finished area and below-grade finished area may also be reported separately.
When comparing properties, always check what is included in the advertised square footage rather than assuming every listing uses the same calculation.
2. CMHC Is More Than Just a Mortgage Acronym
CMHC stands for Canada Mortgage and Housing Corporation. It is a federal Crown corporation that plays an important role in Canada’s housing system, including mortgage loan insurance, housing research and affordable housing initiatives.
For homebuyers, CMHC is particularly well known for its mortgage loan insurance, which can help eligible buyers purchase a home with a down payment of less than 20%.
3. First-Time Homebuyer Doesn’t Always Mean First-Time Homeowner
You might be surprised to learn that certain buyers who have previously owned a home can still qualify as first-time homebuyers under specific federal program rules.
For example, eligibility can include individuals who have not owned or occupied an eligible home as their principal residence within the previous four calendar years. There are also provisions for people who have experienced a relationship breakdown and have been living separately for at least 90 days.
The rules depend on the particular program, so it is always worth checking eligibility before assuming you do not qualify.
4. Amortization Is About the Long Game
Amortization refers to the period over which a mortgage is scheduled to be repaid through regular payments of principal and interest.
With each payment, a portion goes toward reducing the outstanding mortgage balance while another portion covers interest. Depending on the mortgage terms, the proportion allocated to each changes over time.
A longer amortization period generally means lower regular payments, but more interest paid over the life of the mortgage.
5. A Lis Pendens Can Affect a Property’s Title
In British Columbia, what was historically known as a lis pendens is now generally referred to as a Certificate of Pending Litigation (CPL).
It is a legal notice registered against a property’s title when a party to a court proceeding is claiming an interest in the land. A registered CPL can significantly affect the owner’s ability to sell, transfer or refinance the property while the legal matter remains unresolved.
It is one of the reasons reviewing a property’s title is such an important part of a real estate transaction.
6. MLS® Is Actually a Trademark
Many people use the term MLS as though it simply refers to an online database of homes for sale. However, MLS® (Multiple Listing Service®) is a registered trademark owned by the Canadian Real Estate Association (CREA).
The trademark identifies professional real estate services provided through the REALTOR® community and its cooperative selling system. Its use is governed by CREA’s licensing requirements.
So, the next time you see MLS®, remember there is more to it than a collection of property listings!
7. What Does SPP Mean in Real Estate?
SPP stands for Subject to Sale of Purchaser’s Property. It refers to an offer to purchase a home that is conditional upon the buyer selling their existing property.
This type of offer can be useful for buyers who need the proceeds from their current home to complete their next purchase. However, sellers should understand the conditions and timelines involved before accepting one.
8. An SPP Offer May Include a Time Clause
When a seller accepts an offer that is subject to the sale of the buyer’s property, they may also negotiate a time clause.
This can allow the seller to continue considering other offers. If another acceptable offer comes along, the original buyer may be given a specified period to remove their conditions and proceed with the purchase.
Without a time clause, the seller may have fewer options if another interested buyer comes forward. The exact rights and obligations depend on how the contract is written.
9. Real Estate Professionals Can Be Held Liable for Misrepresentation
Accurate property information is essential in any real estate transaction. Negligent misrepresentation occurs when someone provides inaccurate information without taking reasonable care to ensure it is correct, and another party relies on that information to their detriment.
Real estate professionals have responsibilities to exercise appropriate care and diligence when representing property details. Even an unintentional error can have legal consequences in certain circumstances.
This is why verifying information and communicating accurately are so important in real estate.
10. Real Estate Commissions Are Negotiable
Here is something every buyer and seller should know: real estate commission rates are not universally fixed in Canada.
Brokerages establish their own commission structures, and compensation is negotiated between the brokerage and its client. Real estate companies cannot collude with competing brokerages to establish fixed commission rates, as doing so can violate Canada’s Competition Act.
It is always a good idea to understand the services included in a commission agreement and what you are receiving in return.
There’s Always More to Know About Real Estate!
The real estate industry is full of interesting details, and understanding them can help you make more informed decisions along the way. Whether you are preparing to buy, considering selling or simply keeping an eye on the market, having the right information and professional guidance makes all the difference.
At VIRANI REAL ESTATE ADVISORS, we believe that real estate expertise goes beyond knowing the market. It means understanding the details, anticipating challenges and helping our clients navigate every stage of their real estate journey.
Have a real estate question? We probably have an answer. Connect with VIRANI REAL ESTATE ADVISORS and put our experience to work.