Real estate trivia

by Hugh Hardy

Available Articles

• Article Index
• Are you "signing your life away"?
• Buying new versus resale
• Choosing a Realtor - What does it take to sell your home?
• Don't push the river!
• Getting the most from your Realtor
• Home ownership is part of smart money management
• Knowing your strengths and weaknesses
• Let's talk about commissions
• Open vs Closed? Making the most of your mortgage
• Prepare your home to command a premium price
• Real estate trivia
• Recognizing the paper tiger
• The easy way to buy a custom home
• The importance of pricing right
• The value of a buyer's agent
• Two safe ways to trade up
• What does irrevocable really mean?
• What to expect from your agent when you buy
• What's a Chattel, What's a Fixture (and why should I care)

In today's column, I thought that I would make a list of facts about real estate that you might not know - little tidbits of trivia that have been floating around aimlessly in my brain for the last 10 years or so. For example, and I mentioned this in a previous column, did you know that by signing an offer on a property you are also consenting to a credit check? Anyway, here's my "did you know?" list for today...

1. The definition of "first time buyer" according to CMHC - which allows you to buy with 5% down - has been expanded to include purchasers who have been relocated for job reasons, purchasers who have either split with a spouse or ended a joint family ownership, and finally, purchasers who have lost equity in a home and no longer have 10% down.
2. CMHC stands for Canada Mortgage and Housing Corporation and is a Government of Canada organization to assist with the purchase of homes and the repair of existing homes.
3. The square footage of a house is measured from the outside walls of the house and only includes living area that is above grade. Agents may list the square footage of the entire house - both above and below grade - by using terms like "total finished living area".
4. A bathroom with a door to the master bedroom as well as a door to the main house is called a semi-ensuite".
5. A Lis Pendens is a notice that is recorded on the title of a property in the land registry office that says that there is pending court action involving the property. Betcha didn't know that one!
6. MLS is a trademark - just like Coca-Cola. The real estate boards are licenced to use the MLS trademark. Nobody else can.
7. An "SPP" offer is part of the lingo used by real estate agents to refer to an offer that is conditional upon the sale of the purchaser's property.
8. Most SPP offers have an "escape clause" which allows another offer to bump the SPP offer. Most people think that the escape clause can only be used with SPP offers. This is not true. An escape clause can be used with any conditional offer - for example, an offer which is conditional on mortgage approval can also have an escape clause. Also, on the other hand, an SPP offer does not necessarily have to have an escape clause if all parties to the transaction agree.
9. If an Agent innocently misrepresents the facts about a property and should have known the true facts - based upon his assumed expertise - then that Agent can be sued and held liable for the error. This is called Negligent Misrepresentation.
10. It is legal for a real estate company to have a fixed commission policy for it's sales people, but it is illegal for real estate companies to get together with other real estate companies to set fixed commission rates. This violates the Competition Act.

Well, that's it for little known facts for this week. I'll be writing the occasional column on this topic in the future - stay tuned!

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