Glossary of Terms

Question 1

ACRE

Answer 1

Acronym for Alliance for Canadian Real Estate Education.

Question 2

Acre

Answer 2

An imperial measurement of land area equaling 43,560 square feet.

Question 3

Adjustments

Answer 3

The apportionment or other division of costs between buyer and seller as of the closing date.

Question 4

Administrative Authority

Answer 4

The Real Estate Council of Ontario is the administrative authority designated by the Ministry of Government Services to administer the Real Estate and Business Brokers Act, 2002 and associated Regulations.

Question 5

Advertising

Answer 5

Any message that influences people and generally consists of words, illustrations and design elements in print, electronic or other media format.

Question 6

Affordability Index

Answer 6

An index typically measuring the cost of home ownership in relation to required income to service mortgage payments, property taxes and utilities.

Question 7

Agency

Answer 7

The relationship between principal and agent, wherein an agent is employed and authorized by the principal to represent the principal in business transactions with a third party.

Question 8

Amortization

Answer 8

The gradual retirement of a debt by means of partial payments of the principal at regular intervals.

Question 9

Area Measurement

Answer 9

The measurement of an area by its length (L) and width (W); e.g., a rectangular building 40’ (12.19 m) x 33’ (10.06 m) = 1,320 square feet (122.63 sq. metres). Area measurements can be complex given irregular sizes.

Question 10

Assessed value

Answer 10

A current market value placed on a property as a basis for municipal taxation.

Question 11

Assessment base

Answer 11

The total assessment of a municipality as set out in the assessment role.

Question 12

Blended Payment

Answer 12

A mortgage payment in which the payment amount remains constant, but interest and principal components may vary.

Question 13

BOMA Standard

Answer 13

Standards of measurement methods and calculations widely used with commercial properties in Canada. BOMA is an acronym for Building Owners and Managers Association.

Question 14

Brand Loyalty

Answer 14

A consumer’s commitment to a specific product or service.

Question 15

Broker of Record

Answer 15

A broker designated by a brokerage to ensure brokerage compliance with the Real Estate and Business Brokers Act, 2002 and Regulations.

Question 16

Broker

Answer 16

An individual who has the prescribed qualifications to be registered as a broker under the Real Estate and Business Brokers Act, 2002 and Regulations.

Question 17

Brokerage

Answer 17

An individual who has the prescribed qualifications to be registered as a broker under the Real Estate and Business Brokers Act, 2002 and Regulations.

Question 18

Bulk Mail

Answer 18

Promotional or advertising mailings (other than first class) subject to bulk postage rates that must meet various Canada Post requirements (e.g., pre-sorting).

Question 19

Bulk Postage Rate

Answer 19

A reduced postage rate offered by Canada Post to mailers who can accept less than first class delivery speed, but special processing by the mailer is required (e.g., pre-sorting).

Question 20

Business Cycle

Answer 20

A series of economic events; i.e., prosperity, recession and recovery, that takes place in the same approximate order and time interval.

Question 21

Canada Mortgage & Housing Corporation

Answer 21

A federal agency mandated to carry out various housing related activities, including participation in the residential mortgage market.

Question 22

Canada Real Estate Association (CREA)

Answer 22

A national organization formed in 1943 representing organized real estate in Canada.

Question 23

Census

Answer 23

A census, for purposes of this course, is a periodic count of population conducted by the Government of Canada. A full census is conducted every ten years, the last being 2001. A partial census is conducted at the five-year interval; e.g., 2006.

Question 24

Closing Costs

Answer 24

Various expenses associated with the completion of a sale transaction; e.g., real property taxes, legal expenses and insurance coverage.

Question 25

Code of Ethics

Answer 25

Regulation 580/05 (Code of Ethics) under the Real Estate and Business Brokers Act, 2002 which sets minimum standards for registrants when conducting business in the marketplace; commonly referred to as the RECO Code of Ethics.

Question 26

Commission Sharing

Answer 26

Methods of commission distribution involving one or more brokerages and/or salespersons.

Question 27

Commission splits

Answer 27

A method of sharing commission, most commonly in reference to a brokerage/salesperson split, typically as per an agreement between the parties as employer/employee or two independent contracting parties.

Question 28

Commission

Answer 28

Remuneration paid to a registrant on the sale or lease of property. It is usually expressed as a percentage of the sale amount, but it can also be an agreed amount, or a combination of both.

Question 29

Compound Interest

Answer 29

Interest charged at specific intervals during the loan term with earned interest being reinvested.

Question 30

Consumer Price Index

Answer 30

An indicator of consumer price fluctuations, most commonly associated with comparisons of purchasing power and inflationary pressures. The overall CPI tracks 600 items, but sub-indexes are also tracked for specific groupings; e.g., shelter.

Question 31

Continuing Education (CE)

Answer 31

Requirement for completion of mandatory and elective courses by registered brokers and salespersons, in accordance with the RECO mandatory continuing education policy.

Question 32

Cooling Off Periods

Answer 32

A time period, typically established by legislation, that provides the consumer with an opportunity to cancel whatever action has been taken (e.g., buying a specific product).

Question 33

Core Competencies

Answer 33

Skills, assets and techniques that form the basis of an organization’s or individual’s competitive capacity.

Question 34

Corporation

Answer 34

One of three entities that may be permitted to act as a real estate brokerage. The others are partnership and sole proprietorship.

Question 35

Culture

Answer 35

The shared values of a society in which socially acquired behavior patterns are communicated symbolically, usually through language.

Question 36

Customer Relationship magagement

Answer 36

All aspects of communication and interaction between an organization and its customers

Question 37

Date of Completion

Answer 37

The date specified in the agreement of purchase and sale, when the buyer is to deliver the balance of money due and the seller is to deliver a duly executed deed and vacant possession of the property (unless otherwise agreed).

Question 38

Demography

Answer 38

The study of population changes over time with particular emphasis on the growth/size, distribution and composition of the population.

Question 39

Direct capitalization

Answer 39

The process of converting the income generated by a property into capital value by means of a capitalization rate, as opposed to discounting future cash flows through yield capitalization.

Question 40

Direct Marketing

Answer 40

Marketing methods that convey messages directly to consumers and seek to communicate with those consumers.

Question 41

Discipline Commitee

Answer 41

A committee established under the Real Estate and Business Brokers Act, 2002 to determine whether a registrant has failed to comply with the Code of Ethics.

Question 42

Discount Rate

Answer 42

A rate representing the cost of a lost opportunity. In other words, an investor seeks a rate of return that represents what could have been obtained had another investment been selected.

Question 43

Discrimination

Answer 43

The unfair treatment of an individual or group due to prejudice.