Agreement of Purchase and Sale:

This legal document outlines every aspect of your purchase, including the terms to which the customer and the builder have agreed. An Agreement of Purchase and Sale contains a number of different schedules that explain a specific area of the agreement.

Amendments to Agreement:

An amendment to an agreement means the customer and the homebuilder agree to change a part of the original Agreement of Purchase and Sale.

Amortization Period:

This is the number of years it will take to repay your mortgage. For example, if you borrow $100,000 you may choose an amortization period of 25 years. This means you will have 25 years to pay back the $100,000 you borrowed.

Artist's Concept:

These are the drawings usually available at model homes. An artist has drawn these images to help give customers an idea of what their completed house will look like.

Building Envelope:

This is the area on your lot within which your house must fit.

Building Location Survey:

This is a document prepared by an Ontario Land Surveyor (OLS) showing the exact location of your new home on the lot.

Building Time:

Under normal conditions, and depending on the complexity of the project, most homes can be constructed in 4 to 6 months.

Closing Costs:

These are costs that will be incurred by you at the time your new home is completed and include items such as land transfer tax and legal fees.

Closing Date:

This is the date by which the builder will have your new home completed and is set out in the Agreement of Purchase and Sale.

Developer:

A reference to the person or group that purchased the parcel of land where the subdivision is located. The developer pays for servicing the subject lands and, in turn, sells lots to homebuilders.

Easements:

An easement is a right of access to a property. For example a drainage easement gives a municipality the right to access a property in order to maintain its storm and sanitary sewers. Most easements run along rear and side yards.

Frontage:

The linear footage along the front of your property line.

Financing:

Financing is arranged when you approach your bank or a mortgage company and determine the amount your banker or mortgage specialist will lend you to build a new home.

Lot:

The lot refers to the entire property or parcel where the home will be built, including municipal utility easements. The lot size is typically expressed in terms of square feet, linear feet, or acreage.

Lot (Walkout):

The lot is graded so you are able to walk directly out of your lower level and into your back yard.

Interest Rates:

This is the amount of money, stated as a percentage, which will be charged on your mortgage.

Mortgage:

This is a loan, provided by a bank or mortgage company. Like all loans, it is paid off by making payments over a period of time. Your payments go toward paying off the principal (the amount of money you borrowed) and the interest (the cost of borrowing the money).

Mortgage (Pre-Approved):

This helps by giving you a clear idea upfront of what you can afford and generally includes the amount of money you can realistically borrow to buy a home and the amount of your payments.

Municipal Building and Zoning By-laws:

These are by-laws, adopted by the municipality, which govern the construction of a home as well as the use of the land. Every homebuilder must comply with these requirements.

Model Home:

This is a home that is built for public viewing prior to finding a buyer. One advantage of purchasing a model home is that the customer does not have to wait for a new house to be built.

Offer (Firm):

A firm offer occurs when the customer and the builder enter into an Agreement of Purchase and Sale and there are no conditions listed in the agreement.

Offer (Conditional):

A customer may agree to purchase a new home subject to certain conditions being met. For example, an Agreement of Purchase and Sale can be conditional upon the customer securing proper financing for the new home.

Phase:

Developments are typically created in phases. The number of phases in each subdivision depends upon the size of the overall community and the time frame the developer has established to complete the project.

Property Tax:

Property tax is calculated on the assessed value of your house.

Restrictive Covenants:

A list of items to which all homeowners must adhere when they move into a subdivision. The height of fences, for example, and the placement of gazebos and swimming pools, may have restrictions. Not all subdivisions have restrictive covenants. A copy of any restrictive covenants should be attached to the Agreement of Purchase and Sale.

Standard Features:

This term refers to all of the standard items included with a new home.

Walk Through:

A walk through is an inspection of your new home just prior to completion. During the walk through, the builder will answer your questions, make note of deficiencies, and explain warranty information to you.

Working Drawing Review:

At this meeting, the customer and the builder review the draft plans for the home and make any required changes.