Common Terminology
Below is a list of terms that you will often hear in the context of real estate transactions and closings:
Short for Agreement of Purchase and Sale, it refers to the initial agreement that is signed by the buyer and the seller of a real property.
A Commission Statement is a document generated by a real estate brokerage which sets out the calculation of the commission and the applicable HST along with how such commission is deducted from the deposit held in trust by the brokerage. A Commission Statement will either set out a shortfall, which will need to be paid to the brokerage from closing funds, or an excess, which will be returned to the seller after closing.
Mortgage Instructions are a series of documents that a lender sends to the lawyer for the borrower. The borrower’s lawyer will follow the mortgage instructions, explain the documents to the borrower and will obtain the necessary signatures from the borrower to complete the mortgage transaction.
A Mutual Release is a document that the parties sign when they both wish to put an end to the agreement. A Mutual Release may be signed by the parties in exchange for a payment by one party to another or without the requirement to pay.
The Statement of Adjustments is a closing document prepared by the seller that sets out the exact amount that the buyer has to pay on closing.
Statement of Funds is another name for Trust Ledger which is a document that sets out the exact amount that a lawyer has received in trust for a transaction along with all of the expenditures and outgoing payments from the trust funds.
Title insurance is a policy of insurance which provides protection against damages arising from certain defects in title.
A Trust Ledger is a document that sets out the exact amount that a lawyer has received in trust for a transaction along with all of the expenditures and outgoing payments from the trust funds. A Trust Ledger is also sometimes referred to as a Statement of Funds.
