Real Estate Glossary

The total period of time it takes to pay off a mortgage in full through regular payments. In Canada, the maximum amortization period is typically 25 years for insured (high-ratio) mortgages and up to 30 years for conventional mortgages. A longer amortization lowers your monthly payments but increases the total interest paid over the life of the loan.

A professional assessment of a property's market value conducted by a licensed appraiser. Lenders in Canada typically require an appraisal before approving a mortgage to ensure the property is worth the amount being borrowed. The appraiser evaluates the property's condition, location, size, and recent comparable sales in the area.

The value assigned to a property by BC Assessment for the purpose of calculating property taxes. BC Assessment evaluates every property in British Columbia annually, with assessment notices mailed each January. The assessed value may differ from the market value and is based on the property's condition and comparable sales as of July 1 of the previous year.

An assignment sale occurs when the original buyer of a pre-construction or pre-sale property sells their purchase contract to a new buyer before the property's completion date. The new buyer (assignee) takes over the original buyer's rights and obligations under the original contract. Assignment sales are common in BC's pre-sale condo market. GST, income tax, and assignment fees may apply.

A mortgage that allows a buyer to take over (assume) the seller's existing mortgage, including its current interest rate, remaining balance, and terms. Assumable mortgages can be advantageous when the seller's rate is lower than current market rates. In Canada, the new buyer must still qualify with the lender, and not all mortgages are assumable.

A mortgage that combines the interest rate of an existing mortgage with the current market rate for additional funds, resulting in a blended (averaged) rate. This can be useful in Canada when you want to borrow more money or refinance without breaking your existing mortgage term and paying a penalty. The blended rate is typically somewhere between the old and new rates.

A short-term loan that helps homeowners bridge the financial gap when the closing date of their new home purchase falls before the closing date of their existing home sale. Bridge financing in Canada is typically arranged through your mortgage lender and covers the period between buying your new property and receiving funds from selling your current one. Interest rates and fees apply.

In BC real estate, a broker (managing broker) is a licensed professional who oversees a real estate brokerage and its agents. The managing broker ensures all transactions comply with the BC Financial Services Authority (BCFSA) regulations. A mortgage broker, by contrast, is a licensed professional who arranges mortgage financing on behalf of borrowers by shopping among multiple lenders for the best rates and terms.

A licensed real estate agent who represents the interests of the buyer in a real estate transaction. In BC, the buyer's agent owes fiduciary duties to the buyer, including loyalty, confidentiality, and full disclosure. They help with property searches, market analysis, offer preparation, negotiation, and guiding the buyer through to completion. Their commission is typically paid from the seller's proceeds.

A market condition in which there are more properties for sale than there are buyers, giving buyers greater negotiating power. In a buyer's market, homes tend to stay on the market longer, prices may decline or stagnate, and sellers are more likely to accept lower offers or make concessions. This is the opposite of a seller's market.

Canada Mortgage and Housing Corporation (CMHC) mortgage loan insurance is required when your down payment is less than 20% of the purchase price. This insurance protects the lender (not the buyer) in case of default. The premium is calculated as a percentage of the mortgage amount (ranging from 2.8% to 4.0%) and can be added to your mortgage. CMHC, Sagen, and Canada Guaranty are the three mortgage insurers in Canada.

The various fees and expenses associated with completing a real estate transaction, paid on or before the closing date. In BC, common closing costs include legal or notary fees, property transfer tax, title insurance, home inspection fees, appraisal fees, property tax adjustments, strata document fees, and mortgage arrangement fees. Buyers in BC should typically budget 1.5% to 4% of the purchase price for closing costs.

The date on which the real estate transaction is finalized. In BC, the closing date is often referred to as the "completion date" and is when the property title transfers from the seller to the buyer, the purchase funds are exchanged, and the buyer receives the keys. The possession date (when the buyer can move in) is usually the day after the completion date.

A report prepared by a REALTOR that estimates a property's market value by comparing it to similar properties (comparables) that have recently sold, are currently listed, or were listed but did not sell in the same area. A CMA considers factors such as location, size, condition, age, and features. It helps sellers price their home competitively and helps buyers make informed offers.

In BC real estate, the completion day is the date on which the sale is legally finalized. On this day, the buyer's lawyer or notary registers the transfer of title at the BC Land Title Office, the mortgage funds are advanced, and the seller receives payment. The buyer typically takes possession (gets the keys) on the "possession date," which is usually the business day following completion.

An offer to purchase a property that includes one or more conditions (subjects) that must be met before the sale becomes firm and binding. In BC, common conditions include financing approval, a satisfactory home inspection, review of the property disclosure statement, and strata document review. If the conditions are not met or removed by the deadline, the offer typically becomes void and the deposit is returned.

The legal process of transferring property ownership from one party to another in British Columbia. Conveyancing is typically handled by a notary public or lawyer who prepares and files the necessary documents with the BC Land Title Office, ensures all conditions of the sale are met, arranges for the transfer of funds, and registers the new title. Conveyancing fees in BC typically range from $1,000 to $2,500.

A housing cooperative is a form of ownership where residents purchase shares in a corporation that owns the building, rather than owning their individual units outright. In BC, co-op members have the right to occupy a specific unit and participate in the governance of the co-op. Unlike strata ownership, co-op units may have restrictions on resale, subletting, and financing, which can make them more affordable but less flexible.

A financial metric used by Canadian lenders to determine your ability to carry a mortgage. There are two types: the Gross Debt Service (GDS) ratio, which measures housing costs as a percentage of gross income (max 39%), and the Total Debt Service (TDS) ratio, which includes all debt obligations (max 44%). Both ratios are critical in the Canadian mortgage qualification process.

A decrease in a property's value over time due to wear and tear, age, or obsolescence. While land in BC typically appreciates, the building or structure on it may depreciate. For investment properties, the Canada Revenue Agency (CRA) allows owners to claim Capital Cost Allowance (CCA) as a tax deduction for depreciation, though this is recaptured upon sale.

The portion of a property's purchase price that the buyer pays upfront, with the remainder financed through a mortgage. In Canada, the minimum down payment is 5% for homes priced up to $500,000, 10% for the portion between $500,001 and $1,499,999, and 20% for homes priced at $1,500,000 or more. A down payment of less than 20% requires mortgage loan insurance (CMHC, Sagen, or Canada Guaranty).

A situation where one real estate agent or brokerage represents both the buyer and the seller in the same transaction. Dual agency is restricted in British Columbia under BCFSA regulations because of the inherent conflict of interest. As of June 2018, designated agency and limited dual agency are regulated, and agents must disclose the relationship and obtain informed written consent from both parties.

A legal right that allows someone other than the property owner to use a specific portion of the property for a defined purpose. In BC, common easements include utility easements (for power lines, water, or sewer access), rights-of-way for neighbouring properties, and statutory rights-of-way granted to municipalities. Easements are registered on the property's title at the BC Land Title Office and transfer with the property upon sale.

Any claim, lien, charge, or liability attached to a property that may affect its title or reduce its value. In BC, common encumbrances include mortgages, easements, restrictive covenants, property tax liens, and judgments. A title search conducted through the BC Land Title Office reveals all registered encumbrances on a property before purchase.

The difference between a property's current market value and the outstanding balance of all mortgages and liens against it. For example, if your BC home is worth $800,000 and you owe $500,000 on your mortgage, you have $300,000 in equity. Homeowners can access equity through refinancing or a home equity line of credit (HELOC). Equity grows as you pay down your mortgage and as property values increase.

An arrangement in which a neutral third party holds funds or documents on behalf of the buyer and seller until specific conditions of a transaction are met. In BC real estate, the buyer's deposit is typically held in trust (escrow) by the listing brokerage or the buyer's brokerage until the transaction completes or falls through. The funds are then disbursed according to the terms of the contract.

The estimated price at which a property would sell under normal conditions between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts and neither being under pressure to act. Fair market value is determined by factors such as location, property condition, recent comparable sales, and current market conditions in BC.

A person purchasing their first home. In BC and Canada, first-time buyers may qualify for several incentives, including the BC First-Time Home Buyers' Property Transfer Tax Exemption (on homes up to $835,000), the federal First-Time Home Buyer Incentive, the Home Buyers' Plan (HBP) allowing RRSP withdrawals up to $60,000, the First Home Savings Account (FHSA), and the federal Home Buyers' Tax Credit.

A mortgage where the interest rate remains constant for the entire term of the mortgage (e.g., 1, 2, 3, 5, 7, or 10 years). This provides predictable, consistent payments throughout the term. In Canada, most mortgage terms range from 1 to 5 years, after which the mortgage is renewed at the prevailing rate. Fixed rates are popular for buyers who prefer payment stability and protection against rate increases.

A legal process through which a lender takes possession of a property when the borrower fails to make mortgage payments. In BC, foreclosure proceedings go through the Supreme Court of British Columbia. The court may grant an Order Nisi (giving the borrower a redemption period to pay the outstanding amount) or an Order Absolute (transferring the property to the lender). BC foreclosure processes can take several months to over a year.

The professional association that serves REALTORS working in the Fraser Valley region of BC, including Surrey, White Rock, Langley, Abbotsford, and Mission. FVREB operates the MLS system for the region, provides market statistics, and upholds professional standards. The FVREB is one of the largest real estate boards in Canada by transaction volume.

The percentage of your gross household income required to cover housing costs, including mortgage payments (principal and interest), property taxes, heating costs, and 50% of strata/condo fees if applicable. Canadian lenders generally require a GDS ratio of 39% or less to qualify for a mortgage. The GDS ratio is one of two key affordability metrics used in the Canadian mortgage stress test.

A person who agrees to be legally responsible for another person's mortgage debt if the borrower defaults. In Canada, a guarantor's income and credit are used to strengthen the mortgage application, but the guarantor does not appear on the property title. This is different from a co-signer, who is on both the mortgage and the title. Guarantors are commonly parents helping their children qualify for a first home.

In Canada, the Goods and Services Tax (GST) of 5% applies to the purchase of newly constructed homes, substantially renovated homes, and vacant land purchased from a builder. In BC, there is no provincial sales tax (PST) on new homes, but the federal GST applies. Buyers may qualify for the GST New Housing Rebate, which refunds a portion of the GST for homes priced under $450,000. Resale homes are generally exempt from GST.

A mortgage where the borrower's down payment is less than 20% of the property's purchase price, resulting in a loan-to-value (LTV) ratio greater than 80%. In Canada, high-ratio mortgages require mortgage loan insurance from CMHC, Sagen, or Canada Guaranty. The insurance premium ranges from 2.8% to 4.0% of the mortgage amount, depending on the LTV ratio, and is typically added to the mortgage balance.

A thorough examination of a property's physical condition conducted by a licensed home inspector. In BC, home inspectors must be licensed under the Business Practices and Consumer Protection Act. The inspection typically covers the structure, roof, plumbing, electrical, HVAC, insulation, and foundation. In BC, making an offer subject to a satisfactory home inspection is one of the most common conditions (subjects) in purchase contracts.

In BC, new homes are covered by mandatory warranty protection under the Homeowner Protection Act. The BC new home warranty provides 2 years on labour and materials, 5 years on the building envelope (including water penetration), and 10 years on the structure. This warranty is provided by licensed warranty providers and is mandatory for all new residential construction in British Columbia. Resale home warranties are optional and typically cover major systems and appliances.

The cost of borrowing money, expressed as a percentage of the mortgage principal. In Canada, mortgage interest rates can be fixed (locked in for the term) or variable (fluctuating with the lender's prime rate). The Bank of Canada's overnight rate influences prime rates, which in turn affect variable mortgage rates. When comparing mortgages, always consider both the interest rate and the annual percentage rate (APR), which includes additional fees.

A prepayment penalty calculation used by Canadian lenders when a borrower breaks a fixed-rate mortgage before the end of its term. The IRD is calculated as the difference between your current mortgage rate and the rate the lender can now charge for a mortgage with a term similar to the time remaining on your existing mortgage, applied to your outstanding balance. IRD penalties can be significant and vary widely between lenders.

A form of property ownership in BC where two or more people hold equal, undivided interest in the property with the right of survivorship. This means that if one owner passes away, their share automatically transfers to the surviving owner(s) without going through probate. Joint tenancy is the most common form of co-ownership between spouses in BC. All joint tenants must acquire their interest at the same time and through the same document.

The official legal document registered at the BC Land Title Office that confirms ownership of a property. British Columbia uses the Torrens system of land registration, which provides guaranteed, indefeasible title. The land title shows the registered owner(s), legal description of the property, and any charges, liens, or encumbrances. Title searches are an essential part of every real estate transaction in BC.

A legal claim registered against a property as security for a debt. In BC, common types of liens include mortgage liens, builders' liens (filed by contractors or subcontractors who are owed payment for work performed), tax liens (for unpaid property taxes), and judgment liens. Liens must typically be cleared before a property can be sold with clean title. Builders' liens in BC must be filed within specific time limits under the Builders Lien Act.

A legally binding contract between a property owner and a real estate brokerage that authorizes the brokerage to market and sell the property. In BC, listing agreements specify the listing price, commission rate, marketing plan, term of the listing, and the rights and obligations of both parties. The most common type is an exclusive listing, which gives one brokerage the sole right to sell the property for the specified period.

The ratio of the mortgage amount to the appraised value or purchase price of the property (whichever is lower), expressed as a percentage. For example, if you purchase a $500,000 home with a $400,000 mortgage, your LTV is 80%. In Canada, an LTV above 80% (down payment less than 20%) requires mortgage loan insurance. LTV is a key factor in determining your mortgage terms and interest rate.

A cooperative system used by Canadian real estate boards and associations to share property listing information among REALTORS. In BC, the MLS is operated by regional real estate boards such as the Fraser Valley Real Estate Board and the Real Estate Board of Greater Vancouver. Properties listed on the MLS are displayed on REALTOR.ca, the national property search website. The MLS system ensures broad market exposure for sellers and comprehensive search access for buyers.

A licensed professional who acts as an intermediary between borrowers and mortgage lenders. In BC, mortgage brokers are regulated by BCFSA and must hold a sub-mortgage broker licence. Unlike bank mortgage specialists who offer only their institution's products, mortgage brokers shop among multiple lenders (banks, credit unions, trust companies, and private lenders) to find the best rates and terms for your specific situation. Their services are typically free to the borrower.

A written commitment from a lender confirming the maximum mortgage amount you qualify for, along with a guaranteed interest rate typically held for 60 to 120 days. In Canada, pre-approval involves a credit check, income verification, and review of your financial situation. Pre-approval gives buyers confidence in their budget and strengthens their offers in competitive markets. It differs from pre-qualification, which is a less formal estimate.

The length of time your mortgage contract and interest rate are in effect with your lender. In Canada, the most common mortgage term is 5 years, though terms can range from 6 months to 10 years. At the end of each term, you must renew your mortgage (potentially at a different rate and with a different lender) or pay off the remaining balance. The mortgage term is different from the amortization period, which is the total time to pay off the full mortgage.

The total value of your assets (including property, investments, savings, and other valuables) minus your total liabilities (including mortgages, loans, credit card debt, and other obligations). Canadian lenders may consider your net worth when assessing mortgage applications, particularly for self-employed borrowers or higher-value properties. Growing your net worth through real estate equity is a common long-term wealth-building strategy.

A brand-new property that has never been occupied, purchased directly from a builder or developer. In BC, new construction homes are covered by mandatory 2-5-10 warranty protection under the Homeowner Protection Act. Buyers should be aware that GST (5%) applies to new construction purchases, and the purchase process differs from resale, often involving developer contracts, deposit structures, and longer timelines. New construction also requires an occupancy permit from the local municipality.

In British Columbia, a notary public is a legal professional authorized to handle real estate conveyancing (property transfers), mortgage documentation, and other non-contentious legal matters. BC notaries can prepare and execute property transfer documents, mortgage documents, and refinancing paperwork. They are regulated by the BC Society of Notaries Public and are a cost-effective alternative to lawyers for straightforward real estate transactions.

A formal, written proposal from a buyer to purchase a property at a specified price and under specified terms and conditions. In BC, offers are typically made using the standard Contract of Purchase and Sale form. An offer can be accepted, rejected, or countered by the seller. Once both parties sign and all conditions are met, the offer becomes a legally binding contract. Multiple offers may be received simultaneously in competitive markets.

A scheduled period during which a property listed for sale is open for prospective buyers to view without a private appointment. In BC, open houses are a common marketing strategy used by listing agents to attract buyers. They can be held on weekdays (broker open houses for other agents) or weekends (public open houses). Open houses allow buyers to tour the home, ask questions, and assess the property and neighbourhood firsthand.

A mortgage that can be paid off in full or in part at any time without incurring a prepayment penalty. Open mortgages in Canada offer maximum flexibility but typically carry higher interest rates than closed mortgages. They are ideal for buyers who plan to sell soon, expect a large lump-sum payment, or want the freedom to refinance or switch lenders at any time. Most Canadian lenders offer both open and closed mortgage options.

In British Columbia, a Personal Real Estate Corporation (PREC) allows a licensed REALTOR to incorporate and provide real estate services through a corporation. The PREC must be wholly owned by the individual licensee and is regulated by BCFSA. PRECs offer tax planning advantages for real estate professionals, including income splitting and tax deferral opportunities. The REALTOR remains personally responsible for their professional obligations.

See Mortgage Pre-Approval. A formal process in which a lender evaluates your financial information (income, credit, assets, debts) and provides a written commitment for a specific mortgage amount and interest rate. Pre-approval in Canada typically involves a hard credit check and is more thorough than a pre-qualification. Having a pre-approval letter strengthens your position when making offers and gives you clarity on your budget.

The original amount of money borrowed through a mortgage, or the remaining outstanding balance of the mortgage excluding interest. Each mortgage payment in Canada is split between principal and interest. In the early years of a mortgage, a larger portion of each payment goes toward interest, with the principal portion increasing over time. Reducing your principal faster (through lump-sum payments or increased payment frequency) saves significant interest over the life of the mortgage.

A provincial tax paid when purchasing real estate in British Columbia. The tax is calculated as 1% on the first $200,000 of the fair market value, 2% on the portion from $200,001 to $2,000,000, 3% on the portion from $2,000,001 to $3,000,000, and 5% on amounts exceeding $3,000,000. First-time home buyers may qualify for a full exemption on properties up to $835,000 or a partial exemption up to $860,000. An additional 2% tax applies to residential properties over $3,000,000 (the "Further" PTT).

An annual tax levied by municipalities in BC based on a property's assessed value. Property taxes fund local services including schools, roads, parks, fire and police services. In BC, property tax rates vary by municipality and are applied to the assessed value determined by BC Assessment. The provincial Home Owner Grant can reduce property taxes for eligible homeowners by up to $570 (basic grant) or $845 (for seniors, veterans, and persons with disabilities) on their principal residence.

A licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to a strict Code of Ethics and Standards of Business Practice. In BC, REALTORS must be licensed by BCFSA and are members of their local real estate board (such as the Fraser Valley Real Estate Board or the Real Estate Board of Greater Vancouver). The term REALTOR is a registered trademark that distinguishes members from other real estate licensees.

The process of replacing an existing mortgage with a new one, typically to take advantage of lower interest rates, access home equity, consolidate debts, or change mortgage terms. In Canada, refinancing may involve prepayment penalties on your current mortgage (especially with fixed-rate mortgages), appraisal fees, and legal costs. You can refinance up to 80% of your property's appraised value. Refinancing is best evaluated by comparing the total cost of penalties and fees against the savings from the new mortgage terms.

A contractual right that gives a specified party the first opportunity to purchase a property before the owner can sell it to someone else. In BC, rights of first refusal are sometimes found in strata bylaws (giving the strata corporation the right to approve or refuse a sale), commercial leases, and family property agreements. If the holder declines to exercise the right, the property can then be sold to another buyer on the same or better terms.

A market condition in which there are fewer properties for sale than there are buyers, giving sellers greater negotiating power. In a seller's market, homes tend to sell quickly (often with multiple offers), prices rise, and buyers may need to offer above asking price or waive conditions to compete. Metro Vancouver and the Fraser Valley have experienced significant seller's market conditions during periods of low inventory and high demand.

A form of property ownership in British Columbia governed by the Strata Property Act, where individual owners hold title to their specific unit (strata lot) while sharing ownership of common property such as hallways, lobbies, gardens, recreational facilities, and building systems. Strata properties include condominiums, townhomes, and some duplexes. Each strata corporation is governed by a strata council elected by the owners, and decisions are made at Annual and Special General Meetings.

Monthly fees paid by strata lot owners to the strata corporation to cover the cost of maintaining and managing common areas and shared expenses. In BC, strata fees typically include building insurance, maintenance and repairs, landscaping, utilities for common areas, and contributions to the contingency reserve fund (CRF). Strata fees vary widely depending on the building's age, size, amenities, and condition. Reviewing the strata's financial statements, minutes, and depreciation report before purchasing is essential.

Clauses included in a BC purchase offer (Contract of Purchase and Sale) that must be satisfied before the sale becomes firm and binding. Common subjects include: subject to financing approval, subject to a satisfactory home inspection, subject to review of the property disclosure statement, subject to review of strata documents, and subject to the buyer's lawyer or notary's approval. The buyer typically has a specified number of business days to remove subjects. If subjects are not removed by the deadline, the offer becomes void.

A professional measurement and mapping of a property's boundaries, dimensions, and features conducted by a licensed BC land surveyor. A survey certificate shows the exact location of buildings, fences, driveways, and easements in relation to the property lines. In BC, surveys are not always required for a real estate transaction if title insurance is obtained instead, but they are recommended for detached homes and properties where boundary questions exist.

The percentage of your gross household income required to cover all debt obligations, including housing costs (mortgage payments, property taxes, heating, and 50% of strata fees) plus all other debts (car loans, credit card payments, student loans, lines of credit, and other obligations). Canadian lenders generally require a TDS ratio of 44% or less to qualify for a mortgage. The TDS ratio is used alongside the GDS ratio in the mortgage stress test.

A form of property ownership in BC where two or more people hold title to a property, each with a defined share (which may be equal or unequal) that can be sold, transferred, or bequeathed independently. Unlike joint tenancy, there is no right of survivorship, meaning each owner's share passes to their estate or designated beneficiaries upon death, not automatically to the other co-owners. Tenants in common is commonly used by friends, investment partners, or family members who want distinct ownership shares.

A one-time insurance policy purchased at closing that protects property owners and lenders against losses related to the property's title or ownership. In BC, title insurance covers issues such as title fraud, errors in surveys or public records, encroachments, unknown liens, zoning non-compliance, and defects that existed before the policy date. It is an alternative to obtaining a new survey and remains in effect as long as you own the property. Premiums in BC typically range from $250 to $500 for a residential property.

An examination of the public records at the BC Land Title Office to confirm the legal ownership of a property and identify any registered charges, liens, easements, covenants, or encumbrances against the title. In BC, your lawyer or notary conducts a title search as part of the conveyancing process to ensure you are receiving clear title. The search reveals the current state of title and any issues that must be resolved before the transaction can close.

The process by which a mortgage lender evaluates the risk of lending to a borrower and determines the terms of the loan. In Canada, underwriting involves a thorough review of the borrower's credit history, income and employment verification, debt ratios (GDS and TDS), the property's appraised value, and the down payment source. The underwriter ensures the application meets the lender's guidelines and, for insured mortgages, the insurer's requirements. This step must be completed before final mortgage approval is granted.

A mortgage where the interest rate fluctuates based on the lender's prime rate, which is influenced by the Bank of Canada's overnight lending rate. In Canada, variable-rate mortgages may have fixed payments (where the proportion going to interest vs. principal changes) or adjustable payments (where the payment amount itself changes with rate fluctuations). Variable rates typically start lower than fixed rates but carry the risk of increasing over time. Most variable-rate mortgages in Canada have a 5-year term.

A financing arrangement in which the property seller (vendor) acts as the lender, providing a mortgage to the buyer for a portion of the purchase price. The buyer makes payments directly to the seller rather than to a traditional lender. In Canada, vendor take-back mortgages are sometimes used when the buyer has difficulty obtaining conventional financing, or as a negotiation tool to facilitate the sale. The terms, interest rate, and repayment schedule are negotiated between the buyer and seller.

A numerical rating from 0 to 100 that measures the walkability of a location based on its proximity to amenities such as grocery stores, restaurants, schools, parks, and transit. A score of 90-100 is considered a "Walker's Paradise," 70-89 is "Very Walkable," 50-69 is "Somewhat Walkable," and below 50 is "Car-Dependent." Walk Score is frequently referenced in BC real estate listings and is a useful tool for evaluating neighbourhoods, especially in urban areas like Vancouver, Burnaby, and White Rock's town centre.

A guarantee or assurance regarding the condition of a property. In BC, new homes are covered by mandatory warranty protection under the Homeowner Protection Act, providing 2 years on labour and materials, 5 years on the building envelope, and 10 years on the structural components. For resale properties, optional home warranty plans are available that cover the repair or replacement of major home systems (heating, plumbing, electrical) and appliances for a specified period after purchase, typically one year.