buyingimages.kw.com/docs/1/1/0/110290/...packet_combined.pdf · the real estate commission after we...

Welcome!You are about to embark on the exciting journey of finding your ideal home.Whether it is your first home or your tenth home, a retirement home, or an investmentproperty, I will make your home-buying experience fun and exciting. I can help youfind the ideal home with the least amount of hassle; and I am devoted to using myexpertise and the full resources of my office to achieve these results!Purchasing a home is a very important decision and a big undertaking in your life.In fact, most people only choose a few homes in their lifetime. I am going to makesure that you are well equipped and armed with up-to-date information for your bigdecision. I am even prepared to guide you through every phase of the home-buyingprocess. This packet gives you helpful information during and after your transaction.Use its reference pages, note pages and agency explanations, as an invaluable guideon your home-buying journey.Please keep this packet with you during your home-buying process. There are pagesthat contain important phone numbers and dates and areas for notes to help you stayorganized.

So let’s take an exciting journey together! I look forward to meeting your real estateneeds every step of the way!

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919-219-2703 l 201 Shannon Oaks Circle. Cary, NC 27511 l [email protected] l myers.yourkwagent.com

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Your Home Search

I love helping buyers find their dream home. That’s why I work with each client individually, tak-ing the time to understand their unique lifestyles, needs and wishes. This is about more than a cer-tain number of bedrooms or a particular ZIP code. It’s about your life, and it’s important to me.

When you work with me, you get:

A knowledgeable and professional REALTOR A committed ally to negotiate on your behalf The backing of a trusted company, Keller Williams Realty

I have the systems in place to streamline the home-buying process for you. As part of my service, Iwill commit to helping you with your home search by:

Previewing homes in advance on your behalf Personally touring homes and neighborhoods with you Keeping you informed of new homes on the market Helping you preview homes on the Web Advising you of other homes that have sold and for how much Working with you until we find the home of your dream

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My 10+ Customer Service Commitment

As the REALTOR® you have chosen to exclusively represent you in the purchase of your new home,I promise that I will:

1.Provide you with 10+ customer service during the entire buying process.

2. Organize and schedule your home search process.

3. Discuss the benefits and drawbacks of each home in relation to your specific needs.

4. Provide you with on-going updates on available homes.

5. Help you to compare homes and make a decision.

6. Advise you on the terms and issues of the offer and fill out the purchase offer contract.

7. Present your offer and negotiate on your behalf.

8. Coordinate and supervise the preparation of all closing documents and guide you through the clos-ing process.

9. Help you resolve any closing issues.

10. Coordinate move-in and assist with any post-closing issues.

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What buyers should know….

In order to maximize my service to you, I want to share some important information about the real estate relation-ship and how I manage my business.

I am licensed in the state of North Carolina and adhere to the North Carolina Real Estate Commission code ofconduct and to the high standards of professionalism expected by Keller Williams Realty. I can show you any homeor land that is available for sale in the triangle listing service listed by all real estate companies. I can show younew home communities or homes listed for sale by owner.

This is most important for buyers to understand, I am compensated on a commission basis and receive my share ofthe real estate commission after we have closed on your home. The commission is paid by the seller and is sharedby the listing company, the listing agent, the selling company and the buyer’s agent. I would appreciate the oppor-tunity to represent you as your buyer’s agent or, if we purchase a home listed by Keller Williams, as a dual agent.Together, we will review forms that disclose agency and further explain the relationship between you, the buyer,and me, your agent.

Proud to be affiliated with Keller Williams Realty, I am supported by a team of specialists who contributeultimate service and commitment to you and me throughout the home purchase process.

I ask for your loyalty. By working together, we will form a team. I pledge to give you 100% of my abilities,resources, skills and expertise in return for your loyalty.

Rely on me exclusively, call me when you see a property you wish to visit. If I am not available, please leave amessage and I will return your call promptly. Together, we will be successful in finding and securing that perfecthome for you.

Thank you,

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We can help you buy a home…..every step of the way!

Establish a relationshipThe law requires that before we can begin our relationship, we need to review the working with real estate agents brochure! This bro-chure explains who represents the seller, who represents the buyer, and what happens if both buyer and seller are represented by kellerWilliams agents. It is a standard real estate form and was created by the north Carolina bar association and the north Carolina realestate commission. I will explain and simplify this form and answer any questions you have about it.

Let’s get started in the right directionWe will talk about all the services my team and I will extend to you as a buyer’s client. After that we will complete a buyer needs survey,which will help me understand what you are looking for and where you want to be in respect to location and price point. Price point willbe determined firstly by being pre-qualified and later pre-approved by a lender, and by discussing your comfort level in monthly paymentand price. By doing both of these steps we insure that we are looking at the right homes for you.

Let’s see a houseHouse hunting can be fun, but it can be time consuming as well. My job as your buyer’s agent is to show you only the homes that meetyour needs (as we talked about in the buyer’s survey). We accomplish this by me doing the legwork for you….. By searching through thou-sands of homes for sale in our TMLS system so your time is only spent looking at homes which match your criteria.

We found the houseThe day will come that we find the perfect house. At this point, I will provide you helpful background information on the home andneighborhood. This information will help guide you in determining what terms and conditions you want me to present for your offer.The process can be a series of offers and counteroffers, in which I will handle the preparations, delivery and negotiations on your behalf.This saves you from having to deal with the seller or the seller’s agent directly.

We have a contractAt this point, many people think their real estate job is done; however, this is where most of the work begins. I will start the task of coordi-nating your transactions which include: Home inspection, termite, scheduling a survey for the property, radon test, home warranty, home-owners insurance and all information to provide for the closing attorney. Having a support team behind me that specializes in this in-sures no details forgotten along the way and closing will be coordinated and stress-free.

Congratulations….closing!Have your pen handy! We will meet at the closing attorney’s office and review all the mortgage and closing documentation. I will bethere to answer any questions you may have, you will sign all the necessary paperwork, and most importantly we will share in the excite-ment of you purchasing your new home. Any funds brought to closing will need to be certified or a bank check.

After closing!You will hear from me even after you close on your home, because I want to continue our relationship. If you have any real estate ques-tions please give me a call….always happy to hear from you! I would love the opportunity to give the same great service to your friends,family members, co-workers, etc, so feel free to pass my name and number along to anyone you know who is considering buying or sellinga home.

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Home Buying PacketThe Ten CommandmentsWhen Applying for a Real Estate Loan

1. Thou shalt not change jobs, become self-employed or quit your job.

2. Thou shalt not buy a car, truck or van (or you may be living in it)!

3. Thou shalt not use charge cards excessively or let your accounts fall behind.

4. Thou shalt not spend money you have set aside for closing.

5. Thou shalt not omit debts or liabilities from your loan application.

6. Thou shalt not buy furniture.

7. Thou shalt not originate any inquiries into your credit.

8. Thou shalt not make large deposits without first checking with your loan officer.

9. Thou shalt not change bank accounts.

10. Thou shalt not co-sign a loan for anyone.

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Home Buying PacketHow to Buy a Great House

There are many factors to consider when selecting a neighborhood that is right for you. Below are just a few of themany factors -- you may think of others that are important to you.

Neighborhoods have characteristic personalities designed to best suit single people, growing families, two-career cou-ples, or retirees.

SCOUT THE NEIGHBORHOOD!It is important that you scout the neighborhood in person. You live in more than your house. Talk to people who live there. Drive through the entire area at different times of the day, during the week and on weekends. Look carefully at how well other homes in the area are being maintained; are they painted, are the yards well

cared for; are parked cars in good condition, etc.

NEIGHBORHOOD FACTORS TO CONSIDER --

Look for things like access to major thoroughfares, highways, and shopping. Listen for noise created by commerce, roads, railways, public areas, schools, etc. Smell the air for adjacent commerce or agriculture. Check with local civic, police, fire, and school officials to find information about the area. Research things like soil and water. Look at traffic patterns around the area during different times of the day and drive from the area to work. Find out if the neighborhood is near parks, churches, recreation centers, shopping, theaters, restaurants, public

transportation, schools, etc. Find out if the neighborhood belongs to a Homeowner’s Association

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Making An Offer

Once you have found the home you wish to purchase, you will need to determine what offer you are willing to makefor the home. It is important to remember that the more competition there is for the home, the higher the offershould be – sometimes even exceeding the asking price. Remember, be realistic. Make offers you want the otherparty to sign!To communicate your interest in purchasing a home, we will present the listing agent with a written offer. Whenthe seller accepts an offer it becomes a legal contract. When you write an offer you should be prepared to pay anearnest money deposit. This is to guarantee that your intention is to purchase the property.After we present your offer to the listing agent it will either be accepted, rejected, or the seller will make a counter-offer. This is when we will negotiate terms of the contract if necessary.The step-by-step contract procedure for most single-family home purchases is standard. The purchase agreementused is a standard document approved by our local real estate board.The purchase agreement or contract constitutes your offer to buy and, once accepted by the seller, becomes a valid,legal contract. For this reason, it is important to understand what is written on the contract offer. I have includ-ed a copy in this packet.

PriceWhat you offer on a property depends on a number of factors including its condition length of time on the market,buyer activity and the urgency of the seller. While some buyers want to make a low offer just to see if the seller ac-cepts, this often isn’t a smart choice, because the seller may be insulted and decide not to negotiate at all.

The Move-In DateIf you can be flexible on the possession date, the seller will be more apt to choose your offer over others.

Additional PropertyOften, the seller plans on leaving major appliances in the home; however, which items stay or go is often a matterof negotiation.

Typically, you will not be present at the offer presentation—we will present it to the listing agent and/or sell-er. The seller will then do one of the following:

Accept the offer Reject the offer Counter the offer with changes

When a counteroffer is presented, you and I will work together to review each specific area of it,making sure that we move forward with your goals in mind and ensuring that we negotiate thebest possible price and terms on you behalf.

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We have a contract……Now that you have decided to buy your home, what happens between now and the time you legally own the home? A TitleCompany may handle the following items. NOTE: In different parts of the country, attorneys, lenders, escrow companiesand other persons who are independent of title companies perform some or all of these functions.

Earnest MoneyAn agreement to convey starts the process once it is received at the Title Company. Once you submit the loan application, it isusually subject to a credit check, an appraisal, and sometimes, a survey of the property.

Tax CheckWhat taxes are owed on the property? The Title Company contacts the various assessor-collectors.

Title SearchCopies of documents are gathered from various public records: deeds, deeds of trust, various assessments and matters of pro-bate, heirship, divorce, and bankruptcy are addressed.

ExaminationVerification of the legal owner and debts owed.

Document PreparationAppropriate forms are prepared for conveyance and settlement.

SettlementAn Escrow Officer oversees the closing of the transaction: seller signs the deed, you sign a new mortgage, the old loan is paidoff and the new loan is established. Seller, agents, attorneys, surveyors, Title Company, and other service providers for theparties are paid. Title insurance policies will then be issued to you and your lender.

Title InsuranceThere are two types of title insurance:-Coverage that protects the lender for the amount of the mortgage,-Coverage that protects the equity in the property.

Both you and your lender will want the security offered by title insurance. Why?Title agents search public records to determine who has owned any piece of property, but these records may not reflect irregu-larities that are almost impossible to find. Here are some examples: an unauthorized seller forges the deed to the property; anunknown, but rightful heir to the property shows up after the sale to claim ownership; conflicts arise over a will from a de-ceased owner; or a land survey showing the boundaries of your property is incorrect.

For a one-time charge at closing, title insurance will safeguard you against problems including those events an exhaustivesearch will not reveal.

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Pre-Qualification and Pre-Approval

Many buyers apply for a loan and obtain approval before they find the home they want to buy. Why?Pre-qualifying will help you in the following ways:

Generally, interest rates are locked in for a set period of time. You will know in advance exactly what your payments will be on offersyou choose to make.

You won’t waste time considering homes you cannot afford.Pre-approval will help you in the following ways:

A seller may choose to make concessions if they know that your financing is secured. You are like a cash buyer, and this may make youroffer more competitive.

You can select the best loan package without being under pressure.

HOW MUCH CAN YOU AFFORD?There are three key factors to consider:

The down paymentYour ability to qualify for a mortgage

The closing costs associated with your transaction.

DOWN PAYMENT REQUIREMENTS:Most loans today require a down payment of between 3.5% and 5.0% depending on the type and terms of the loan. If you are able tocome up with a 20-25% down payment, you may be eligible to take advantage of special fast-track programs and possibly eliminate

mortgage insurance.

CLOSING COSTS:You will be required to pay fees for loan processing and other closing costs. These fees must be paid in full at the final settlement, unless

you are able to include them in your financing. Typically, total closing costs will range between 2-5% of your mortgage loan.

QUALIFYING FOR THE MORTGAGE:Most lenders require that your monthly payment range between 25-28% of your gross monthly income. Your mortgage payment to the

lender includes the following items:The principal on the loan (P)The interest on the loan (I)

Property taxes (T),The homeowner’s insurance (I).

Your total monthly PITI and all debts (from installments to revolving charge accounts) should range between 33-38% of your grossmonthly income. These key factors determine your ability to secure a home loan: Credit Report, Assets, Income, and Property Value.

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Pre-Approval vs. Pre-Qualification

Pre-ApprovalA written commitment issued by a lender after a comprehensive analysis of the creditworthiness of the applicant,including verification of income, resources, and other such matters as is typically done as part of a normal creditevaluation program.Conditioned upon the following:1. Identification of a suitable property2. No material change in the applicant's financial condition or creditworthiness prior to closing3. Limitations not related to the financial condition of creditworthiness of the applicant that a lender ordinarilyattaches to a traditional mortgage application, such ascompletion of a home inspection, acceptable title insurance binder, certification of clear termite inspections, etc.The issuance of a pre-approval letter implies that a credit decision has been rendered and a mortgage commitmentletter is available which also means that the loan has been submitted to underwriting.

Pre-QualificationThe estimation of your borrowing power from a lender and can beaccomplished with a simple phone call. The pre-qualification is based on:1. Income and debt levels that you provide to a lender.2. Possibly (but not always) a credit check.A pre-qualification is a determination on whether the prospective loan applicant would likely qualify for creditunder a lender's programs and standards, or a determination on the amount of credit the prospective applicantwould likely qualify.

Which is better?

The pre-approval is a more complete and formalized process where the borrower actually meets with the lenderand supplies him with the last 2 years income tax returns, bank statements, W2’s, etc. The lender asks about em-ployment and runs a credit report.A pre-approval helps take the guesswork out of buying. There is a firm figure that you, the purchaser and sellercan work with in confidence. Securing the commitment from the mortgage company is much closer to reality witha pre-qualification than with a pre-approval - which is of tremendous benefit during deal negotiations. By speak-ing with a lender, affordability parameters and appropriate loan programs are identified. Details such as theamount of cash required to close are also determined which is essential information for the purchaser of theproperty.

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What is a “Closing?”

A “closing” is where you and I meet with some or all of the following individuals: the Seller, the Seller’s agent, arepresentative from the lending institution and a representative from the title company, in order to transfer theproperty title to you. The purchase agreement or contract you signed describes the property, states the purchaseprice and terms, sets forth the method of payment, and usually names the date and place where the closing or actualtransfer of the property title and keys will occur.

If financing the property, your lender will require you to sign a document, usually a promissory note, as evidencethat you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on theproperty as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell theproperty if you fail to make the payments. Before you exchange these papers, the property may be surveyed, ap-praised, or inspected, and the ownership of title will be checked in county and court records.

At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a Cash-ier’s Check. Your agent or escrow officer will notify you of the exact amount at closing.

WHAT IS AN ESCROW ACCOUNT?

An escrow account is a neutral depository held by your lender for funds that will be used to pay expenses incurredby the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due inthe future. You will pay one-twelfth of the annual amount of these bills each month with your regular mortgagepayment. When the bills fall due, the lender pays them from the special account. At closing, it may be necessary topay enough into the account to cover these amounts for several months so that funds will be available to pay thebills as they fall due.

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FYI-

Keep detailed records of all moving expenses if your move is job related. Many expens-es, including house-hunting trips, are tax deductible. If your move is 35 miles or morefrom your home, you can deduct your family’s travel expenses, including meals and lodg-ing; the cost of transporting furniture, other household goods and personal belongings;food and hotel bills for up to 30 days in the new city if you have to wait to move intoyour new home; and the costs associated with selling your old home or leasing your newhome.

Note:There is a ceiling on deductions which is outlined in detail in the IRS’s Publication 521,“Tax Information on Moving Expenses,” available free from the IRS offices.

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Home Inspection and How it Affects You

Once a contract is formed between both seller and buyer. The buyer may request a home inspection at the buyersexpense. This is the buyers opportunity to find specific problems and have these problems addressed so that they areperforming the function for which intended.

Foundations and Foundation walls Basement or crawl space Floor, wall and roof structures Roof structure Heating and Cooling systems Plumbing, water heater, plumbing fixtures Electrical Kitchen and Appliances Ventilation (crawl, attic, dryer, etc.) Floors (carpet, hardwood, vinyl, ceramic) Walls and ceilings Stairs, balconies, and rails Fireplaces and chimneys Doors (interior and exterior) Windows and skylights Attic Insulation (all) Roofing and Flashing Gutters, downspouts, drains, etc. Exterior wall coverings and trim Garages, carports, etc. Porches, decks, steps, nails, etc. Grading and drainage Sidewalks, driveway, patio, etc. Retaining walls Trees, shrubbery, etc. Outbuildings, if any

Once the inspection is complete and the buyer receives a copy of the inspection report, they havethe right to ask the seller to fix any/all problems listed on the inspection report. If the sellerrefuses to fix what the buyer ask, then the buyer has the right to cancel the contract withoutbeing penalized and will be refunded entire earnest money check.

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NEW HOME WARRANTIES

When you purchase a newly built home, the builder usually offers somesort of full or limited warranty on things such as the quality of design,materials, and workmanship. These warranties are usually for a periodof one-year from the purchase of the home.

At closing, the builder will assign to you the manufacturer’s warrantiesthat were provided to the builder for materials, appliances, fixtures, etc.For example, if your dishwasher were to become faulty within one yearfrom the purchase of your newly built home, you would call the manu-facturer of the dishwasher – not the builder.

If the homebuilder does not offer a warranty, BE SURE TO ASK WHY!

RESALE HOME WARRANTIES

When you purchase a resale home, you can purchase warranties that willprotect you against most ordinary flaws and breakdowns for at least thefirst year of occupancy. The warranty may be offered by either the Sell-er, as part of the overall package, or by the agent. Even with a warranty,you should have the home carefully inspected before you purchase it.

A home warranty program will give you peace of mind, knowing thatthe major covered components in your home will be repaired if neces-sary. Ask me for more details about home warrantypackages.

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Home Warranties Can Aid Both Buyer and Seller

Many home purchasers erroneously assume that the Seller is always somehow liablewhen there is a defect or failure found in the home’s cooling, heating, plumbing, elec-trical and/or appliances after the Buyer moves in. Unless otherwise provided for inthe contract however, risk of loss often falls on the Buyer. Even where the contractprovides that heating, plumbing, pool & equipment, electrical, etc. be “operative” onor until date of possession, disputes can always arise as to when the breakdown oc-curred, who is responsible, how the repairs are to be funded, and when they are to bemade.Home warranty plans go a long way to alleviate these risks and concerns. For amodest price (currently basic coverage is $400 to $450, and sometimes slightly morefor optional coverage). Sellers or buyers can elect to purchase a one-year warrantycovering specified heating, plumbing, electrical, water heater or appliance break-downs. If the seller is not offering a warranty or refuses to do so, you should considerpurchasing one yourself. Additionally, they are usually renewable year after year. Inall cases, there are important limitations and exclusions (example: appliances/systemsmust be operative at commencement of coverage). Let’s make a decision regardingthis now! Remember, it’s too late to opt for coverage once the covered system fails.

The following is a document that all real estate agents should provide to you

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Questions and Answers onHome InspectionsFor most persons, purchasing a home is the largest investment they will ever make. It is no wonder then that manyhomebuyers employ professionals to inspect the structural and mechanical systems of the home and report to them ontheir condition. Sometimes sellers also employ Home Inspectors to alert them to problems with their homes which couldarise later in the transaction. But normally Home Inspectors are employed by buyers. For this reason, this brochure iswritten from the viewpoint of the potential homebuyer.

This brochure is a joint publication of the North Carolina Home Inspector Licensure Board and the North CarolinaReal Estate Commission designed to give consumers a better understanding of the home inspection process. What ahome inspection is, who can perform an inspection and what to expect. If you have further questions regarding homeinspections and Home Inspectors, you should contact the North Carolina Home Inspector Licensure Board, 410 NorthBoylan Avenue, Raleigh, NC 27603, Phone 919/715-0991.

QuestionsWhat is a home inspection?Can anyone perform a home inspection?Why should I have the home inspected?In my home purchase I have chosen to sign the standard Offer to Purchase and Contract* form which many real

estate and legal professionals use. It states that I have the right to have the home inspected and the right to re-quest that the seller repair identified problems with the home. Will the home inspection identify all of theseproblems?

How do I request a home inspection, and who will pay for it?Should I be present when the home inspection is performed?Are all inspection reports the same?What should I do if I feel something has been missed on the inspection?If, following the home inspection, the seller repairs an item found in the home inspection, may I have the Home

Inspector perform a "re-inspection"?

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Answers

What is a home inspection?It is an evaluation of the visible and accessible systems and components of a home (plumbing system, roof, etc.) andis intended to give the client (usually a homebuyer) a better understanding of their condition. It is also importantto know what a home inspection is not! It is not an appraisal of the property's value; nor should you expect it toaddress the cost of repairs. It does not guarantee that the home complies with local building codes (which are sub-ject to periodic change) or protect you in the event an item inspected fails in the future. [Note: Warranties can bepurchased to cover many items.] Nor should it be considered a "technically exhaustive" evaluation, but rather anevaluation of the property on the day it is inspected, taking into consideration normal wear and tear.

Can anyone perform a home inspection?No. Only persons licensed by the North Carolina Home Inspector Licensure Board are permitted to perform homeinspections for compensation. To qualify for licensure, they must satisfy certain education and experience require-ments and pass a state licensing examination. Their inspections must be conducted in accordance with the Board'sStandards of Practice and Code of Ethics.

Why should I have the home inspected?Most homebuyers lack the knowledge, skill and emotional detachment needed to inspect homes themselves. By usingthe services of a licensed Home Inspector, they can gain a better understanding of the condition of the property, es-pecially whether any items do not "function as intended” or "adversely affect the habitability of the dwelling” or"warrant further investigation" by a person who specializes in the item in question.

In my home purchase I have chosen to sign the standard Offer to Purchase and Contract* form which many realestate and legal professionals use. It states that I have the right to have the home inspected and the right to requestthat the seller repair identified problems with the home. Will the home inspection identify all of these problems?*Jointly approved and copyrighted by the North Carolina Association of REALTORS® and the North CarolinaBar Association.Home Inspectors typically evaluate structural components (floors, walls, roofs, chimneys, foundations, etc.), me-chanical systems (plumbing, electrical, heating/air conditioning, installed appliances and other major componentsof the property. The Home Inspector Licensure Board's Standards of Practice do not require Home Inspectors toreport on: wood-destroying insects, environmental contamination, pools and spas, detached structures and certainother items listed in the Offer to Purchase and Contract form. Always ask the Home Inspector if he covers all thethings which are important to you. If not, it is your responsibility to arrange for an inspection of these items by theappropriate professionals. For a description of the services to be provided by the Home Inspector (and their cost),you should read carefully the written contract which the Home Inspector must give you and which you must signbefore the Home Inspection can be performed.

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How do I request a home inspection, and who will pay for it?You can arrange for the home inspection or ask your real estate agent to assist you. Unless you otherwise agree,you will be responsible for payment of the home inspection and any subsequent inspections. If the inspection is to beperformed after you have signed the purchase contract, be sure to schedule the inspection as soon as possible to al-low adequate time for any repairs to be performed.

Should I be present when the home inspection is performed?Whenever possible, you should be present. The inspector can review with you the results of the inspection and pointout any problems found. Usually the inspection of the home can be completed in two to three hours (the time canvary depending upon the size and age of the dwelling). The Home Inspector must give you a written report of thehome inspection within three business days after the inspection is performed (unless otherwise stated in your con-tract with the Home Inspector). The home inspection report is your property. The Home Inspector may only give itto you and may not share it with other persons without your permission.

Are all inspection reports the same?No. While the Home Inspector Licensure Board has established a minimum requirement for report-writing, re-ports can vary greatly. They can range from a "checklist" of the systems and components to a full narrative evalu-ation or any combination of the two. Home Inspectors are required to give you a written "Summary" of their in-spection identifying any system or component that does not function as intended, or adversely affects the habitabil-ity of the dwelling, or appears to warrant further investigation by a specialist. The summary does not necessarilyinclude all items that have been found to be defective or deficient.Therefore, do not read only the summary. Carefully read and understand the entire home inspection report.

What should I do if I feel something has been missed on the inspection?Before any repairs are made (except emergency repairs), call the inspector or inspection company to discuss theproblem. Many times a "trip charge" can be saved by explaining the problem to the inspector who can answer thequestion over the telephone. This also gives the inspector a chance to promptly handle any problems that may havebeen overlooked in the inspection.

If, following the home inspection, the seller repairs an item found in the home inspection, may I have the HomeInspector perform a "re-inspection"?Yes. Some repairs may not be as straightforward as they might seem. The inspector may be able to help you evalu-ate the repair, but you should be aware that the re-inspection is not a warranty of the repairs that have been made.Some Home Inspectors charge a fee for re-inspections.

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Estimated Costs:

Buyer:Earnest $ 1-3% of asking price

Appraisal $400- $500

Credit report $50

Home inspection $375-$500(based on sq.ft)

Origination fee 1% of loan amount

Attorney fee $600-$650

Termite inspection $75-$100

Survey $300

Flood certificate $24

Recording fees $50

Title insurance price/1000 x $2

Property taxes/HOA dues prorated

Seller:Commission 5-7% of purchase price

Deed preparation $75-$95

Deed/revenue stamps price/500 x $1

Loan payoff balance of existing loan

Property taxes/HOA dues prorated

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Home Buying Packet Real Estate Glossary

Acceptance: the date when both parties, seller and buyer, have agreed to and completed signing and/or initialingthe contract.

Adjustable Rate Mortgage: a mortgage that permits the lender to adjust the mortgage's interest rate periodicallyon the basis of changes in a specified index. Interest rates may move up or down, as market conditions change.

Amortized Loan: a loan that is paid in equal installments during its term.

Appraisal: an estimate of real estate value, usually issued to standards of FHA, VA and FHMA. Recent compa-rable sales in the neighborhood is the most important factor in determining value

Appreciation: an increase in the value of a property due to changes in market conditions or other causes. The op-posite of depreciation.

Assumable Mortgage: purchaser takes ownership to real estate encumbered by an existing mortgage and assumesresponsibility as the guarantor for the unpaid balance of the mortgage.

Bill of Sale: document used to transfer title (ownership) of PERSONAL property.

Cloud on Title: any condition that affects the clear title to real property.

Consideration: anything of value to induce another to enter into a contract, i.e., money, services, a promise.

Deed: a written instrument, which when properly executed and delivered, conveys title to real property.

Discount Points: a loan fee charged by a lender of FHA, VA or conventional loans to increase the yield on theinvestment. One point = 1% of the loan amount.

Easement: the right to use the land of another.

Encumbrance: anything that burdens (limits) the title to property, such as a lien, easement, or restriction of anykind.

Equity: the value of real estate over and above the liens against it. It is obtained by subtracting the total liensfrom the value.

Escrow Payment: that portion of a mortgagor’s monthly payment held in trust by the lender topay for taxes, hazard insurance and other items as they become due.

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Home Buying Packet Real Estate Glossary (continued)

Fannie Mae: nickname for Federal National Mortgage Corporation (FNMA), a tax-paying corporation createdby congress to support the secondary mortgages insured by FHA or guaranteed by VA, as well as conventionalloans.

Federal Housing Administration (FHA): an agency of the U.S. Department of Housing and Urban Develop-ment (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHAsets standards for construction and underwriting but does not lend money or plan or construct housing.

FHA Insured Mortgage: a mortgage under which the Federal Housing Administration insures loans made, ac-cording to its regulations.

Fixed Rate Mortgage: a loan that fixes the interest rate at a prescribed rate for the duration of the loan.

Foreclosure: procedure whereby property pledged as security for a debt is sold to pay the debt in the event of de-fault.

Freddie Mac: nickname for Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled andoperated corporation to support the secondary mortgage market. It purchases and sells residential conventionalhome mortgages.

Graduated Payment Mortgage: any loan where the borrower pays a portion of the interest due each month duringthe first few years of the loan. The payment increases gradually during the first few years to the amount necessaryto fully amortize the loan during its life.

Lease Purchase Agreement: buyer makes a deposit for future purchases of a property with the right to lease prop-erty in the interim.

Lease with Option: a contract, which gives one the right to lease property at a certain sum with the option to pur-chase at a future date.

Loan to Value Ratio (LTV): the ratio of the mortgage loan principal (amount borrowed) to the property’s ap-praised value (selling price). Example – on a $100,000 home, with a mortgage loan principal of $80,000 theloan to value ratio is 80%.

Mortgage: a legal document that pledges a property to the lender as security for payment of adebt. due.

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Home Buying Packet Real Estate Glossary (continued)

Note: a written promise to pay a certain amount of money.

Origination Fee: a fee paid to a lender for services provided when granting a loan, usually a percentage of theface amount of the loan.

Private Mortgage Insurance (PMI): see Mortgage Insurance Premium.

Second Mortgage / Second Deed of Trust / Junior Mortgage / Junior Lien: an additional loan imposed on aproperty with a first mortgage. Generally, a higher interest rate and shorter term than a “first” mortgage.

Settlement Statement (HUD-1): a financial statement rendered to the buyer and seller at the time of transfer ofownership, giving an account of all funds received or expended.

Severalty Ownership: ownership by one person only. Sole ownership.

Tenancy In Common: ownership by two or more persons who hold an undivided interest without right of survi-vorship. (In event of the death of one owner, his/her share will pass to his/her heirs.

Title Insurance: an insurance policy that protects the insured (buyer or lender) against loss arising from defects inthe title.

Mortgage Insurance Premium (MIP): the amount paid by a mortgagor for mortgage insurance. This insuranceprotects the investor from possible loss in the event of a borrower’s default on a loan.

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Need a hand getting your house back to “like-new” condition?Worried some of your paint selections might rub a potential buyer the

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