Guide to Home Buying

Buyers Guide

We Know East Tennessee

Let us help you find your dream home!

office 865.694.5904

direct 865.862.8513 •

5616 Kingston Pike, Suite 201, Knoxville, TN 37919 • info@billyhoustongroup.com

www.BillyHoustonGroup.com Each Keller Williams office is independently owned & operated.

Team Leader & Commercial Specialist Meet Billy Houston, the owner of Billy Houston Group at Keller Williams brings more than 30 years of financial experience to the sale of your home or to the purchase of your new home or investment/ business property. Billy spent over 20 years in the banking business where he started out working as a loan officer and worked his way up to a CEO. During that time, Billy helped people finance homes, personal property, businesses and other types of commercial endeavors. And, for the last 10 years he has been working with a company that helped students finance their education. So from education to homes to business ventures … helping people reach their dreams is what Billy has always done. And, with all his experience on the finance side, Billy is sure to help make his client’s adventure in buying a home or business a successful one.

Billy has structured his team in a way to best serve our clients. Your best interests are the foundation of our team and our responsibility. We have specialized Buyers Agents, Listing Agents, a Builder, a Marketing Coordinator, and a Transaction Coordinator so that you don’t have one agent, trying to do five very different jobs. We are the only “one-stop-shop” team in Knoxville, therefore making sure you are well taken care of from start to finish.

Customer care is one of our main priorities. We want you to feel completely informed and relaxed throughout the home buying or selling process knowing we are representing you well.

What’s different about a Keller Williams agent?

Knowledge: Keller Williams agents stay ahead of trends, tools and topics in the real estate industry through their access to Keller Williams University. The comprehensive industry-leading training curriculum prepares our agents to serve you at the highest level.

Teamwork: Unlike other real estate companies, Keller Williams Realty was designed to reward agents for working together. At our core, we believe that we are all more successful if we strive towards a common goal, rather than our individual interests. And, that goal is to serve you, our client, at the highest level possible.

Reliability: Keller Williams Realty was founded on the principles of trust and honestly, emphasizing the importance of having the integri ty to do the right thing and always putting your needs first.

Our agents realize that their success is ultimately determined by the legacy we leave with each client we serve.

Speed: Leading-edge technology solutions accelerate our associates’ efficiency and productivity.

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Meet At Billy Houston Group, real estate is a people business. Whether we’re finding our clients a new home, selling a current home or helping business dreams come true, we are committed to our clients. And that commitment will always be accompanied with honestly, integrity and respect. We believe those are important parts of all relationships, both professional and personal.

The Win/Win beneďŹ ts of a Team We found that using a team of specialists is the best way to help clients quickly reach their goals. Proper pricing, marketing, communication, feedback, follow-up, contract negotiations, etc. are key areas that can create a great experience. Our team concept is a win/win solution because you will have 11 professionals focused on your goals...all for the price of ONE AGENT! Our clients love our level of personal service since we have experts in every field available.

David Butler Commercial Specialist

Mary Campbell Listing Specialist

Cindy Kraus Listing Specialist

Chelsey Carp

Transaction Coordinator

Lacy Mellon

Marketing Director & Realtor

Billy Houston Owner/Operator Commercial Specialist

Kelly Nichols Buyer Specialist

Johnna Easter Buyer Specialist

Jack Woods Buyer Specialist

Cody Muth Listing Specialist

Colleen Reimer Buyer Specialist

How we work on your behalf This checklist focuses our discussion on what you should know to optimize your homebuying experience. If you have any questions not covered here, please ask us.

Your representation choices - how to protect your best interests - what you and I can reveal and what is protected.

Buyer Representation Agreement - mutual loyalty - how we will represent you Getting qualified - your first step in the homebuying process - we can help you choose a lender Calling other brokers - let me do the legwork New home sales - we work with builders - registration process at first contact Unrepresented sellers - how we can help you buy a home listed without an agent and still represent you Viewing property - interaction with the seller Efficiency tips - driving neighborhoods first, prioritizing Earnest money - how much, when deposited, how applied Seller’s disclosure - disclosure up front so you buy with full knowledge Property inspection - what you are really looking for - structural and major system defects Writing a contract - buying right, crafting a good offer Negotiating - offer, counteroffer - best terms and price Contract-to-close - orchestrating all of the players Your referral business - earning your trust and confidence

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What We Can Help You Buy

Our Exclusive Buyer’s Agents will evaluate your home buying needs in our first meeting with you and will then be better prepared to assist you in your home buying search. We are highly skilled in locating the ideal home for you whether it’s an existing home, investment, or a new builder construction! In all three transactions our commission fees are pre-negotiated so that the seller is responsible for them, not the buyer.

EXISTING HOMES Once we know what your wants and needs are based on our initial consultation, we spend a day previewing properties that meet your criteria. We show you homes listed by any brokerage firm in the Knoxville area and we are able to narrow a list of hundreds of properties because of factors such as neighborhood or home features.

We preview the properties first because we are able to look at several homes in the time it would take both of us to view just a couple. Other agents may make you spend valuable time driving by homes and then telling them which homes you wish to see. Instead we narrow the list and show you only the most well kept homes, in the best areas, at the best value. That is unless you are looking for a fixer-upper, then we will adjust our criteria for narrowing the search! The bottom line is to save you time and money!

UNREPRESENTED SELLERS We often work with homeowners that wish to sell their home themselves. In fact, many of the listings that our team takes are from people who have tried unsuccessfully to sell their homes themselves. We maintain awareness of all unrepresented seller properties that are listed in the Knoxville and surrounding areas and we will be happy to arrange a showing for you. In this transaction, you will continue to be represented by us with our buyer’s representation agreement. Unfortunately for the seller, as they complete the transaction with no professional representation.

NEW BUILDER CONSTRUCTION Many home buyers and investors are not aware that the representatives at new construction sales centers work for the builder, and do not represent the buyer’s best interests. Our team has extensive knowledge of area builder reputations, floor plans and lots as well as schools, neighborhoods, amenities, and accessibility. As your Exclusive Buyer’s Agent, we will negotiate the purchase price on your behalf with the builder and assist you in selecting.

BillyHoustonGroup.com

www.BillyHoustonGroup.com Our website was built for YOU! Before launching our team, Billy spent weeks working with website designers and real estate experts all across the country to ensure we had the most technologically advanced tools for our clients. Our website was built with YOU in mind. Everything you need to start the home buying or selling process will be found on our website. There is a plethora of information at your fingertips.

Be notified when a new listing hits the market matching your criteria!

Easy home searches to find the perfect place!

Estimate your monthly mortgage Get organized with a moving checklist!

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Keller Williams Mobile App

What this app will do for you...

• Get prices instantly on homes you drive by!

• Find an area you like and click “Nearby Homes” to see homes for sale near you!

• Draw a map around a certain area to see available homes for sale!

• Share by e-mail, Facebook, or Tweet homes you find! ...and MUCH more...

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Start to Finish - Here is what to expect...

Purchasing a new home should be an exciting experience. We are here every step of the way from finding your dream home to negotiating the terms of the sale and recommending moving companies.

Pre-Approval Getting pre-approved is essential so that you have a solid idea of your price range and interest rate. This also lets the sellers know you are serious about purchasing and can put you ahead of other buyers.

Buyer Consultation It is important to analyze your needs and accurately pinpoint the criteria for your new home based on the factors most important to you (location, size, floor plan, schools, etc.) We will narrow the list of homes to a select few for viewing.

Viewing Homes As long as your preferences do not change, we will only need to see an average of six to eight homes before finding the one for you. It is important to note that cosmetic changes can be easy fixes (paint, carpet, some finishes) and are great ways to build quick equity.

Making the Offer Prior to making up the offer, our team will research the recent sales of comparable homes to come up with a calculated starting offer. The 3 basic components of your offer are price, terms, and contingencies.

•Price is the dollar amount for which you are approved, willing, and able to pay.

•Terms cover the other financial and timing factors that will be included in the offer (closing costs, closing date, etc.)

•Contingencies are clauses that let you out of the deal if the house has a problem that didn’t exist or which you weren’t aware of when you went under contract. They specify any event that will need to take place in order for you to fulfill the contract.

Negotiating Counteroffers There will likely be a negotiating period in order to reach agreeable terms. Once terms have been agreed upon, earnest money (usually $1,000) will be collected and held in escrow until closing. It is credited toward your loan amount at closing.

Home Inspection Period **We will gladly schedule all inspections for you. We recommend a select few certified home inspectors who will make you aware of any repairs or replacements that should be made. It is best for you to be present for the end of the inspection to go over all findings.

Keep in mind you are paying the inspector to point out the flaws of the home so do not be overwhelmed. The termite inspection will be performed within the same time frame, but you do not have to be present.

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Inspection Contingency Removal Once we discuss the home inspection report, we will use the inspection contingency removal to request the seller to make needed repairs.

Sign Loan Documents We will send your lender a copy of the fully executed contract. You will need to meet with your lender to sign all necessary loan documents and supply updated pay stubs, W-2s, tax returns, bank statements, retirement account statements, homeowners insurance agent’s name and phone number, along with a few more items. The appraisal fee will also be collected at this time.

Appraisal A licensed appraiser will go to the home and calculate the value based on recent sales, condition, and a few other factors. This loan amount will be reported to the lender who will lend on the lower value of either the appraisal or the purchase price amount. This will be ordered by your lender, typically after repairs are negotiated.

Final Loan Approval After appraisal, the lender will underwrite the loan and perform a final approval on the property and you, the borrower. Keep in mind that you may be asked to supply more information. Once all items have been cleared, the lender will send all closing documents to the title company. ***It is essential that you do not make any large purchases that will impact your credit prior to closing on your new home.*** Utility Changes Two days prior to closing you will need to contact the utility providers for water, electric, and gas to ensure the service is transferred to your name and not terminated.

Closing The day you’ve been awaiting!! You will need to bring your driver’s license and the payment amount specified by the title company in the form of a certified check (no personal checks). This is when you sign all official documents and become the owner of your new home!!

Owners Title Insurance Sometimes title problems occur that could not be found in the public records or are inadvertently missed in the title search process. To help protect you in these events, it is recommended that you obtain an Owner’s Policy of Title Insurance to insure you against the most unforeseen problems.

It is purchased for a one-time fee at closing and lasts for as long as you or your heirs have an interest in the property.

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Home Process Buying Chart

Start Phase One

Start Phase Two

Initial Consultation Info. about brokerage services Buyer’s Representation Agreement Buyers Packet

Application for Loan Pre-Approval

Order Apprais-

Send Loan to Underwrit-

Loan Approval

Credit Report

Buyer’s Agent Previews Properties

Mortgage Company

Order Survey

Title Company

Title Search

View Active Listings

Make Offer on Property

Buyer to Arrange for Transfer of Utilities

Negotiate Terms of

Final Contact

Mortgage Company Delivers Final Loan Documents to Title Company

Buyer to Arrange for Homeowners Insurance Option Period 7-10 days

Home Inspection

Amendment

Negotiate Repairs

The Company Prepares HUD 1 Statement

Buyer Brings Cashiers Check to Closing

Option Period Expires Home Ownership

Proceed to Phase Two

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Seven Tips for Homebuyers: How to Save Thousands When Buying a Home

1.

Arrange for your mortgage financing up front before you even start to look for a home. The lender will focus on your ideal price range, your maximum loan, and whether there are any credit issues you should correct before buying. The lender will also prepare a qualification letter, which you must provide the seller when you make an offer.

2.

Review a blank contract form before you write your contract offer. This will familiarize you with contract details and may prompt questions. Ask your agent to explain the process of negotiating and counteroffers.

3.

Use buyer representation. It is important to have an agent who owes his total loyalty to you. Discuss your representation options with your agent. If you are purchasing one of your agent’s company listings, make sure you understand what your agent can and cannot do for you.

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Buyers

For more in-depth details on our services for Buyers, please take a look at our guide: http://billyhoustongroup.com/buying_a_home

the seller’s disclosure before you make an offer. Your contract offer should reflect the condi4. Review tion of the property. The seller could disclose a repair condition that would affect what you would be willing to pay. You should know this before you decide on an offering price.

for a residential service contract when you write the offer. This will cover you for some items that 5. Ask malfunction during the first year of ownership. Cash used for downpayment, closing costs, and other home necessities can deplete your cash reserves. A residential service contract will reduce the risk of a future drain if a warranted item needs repair that first year.

6.

Get the property inspected by a licensed professional inspector. This will let you know the true condition of what you are buying. Follow the inspector’s advice if he recommends that you have another expert inspect a troublesome item. Ask your inspector to explain how to work or maintain appliances or systems in the home with which you are unfamiliar.

your agent to prepare a market analysis of the property before you make an offer. You should 7. Ask know what similar properties are selling for so that you don’t overbuy. Also, if the seller remains firm on his price, you will be able to tell if the value is really there.

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How to Choose the Right Lender Homebuyers have many options when selecting their mortgage lender. The lowest price or best terms are not the only considerations. The key ingredients are interest rate, terms, AND service. Use the following tips to guide your selection: Equal Monthly Payments to Amortize a Loan of $1,000 the rate and terms in writing. It is easy to quote a good 1. Get rate to capture your loan. If you don’t get it in writing, the quote could change. This is particularly true of lenders found over the Internet. If the lender cannot give you the quote in writing, steer clear.

your main mortgage goals with the lender, who 2. Share should then offer suggestions on mortgages that will accomplish your goals. If the lender does not offer counseling, their service is below par.

lender accessibility during loan processing. Ask 3. Predict how the loan will be processed and who will be available to answer questions. Ask for a direct line. If the lender resists, you and your agent may have difficulty reaching them when you need them.

lender accessibility. Get a call back number and make 4. Verify a call to see if and how long it takese for the lender to get back to you. If they are hard to reach now, it may be even harder once they have your business.

about his processing support. If the lender does their 5. Ask own processing along with taking loan applications and prospecting for new business, they may be too busy to take care of your loan.

processing time. If the lender cannot promise a 6. Confirm date, then you may not be able to confirm to your contract.

Ask your agent for lenders they have worked with who give competitive rates and terms AND great service.

Lending Partners h o m e f i n a n c i n g by :

JEFF SEAGRAVES 865-691-8910 NMLS Unique Identifier # 181855 TN License # 101893

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TERM RATE

10

15

20

25

30

3 3.125 3.25 3.375 3.5 3.625 3.75 3.875 4 4.125 4.25 4.375 4.5 4.625 4.75 4.875 5 5.125 5.25 5.375 5.5

9.66 9.72 9.78 9.84 9.89 9.95 10.01 10.07 10.13 10.19 10.25 10.31 10.37 10.43 10.49 10.55 10.61 10.67 10.73 10.80 10.86

6.91 6.97 7.03 7.09 7.15 7.21 7.27 7.33 7.40 7.46 7.52 7.59 7.65 7.71 7.78 7.84 7.91 7.98 8.04 8.11 8.18

5.55 5.61 5.67 5.74 5.80 5.86 5.93 5.99 6.06 6.13 6.19 6.26 6.33 6.39 6.46 6.53 6.60 6.67 6.74 6.81 6.88

4.74 4.81 4.87 4.94 5.01 5.07 5.14 5.21 5.28 5.35 5.42 5.49 5.56 5.63 5.70 5.77 5.85 5.92 6.00 6.07 6.15

4.22 4.28 4.35 4.42 4.49 4.56 4.63 4.70 4.77 4.85 4.92 4.99 5.07 5.14 5.22 5.29 5.37 5.45 5.53 5.60 5.68

Lending Process There are several steps that we go through together while finding and purchasing your home.

For many of these we simply tell you that the task has been completed for you, however, others may require some work from you. We inform you about every aspect of the transaction and remind you when there are tasks that you should be working on to complete. On the previous page is a chart that shows the flow of these tasks so you can better understand the home buying process.

Task: Secure Financing TimeFrame: Before We Begin Looking The first step in buying a home is to obtain loan pre-approval. This provides you with the information you need to determine how much home you can afford and what type of monthly payment you are comfortable with. In addition, many sellers do not consider offers from buyers that are not pre-approved. We work with several lenders that have proven to offer exceptional customer service and competitive interest rates. We will be happy to provide you with a list of recommended lenders we have done business with.

Three elements are crucial to the purchase of a home: the down payment, closing costs and qualifying for a mortgage. Here is a quick rundown of what you should know: Items Needed for Loan Application: •Legible copy of the sales contract signed by Buyers and Sellers, including all addenda.

•Social Security number of all applicants.

•Complete addresses for the past 7 years (including complete name and address of landlords for past 24 months).

•Name, address, and all income earned from all employers for past 24 months.

•Copies of previous two years W-2 forms.

•Copy of most recent year-to-date pay stub.

•Name, address, account number, monthly payment and current balance for: installment loans, revolving charge accounts, student loans, mortgage loans and auto loans.

•Name, address, account numbers and balances of all deposit accounts, including: checking account, savings account, stocks, bonds, etc.

•Three months of most recent statements for deposit accounts, stocks, etc.

•If you choose to include income from Child Support/Alimony bring copies of court records or cancelled checks showing receipt of payment.

If you are applying for a VA Loan: •DD-214, Certificate of Eligibility, or statement from your Commanding Officer if you are on active duty.

Loan Qualification: Primarily, your income plus the interest rate secured, determine the size of the mortgage you qualify for. The higher the interest rate, the higher the monthly payment. The higher the monthly payment, the more income you need to qualify for the mortgage. For conventional financing, lenders generally limit the monthly payment to 28% of your gross monthly income. Exceptions can be made depending on individual circumstances. The amount of debt you currently have may also factor in the decision.

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You should know...

Buying a home is an exciting but often overwhelming experience, particularly if you are buying your first home. As your REALTOR®, we can help you through the home buying process and assure that you find the right home for you, at the right price for you. Every homebuyer has a number of concerns, all of which we can help you with: Setting a Time Frame There are a lot of variables in the homebuying process, which means the time it takes to find and buy your new home varies too. A typical home search process may take three to four months, including the mortgage approval process, comparing and evaluating properties, making an offer and the closing process. The loan process typically takes 30-45 days.

The Lending Process Perhaps one of the most intimidating aspects of buying a home is the mortgage approval process.

We'll be here to help guide you through this, but there are many ways you can prepare early to make the process smoother. Start by making sure your budget is under control--make a list of all your monthly expenses, compare it with your income, and see if adjustments need to be made. You should also try to pay off small credit card balances. Start gathering documents you may need, such as W-2 forms, income tax returns for the past few years, pay stubs, records of child support or alimony, bank statements for the past several months, and your credit report. Also, be sure to allow for closing costs. Getting several offers will allow you to compare loans and get the best deal.

Determining How Much You Can Afford A general guideline to consider is that most buyers purchase a home that costs about one and a half to two and half times their current annual income. For example, someone earning $50,000 a year might purchase a home for $75,000 to $125,000. Mortgage payments should be about 26-28 percent of your gross monthly income. Existing debt is also considered in the mortgage process, and total debt payments (car payments, credit cards, student loans, etc.) should not exceed 40 percent of your gross monthly income. Click here to use this easy mortgage calculator to get an estimate of monthly payments.

Finding a Home That Meets Your Needs and Wants Before you start looking at properties, make a list of "must-have" features along with optional features you'd like to have. "Must-have" features may include the number of bedrooms and bathrooms you'll need to accommodate your family, location (consider commute to work, which schools your children will attend, etc.), lot size and special needs (handicapped access, etc.). Optional features may include the architectural styling, bay windows, landscaping, etc. Having a clear idea of what you want in a home will help your REALTOR® find the perfect property for you.

Educating yourself about the home-buying process is key to getting a home you love and can afford.

As your REALTOR®, we are here to answer any questions you might have and guide you through

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SO YOU’RE READY TO BUY A NEW HOME!? Know this....

Whether this is your first home purchase or one in a line of several over the past years, we would like to provide you with some basic information upfront to prepare you for your search. We hesitate to begin this with information about what it will cost to buy your new home, but after all, money is the bottom line. We are certain you would like to be informed of what costs you will incur.

Four Checks Prior to Closing: You will need to write four checks prior to closing on your new home. All costs are average and will vary with the price, size, and features of your new home.

1. Termite Inspection ($40-60). This is optional and even paid by the seller sometimes. Talk with your agent about this cost.

2. Earnest Money (1% of the sales price of the home): Payable to the title company or brokerage firm at signing of offer. This will be credited toward your closing costs.

3. Inspection ($300-$500): Payable to the inspector at time of the inspection during the option period.

4. Credit Check and Appraisal ($400-450): Payable to the Lender when the appraisal is ready to be ordered.

Downpayment: Conventional lenders will typically require a 20% down payment, although you may be able to find loans with no down payments. With down payments less than 20%, you will likely have to pay private mortgage insurance which guarantees the lender will be repaid in case of default.

Mortgages insured by the Federal Housing Administration (FHA) and those available to U.S. veterans often require very low down payments. Ask your lender if you can qualify for one of these loans. If you have trouble coming up with the down payment, there are some tips to ease the burden: •Start early. Begin saving for a down payment as soon as possible.

•Ask for a Flex 97 mortgage, underwritten by Fannie Mae. It only requires 3% down provided that you have good credit. Also, you may be able to borrow that 3% on credit cards.

•Convert stocks. Consider selling stock for the downpayment. The housing market is often a better investment anyway.

•Sell an asset. If you have “toys” such as a boat, extra car, or other asset, consider selling it for the down payment.

•Borrow from relatives. Today lenders will allow you to use money from relatives as the down payment if it is provided as a gift.

Closing Costs: No matter what home you buy, there will be closing costs. These can include: discount points, title insurance, escrow fees, attorney fees, a termite report, recording fees, appraisal fees, document preparation fees, notary fees, and loan underwriting fees. Usually these are due in cash, but sometimes can be folded into the mortgage.

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About Home Inspections Inspections should be set up as soon as possible after the contract is fully executed. This will leave time to negotiate and amend the contract if major problems, not known at the time the contract was written, are discovered during the inspection. Once we discuss the home inspection report, we will use the inspection contingency removal to negotiate and require the seller to make any repairs.

Initially, what you know about the property comes from what the seller has disclosed and what you have observed. A more thorough look by a licensed and/or knowledgeable inspector(s) can offer you peace of mind. The property inspector’s job is to tell you about the property. The inspector should disclose up front the scope of his inspection so you will know what he will and will not inspect and how deep he will probe.

The purpose of the inspection is four-fold: 1. Educate you about ongoing maintenance issues 2. Familiarize you with the items that might need repair in the future 3. Instruct you about the operation of any equipment 4. Inform you of major problems that might not have been known or readily apparent when you looked at the property. Major undisclosed mechanical, structural, safety, and environmental defects might become items for negotiation. (Cosmetic repairs and maintenance are normal concerns of homeownership and normally are not items for further negotiation.)

Inspectors will generally inspect the foundation and other structural items such as walls and roof.

They will look at mechanical systems such as heating, air-conditioning, electrical, plumbing, doors, and windows and appliances.

Special inspections may be needed after the general inspector gives his report. These could include separate septic, pool and spa, flood insurance, security, sprinklers, or structural inspections. Your inspector and/or your real estate expert will suggest additional inspections by experts if they have concerns beyond their expertise. These inspections could include stucco inspection, septic tank, termite, survey, or lead-based paint inspection.

Home Inspection Partners

865.599.1163

865.938.7575

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865.622.2255

Closing 101

The Final Walkthrough You’ll be given the chance to look at the home to make sure it’s in the same or better condition as when you signed the sale agreement. Your agent will bring a copy of the repair amendment to check on any repairs made to ensure satisfaction. You will sign a form stating your satisfaction after the walkthrough that must be provided at closing.

Prepare for It Closing day marks the end of your home-buying process and the beginning of your new lift! To make sure your closing goes smoothly, you should bring the following: •****A certified check for closing costs and down payment**** •Photo IDs •Social Security numbers •Addresses for the past 10 years Own It Transfer of title moves ownership of the property from the seller to you. The two events that make this happen are: •Delivery of the buyers funds: This is the check or wire funds provided by your lender in the amount of the loan.

•Delivery of the deed: A deed is the document that transfers ownership of real estate. At the end of closing, the deed will be taken and recorded at the county clerk’s office. It will be sent to you after processing.

Oh, and one more thing-

you’ll get the keys!

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Your Exclusive Buyer’s Agent •

There are three different ways in which you can be represented during the purchase of a new home, and none of them cost you, the buyer, any money. Then why do people often times choose the worst form of representation? Usually it is due to a lack of education about the home buying process. Our goal is to be your Exclusive Buyer’s Agent and assist you in making well educated and informed decisions throughout the home buying process.

You can be represented in a real estate transaction in the following ways:

SELLER AGENCY (SINGLE AGENCY)

Buyer

Seller

Seller

•Agent will represent the best interests of the seller •Agent will owe the seller fiduciary duties •Agent must give the buyer all material facts so that the buyers can make educated decisions

BUYER AGENCY (SINGLE AGENCY)

Buyer

•Agent will represent the best interests of the buyer •Agent will owe the buyer fiduciary duties •Agent must give the seller all material facts so that the seller can make educated decisions

TRANSACTION BROKER (FACILITATOR) Buyer

Seller

•Agent facilitates neither the buyer or the seller •Agent’s objective is to get a mutually satisfactory agreement among all parties •Agent gives all options to the buyer and the seller •Depending on the local market, all parties may be present at contract presentation to negotiate on their own behalf •All parties have confidentiality. Agent may do nothing to the detriment of either the buyer or the seller •Both the buyer and the seller have a right to counsel. Before making any decisions, both parties have the right to seek family, religious, legal or financial counsel.

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It is important to us to exceed your expectations during your home buying process and make the purchase of your home an enjoyable experience. Please complete and return this form to us as soon as possible. Thank you very much for the opportunity to serve you!

Contact Information Buyer(s) __________________________________________________________________ Current Address: ___________________________________________________________ His Cell_________________ Work ________________ Email _______________________ Her Cell_________________ Work ________________ Email ______________________ Search Criteria Price Range: ____________________ Beds: ______ Baths: ________ Type: ________________ Foundation: __________________ Garage: _______________ Lot: _________________ Age: _______ Exterior Features: _________________________ Finishes: ___________________________________________________________________ Schools: ________________________ Sub area(s): ________________________________ House Features Needs

Wants

1. __________________________________

1. _________________________________

2. __________________________________

2. _________________________________

3. __________________________________

3. _________________________________

4. __________________________________

4. _________________________________

5. __________________________________

5. _________________________________

Community/Neighborhood Needs

Wants

1. __________________________________

1. _________________________________

2. __________________________________

2. _________________________________

3. __________________________________

3. _________________________________

4. __________________________________

4. _________________________________

5. __________________________________

5. _________________________________

Preferred Schools 1. __________________________________ 2. __________________________________ 3. __________________________________

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BillyHoustonGroup.com

Home Buyer’s Glossary When buying a home, it’s important to understand some of the key concepts and terms. Throughout the purchase process, your REALTOR will be available to explain any unfamiliar terms you encounter. That said, here is a short list of terms you’ll want to know: Abstract of Title – A complete historical summary of the public records relating to the legal ownership of a particular property from the time of the first transfer to the present.

Adjustable Rate Mortgage (ARM) – Also known as a variable-rate loan, an ARM is one in which the interest rate changes over time, relative to an index like the Treasure index.

Agreement of Sale – Also known as contract of purchase, purchase agreement, or sales agreement according to location or jurisdiction. A contract in which a seller and buyer agree to transact under certain terms spelled out in writing and signed by both parties.

Amortization – The process of reducing the principal debt through a schedule of fixed payments at regular intervals of time, with an interest rate specified in a loan document.

Appraisal – A professional appraiser’s estimate of the market of value of a property based on local market data and the recent sale prices of similar properties.

Assessed Value – The value places on a home by municipal assessors for the purposes of determining property taxes.

Closing – The final steps in the transfer of property ownership. On the Closing Date, as specified by the sales agreement, the buyer inspects and signs all the documents relating to the transaction and the final disbursements are paid. Also referred to as the Settlement.

Closing Costs – The costs to complete a real estate transaction in addition to the price of the home, may include: points, taxes, title insurance, appraisal fees and legal fees.

Contingency – A clause in the purchase contract that describes certain conditions that must be met and agreed upon by both buyer and seller before the contract is binding.

Counter-offer – An offer, made in response to a previous offer, that rejects all or part of it while enabling negotiations to continue towards a mutually-acceptable sales contract.

Conventional Mortgage – One that is not insured or guaranteed by the federal government.

Debt-to-Income Ratio – A ratio that measures total debt burden. It is calculated by dividing gross monthly debt repayments, including mortgages, by gross monthly income.

Down Payment – The money paid by the buyer to the lender at the time of closing. The amount is the difference between the sales price and the mortgage loan. Requirements vary by loan type. Smaller down payments, less than 20%, usually requires mortgage insurance.

Earnest Money – A deposit given by the buyer to bind a purchase offer and which is held in escrow. If the property sale is closed, the deposit is applied to the purchase price. If the buyer does not fulfill all contract obligations, the deposit may be forfeited.

Equity – The value of the property, less the loan balance and any outstanding liens or other debts against the property.

Easements – Legal right of access to use of a property by individuals or groups for specific purposes. Easements may affect property values and are sometimes part of the deed.

Escrow – Funds held by a neutral third party (the escrow agent) until certain conditions of a contract are met and the funds can be paid out. Escrow accounts are also used by loan servicers to pay property taxes and homeowner’s insurance.

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Home Buyer’s Glossary continued...

Fixed-Rate Mortgage – A type of mortgage loan in which the interest rate does not change during the entire term of the loan.

Home Inspection – Professional inspection of a home, paid for by the buyer, to evaluate the quality and safety of its plumbing, heating, wiring, appliances, roof, foundation, etc.

Homeowner’s Insurance – A policy that protects you and the lender from fire or flood, a liability such as visitor injury, or damage to your personal property.

Lien – A claim or charge on property for payment of a debt. With a mortgage, the lender has the right to take the title to your property if you don’t make the mortgage payments.

Market Value – The amount a willing buyer would pay a willing seller for a home. An appraised value is an estimate of the current fair market value.

Mortgage Insurance - Purchased by the buyer to protect the lender in the event of default (typically for loans with less than 20% down). Available through a government agency like the Federal Housing Administration (FHA) or through private mortgage insurers (PMI).

Possession Date – The date, as specified by the sales agreement, that the buyer can move into the property. Generally, it occurs within a couple days of the Closing Date.

Pre-Approval Letter – A letter from a mortgage lender indicating that a buyer qualifies for a mortgage of a specific amount. It also shows a home seller that you’re a serious buyer.

Principal – The amount of money borrowed from a lender to buy a home, or the amoint of the loan that has not yet been repaid. Does not include the interest paid to borrow.

Purchase Offer – A detailed, written document which makes an offer to purchase a property, and which may be amended several times in the process of negotiations. When signed by all parties involved in the sale, the purchase offer becomes a legally-binding sales agreement.

Title – The right to, and the ownership of, property. A Title or Deed is sometimes used as proof of ownership of land.

Clear title refers to a title that has no legal defects.

Title-In-Lending Act (TILA) – Federal law that requires disclosure of a truth-in-lending statement for consumer loans. The statement includes a summary of the total cost of credit.

Title Search – A historical review of all legal documents relating to ownership of a property to determine if there have been any flaws in prior transfers of ownership or if there are any claims or encumbrances on the title to the property.

BillyHoustonGroup.com

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