& Völkers Minneapolis Engel & Engel Völkers Big Sky Country
SBEULYER’ L E R ’SS GU G UIIDE DE
THE BEST JUST KEEPS GETTING BETTER
THE B E ST JU ST KEEPS GETTI NG BE TTE R! Introducing & Völkers BigBig SkySky Country - We are anare elitean group real estate Advisors want who IntroducingEngel Engel & Völkers Country - We eliteofgroup of real estate who advisors
want to personally re-create the perceptions of this industry by exceeding your expectations and be a resource to you, for life.
to personally re-create the perceptions of this industry by exceeding your expectations and be a
resource to you, for life. Since opening the doors to Engel & Völkers Bozeman in December of 2016,
Since opening the doors to Engel & Völkers Bozeman in December of 2016, we have grown from a small shop with a handful of sales advisors to five southwest Montana shop locations locations filled with more 45 local Advisors. morepeople people are quality of life of when filled with more than than ninety advisors. As As more areconsidering considering quality life when choosinga home, a home, southwest Montana is emerging as a keydestination residential destination choosing southwest Montana is emerging as a key residential for both domesticfor both domestic and international buyers. we have grown from a small shop with a handful of sales Advisors to five southwest Montana shop
and international buyers. At Engel & Völkers, we do more than provide great real estate services.
At deliver Engel excellence & Völkers, than provide greatChristian real estate services. We deliver We andwe we do do itmore with passion! Our Founder, Völkers, once said, “Quality
excellence and we do it with passion! Our Founder, Christian Völkers, once said, “Quality
product premium service, and and innovative thinking never seem go out style.” Westyle.” We productofferings, offerings, premium service, innovative thinking nevertoseem toofgo out of
reallytake takethat that to heart. These ideals, asaswell own and continue passion to continue to be our really to heart. These ideals, as well our as ownour style andstyle passion, be our daily daily motivation.
motivation. Simply put, we are a premium service company whose Advisors happen to know and love
Simply put, we are a premium service company whose advisors happen to know and love the real the real estate industry. estate industry.
MORE T H A N JU ST A R E A L E STATE AGEN T Our Advi sors deliver peace of mind. Real estate agents help their clients buy and sell homes, Engel & Völkers Advisors do more! They offer you guidance and insight in ways not every agent can. In fact, we designate our agents as “Advisors”, to better define the higher level of service they provide. Engel & Völkers maintains consistently high levels of service experience throughout the world by managing performance at every level. We are highly selective of the agents who join us. We approach top performers with proven track records and real estate professionals who are well respected within the community. A deep understanding of client service is essential. Our Advisors start out great and always strive to be better. First and foremost, they are the experts. They can recommend restaurants, movie theaters, financial institutions, popular tourist attractions and cultural events. More importantly, they can talk about the real estate market and where homes you’re looking at are in the bigger picture. Being experts, our Advisors provide more than facts. They will provide you with valuable insight that is relevant to your personalized needs and see to every detail throughout the process so you won’t have to worry.
YO U ’ RE IN G O OD HAN DS When you’re out looking at proper t ie s. Your home buying experience is special to us. Being your real estate Advisor is not only our business but our passion and we are committed to providing you with exemplary personalized service beyond your expectations. From the beginning of your search, we listen to identify and truly understand your needs, a quality of business conduct that seems to have been forgotten in today’s highly automated society. Every detail that is important to you, is important to us. While we schedule showings, we will be timely and professional but keep in mind this is an exciting time. We make it fun as well! You will enter to a warmly lit home and have time to ask your questions while envisioning your life there. Together we’ll take notes to help you keep track of what makes one home different from the other, so in the end, your decision is the right one. When you’ve found “The One”, we will go to bat for you. We practice role playing and negotiating strategies weekly so we are ready for the real scenario. We’ll be honest with you and set realistic expectations, allowing you to submit your offer confidently.
Choose Your Advisor
Get Pre-approved
Find Your Home
Write Write Buy-Sell Buy-Sell Agreement Agreeme nt
Contract Inspection
THE HOOMME UIYI THE H E BB UY N GNG P RPRO O C E SCSES S Whether it’s a first home, an investment property, or a vacation home, Engel & Völkers Advisors will work with you to determine and achieve your home buying goals. Following a consultation with one of our expert Whether it’s a first home, an investment property, or a vacation home, Engel & Völkers Advisors will work with Advisors, who will ask questions that will shape the service to follow, we will show you properties that best you to determine and achieve your home buying goals. match your criteria. We will always work to find you the best value within your time frame while providing Following a consultation onepossible. of our expert Advisors, will questionshomes that will shape the service the most convenience for with you as We maintain an who active listask of available that is constantly to follow, we will show you properties that best match your criteria. We will always work to find you the best updated and have access to listings worldwide through Engel & Völkers’ global network. We also maintain value within your time frame while providing the most convenience for you as possible. relationships with trusted partners to provide the essential services you’ll require throughout the purchasing We maintain an active list ofinsurance, available homes that isand constantly updated and have access to listings worldwide process, including finance, inspections legal representation. through Engel & Völkers’ global network. We also maintain relationships with trusted partners to provide the essential services you’ll require throughout the purchasing process, including finance, insurance, inspections and legal representation.
Before t he search begins Know the reasons why you’re buying and make
Before the search b egins
sure it’s the right choice. Reasons to buy vary. Knowmarketing the reasons why you’re make Good conditions, a life buying change,and a desire sure it’s the right choice. Reasons to buy vary. Good to invest, aconditions, location change, etc. can all affect the marketing a life change, a desire to invest, path you might take etc. in finding theaffect rightthe property for a location change, can all path you might take in finding the right property for you. Your you. Your Engel & Völkers Advisor can help you look Engel & Völkers Advisor can help you look deeper deeper intofactors theseto factors to facilitate the process. into these facilitate the process. As far as the property itself, it’s a good idea to know Asthe far features as the property itself, a good idea tofrom know all you desire in it’s your new home, all the features you desire in your new home, from the the absolute must-haves to the things you would like absolute must-haves to the things you would like to to have, butcould couldlive livewithout withoutif ifaadecision decisionhad hadtotobe be have, but made. made.
V iewing proper t ie s
As you begin your search for a new home, keeping
V track i e wofi what n g makes p r o one p edifferent r t i e sfrom the other will you make the end. Take As help you begin yourbetter searchdecisions for a newin home, keeping track of of what one visit different fromorganized the otherso notes the makes homes you and stay will help you make better decisions in the end. Take you can easily compare information. notes of the homes you visit and stay organized so you can easily compare information.
Also consider: Also consider style of of the • •The The style the homes homes that that you youwill willsee: see:single single family condos, town townhomes family homes, homes, multi-family, condos, homes • •The The condition would accept: new conditionofofthe thehome homeyou you would accept: new home, older home, renovation required home, older home, renovation required • The resale value resale value • •The The number of bedrooms and bathrooms • •The The neighborhood number of bedrooms and bathrooms •The neighborhood
Inspections Contract
Appraisal
Title Commitment
Making M a k i n g t thhe e o offer ffer Based on your research, notes, finances and the Based on your research, notes, finances and the properties you’ve viewed, you’ve finally found the properties you’ve viewed, you’ve finally found the home home that that meets meets your your criteria. criteria. You’re You’re ready ready to to make make an offer. offer. An offer includes the price you would like an to pay for the home in question. How much you will An offer includes the price you would like to pay for offer couldindepend onHow finances, the home question. muchcomparative you will offer prices could depend on finances, comparative of other of other homes in the market, as wellprices as private homes in the market, as well as private property and property and appliances to include in the sale. The appliances to include in the sale. offer also includes an earnest money check or good The offer alsowhich includes anamount earnestofmoney faith deposit, is an money check that or good faith deposit, which is an amount of money demonstrates your commitment to the property. that demonstrates your commitment to the property. AA good notnot thethe same as aasdown goodfaith faithdeposit depositis is same a down payment, which is considerably more. The amount payment, is considerably more. The amountofof the deposit might be between one and three percent the deposit might be between 1-3% of the purchase of the purchase price and should go to a third party price should to a third which mighttitle be a whichand might be go a legal firm, party escrow service, company, or brokerage—not seller. (A—not receipt legal firm, escrow service, or to titlethe company to is always recommended.) And if the transaction is not the seller. (A receipt is always recommended.) And if completed for whatever reason, the deposit should the transaction is not completed for whatever reason, be returned. the deposit should be returned. Also in the offer are Also in the offer are items in the house, including items in the house, including appliances that would appliances that would be part of the sale and repairs be of the sale, and repairstoyou would require the youpart would require the seller make, prior to the closing. Dates should be mentioned the offer seller to make, prior toalso the closing. Datesinshould also including the closing date and the move-in date. Fees be mentioned in the offer including the inspection associated with the sale and who will be responsible dates, the should closingbe date, and the move-in date. for each, determined. The offer will Fees also declare what thethe consequences would beresponsible as a result associated with sale and who will be of a breach of contract. for each, should be determined. The offer will also
declare what the consequences would be as a result of a breach of contract.
Final Docs to Lender
Closing
Contingencies help offer protection on the way Contingencies help offer protection on the way toward finalizing a transaction. While a seller could toward finalizing a transaction While a seller could accept without contingencies and accept aa competing competingoffer offer without contingencies a speedier youconsider shouldcertain consider aand speedier process,process, you should certain risks. For example, you can ensure that a risks. For example, you can ensure that a contract contract could be finalized contingent upon could be finalized contingent upon receiving written receiving written loan approval, and that you can cover the cost of the purchase. You can also loan approval, and that you can cover the cost of make the transaction contingent on successful the purchase. You can also make the transaction inspection results and the completion of any contingent on successful inspection results and the major repairs or deductions equal to the value of those repairs. If you own a home and need to sell it to completion of any major repairs or deductions equal prior to purchasing a new home, the purchase can the value of those repairs. If you own a home and need be contingent on the successful sale of your to sell it prior to purchasing home, purchase previous home. Deadlines a new should be the assigned to each contingency. can be contingent on the successful sale of your previous home. Deadlines should be assigned to each contingency.
T h e closing closing The This process that that takestakes place place during during a meeting This isisthethe process a meeting of the parties involved in which isthe of the parties involved in which the transaction transaction is completed and the title of the completed and the title of the property is passed from property is passed from seller to new owner. seller the closing, the buyer Beforeto new the owner. closing,Before the buyer conducts a inal walk-through of the home to make the conducts an initial walk-through of the sure homethat to make property is as it was when you viewed it and that all sure that the property is as it was when you viewed it repairs that may have been stipulated in the offer and allcompleted repairs thattomay have been stipulated in havethat been satisfaction.
the offer have been completed to satisfaction. During During the closing, paperwork that has been the closing, paperwork that has been prepared by all prepared by all parties involved, including the parties (including the Advisors, lender agents,involved the bank providing the the mortgage, attorneys the andmortgage, title companies, areand signed. providing attorneys title company), are signed.
TH E PU RC HAS E P ROCES S
Contact Your Advisor
Loan Qualifications
to determine requirements, preferences, and final qualifications
Contact a loan officer; discuss financial resources & obtain pre-qualification letter.
Tour available properties with your Advisor and learn about different opportunities
Present & Negotiate Offer
Inspections & Disclosures
Your Advisor will present/ negotiate terms with listing agent.
Must be approved by all parties along with the Title Commitment as permitted by the contract.
Find the Perfect Home
Home Search
Discuss strategy with your Advisor and decide on an offer.
Submit Loan Application
to lender with all necessary documents.
Escrow Opened
Submit earnest money deposit to escrow.
Negotiate Repairs
If critical issues are discovered in disclosures, inspections, etc., as permitted by contract.
Title Commitment
Issued in response to application for title insurance.
Underwriting & Appraisal
The lender will review buyer’s files in underwriting if loan is needed. Appraisal establishes value of property.
Remove Contingencies
Inspection, Appraisal, Financial
Homeowner’s Insurance
Sign Documents
Sign loan documents, Select an insurance company and coverage, then give escrow documents, etc. at title insurance agent and lender and escrow company escrow information
Down Payments & Loan Funding
Lender sends funds to title company.
Record/ Transfer
Deeds are recorded at County Recorder’s Office.
T HE E SC ROW PROCES S Escrow Holder Duties •
Serves as a neutral third party and the liaison between all parties involved
•
Requests a Preliminary Title Report to determine the status of the title to the property
•
Prepares the escrow instructions
•
Complies with lender’s conditions and prepares necessary documentation
•
Requests payoff demands for anything to be paid through escrow
•
Receives closing instructions, documents, borrower’s funds and reviews file to determine that all conditions have been met
•
Records the Deed and other related documents
•
Closes the escrow
•
Disburses funds as authorized by the instructions, including charges for title insurance, recording fees, lender fees and loan payoff
•
Issues the Title Insurance Policy for the borrower and the lender
What do I need to provide? You may be asked to complete a Statement of Identity and a Consent to Communicate due to privacy laws as part of the paperwork. Because many people have similar last names, the Statement of Identity is used to identify the specific person in the transaction through such information as date of birth, social security number, etc. This information is considered highly confidential.
When do I sign escrow instructions? Approximately 4-6 days before closing, the title and escrow company will contact you or your agent to schedule a signing appointment. You will need to bring the following: 1. Driver’s License or ID for each signer. 2. Any trust paperwork. 3. Address or bank information for proceeds, if not picking up check. 4. Funds in form of cashier check or wire if purchasing simultaneously.
C O MM O N M O R T G AGE QU ESTI ON S Am I bett er off rent ing or buying a home?
The decision to rent or buy a home differs for everyone, as there can be benefits to both, depending on how long you plan to live in your home. We can help you weigh the pros and cons to see which option is best for you. If you decide buying a home is in your future, we have amazing lender connections throughout the area to refer you to.
How much do I need for a down payment?
Your down payment requirements will depend on your lender, the type of home loan you choose, and the type of property you are buying. Your required down payment can range anywhere from 0-20% of the home’s purchase price. Lenders offer a variety of different loan programs and each program has different rules regarding the down payment required.
What are t he advantage s How long doe s it take to of a home purchase? buy a home? The American Dream, right?! Buying a home gives you a sense of investing in a community you love and pride for achieving home ownership. Additionally, financial benefits come into play such as tax savings, building home equity and no longer paying rent to someone else. Interest rates are still at record lows and with many unique down-payment options available, a home purchase may be easier than you think!
With newer guidelines designed to simplify and consolidate some of the required loan disclosures, it changes the timing of some activities in the mortgage process. Thirty to 45 days is the new normal but each situation is different.
What’s my first st ep?
Mainly loan origination and the cost to close. The down payment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.
The Mortgage Pre-Approval. Unless you are paying cash, you will need to get a mortgage. In order to know how much home you can afford, you will need to get pre-approved for a loan. Ask for recommendations, and meet with a lender to get the process started.
How much can I afford to borrow?
What ot her fee s can I expect, be side s down payment?
Everyone’s financial situation differs and it’s important to recognize what you can comfortably afford to borrow. What are t he closing costs? Your loan officer will help you determine this while [in Closing costs include items such as appraisal fees, title general] factoring in: insurance fees, attorney fees, pre-paid interest, and • Your debt-to-income ratio (this is your total monthly documentation fees. These items are different for each payments as a percentage of your gross monthly customer due to differences in the type of mortgage and income) the property location, etc. You will receive an estimate of • The amount of cash you have available for a down your closing costs in advance of your closing date. payment and closing costs • Your credit history • The value of the property you want to purchase
HE LPF U L RE M INDERS & S OU RC E S O F AS SI STANC E
Paying Off Your Existing Loans
Identification
Unless the buyers assume an existing loan on the property,
Please bring appropriate identification with you to the title
all loans must be paid off at the close of escrow. The seller
company so the Notary Public can verify your identity. There
must furnish complete debt information to the Escrow
are several acceptable forms of identification that may be
Officer and real estate Advisor. The seller must be prepared
used. These include:
to provide the name, the loan number, and address and
•
A current driver’s license
phone number of each lender. The Escrow Officer will
•
Passport
need this information to order a loan payoff demand and
•
State of Montana Department of Motor Vehicles ID Card
subsequently pay off the loan or other encumbrances.
Tax Deferred 1031 Exchange Homeowner’s Association
If the property you are selling is an investment property
Information may also be required if you are selling a
and the proceeds from the sale are going to be used to
condominium, townhouse or property located in a planned
purchase other “Like-Kind” investment real estate, you
unit development. All of this information will help assure a
should consider a tax- deferred exchange. Exchanging is an
timely closing of the escrow.
Internal Revenue Service (IRS) recognized approach to the deferral of capital gains taxes. The IRS recognizes the use of
Power of Attorney
an Accommodator or Qualified Intermediary throughout your
In the event that you wish to use a Power of Attorney,
transaction as a Safe Harbor.
arrangements must be made one to two weeks in advance
To accurately approach an exchange, become familiar with
with the Escrow Officer. If the Title and Escrow firm does not
the rules and regulations underlying such a tax-deferred or
draft the Power of Attorney, their legal staff must approve it.
tax free transaction. We suggest you consult your tax lawyer
These arrangements should be made as early as possible.
or tax professional. For further information contact NCS Exchange Professionals at (866) 873-1031 or on the Internet www.NCS1031.com.
H E LP F UL R E M IND ERS & SO U RC E S O F ASSISTANCE
Before You Move
Medical Histories
•
Post Office: Give forwarding address
•
•
Change accounts, credit cards, subscriptions: Notice requires several weeks
•
Ask doctor and dentist for referrals; transfer needed for prescription, eyeglasses, X- rays
•
Obtain birth records, medical records, etc.
Friends and relatives
Church, Club, Civic Organizations Bank
•
Transfer memberships; get letters of introduction
•
Transfer funds, arrange check cashing in a new city
•
Obtain cashier’s check necessary for closing real estate
Pets
transactions; be sure to ask your bank if this check is
•
drawn on a Montana institution •
Arrange credit references
Ask about regulations for licenses, vaccinations, tags, etc.
•
Plan for transporting pets; they are poor traveling companions if unhappy
Insurance •
Notify company of new location for coverage’s: Life,
At Your New Home
Health, Fire and Auto
•
Check on service of internet, gas, electricity, cable, sewer, trash, and water
Utilities •
•
Gas, electric, water, sewer, internet, cable, propane,
Check pilot light on stove, hot water heater, incinerator, and furnace
trash
•
Have appliances checked
Get refunds on any deposits made
•
Ask Mailman for mail he may be holding for your arrival
•
Have new address recorded on driver’s license
Delivery Service
•
Visit city offices and register for voting
•
•
Register car within five days after arrival in state or a
•
Laundry, newspaper, etc.: changeover of services
penalty may have to be paid when getting new license •
Register children in school
•
Arrange for medical services: doctor, dentist, etc.
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TIT L E INS UR ANCE Why do I need Title Insurance? Many homeowners assume that when they purchase a piece of property that possession of a deed to the property is all they need to prove ownership, but title insurance serves as basic risk elimination. A Preliminary Title Report outlines the conditions under which a title will be insured. Once the new deed and loan documents are recorded, a title insurance policy is issued to the new owner and lender. This protects both parties against loss due to title defects. Any undisclosed claim (covered by the owner’s policy of title insurance) that threatens ownership of the home will be dealt with or will be reimbursed exactly as the policy of title insurance provides.
What protection is obtained with a Title Policy? Title insurance offers protection against claims resulting from various defects (as set out in the policy) which may exist in the title to a specific parcel of real property, effective on the issue date of the policy. For example, a person might claim to have a deed or lease giving them ownership or the right to possess your property. Or perhaps a person claims to hold an easement giving them a right of access across your land, or claims to have a lien on your property securing repayment of a debt. A title insurance policy contains provisions for the payment of the legal fees in defense of a claim against the property covered under the policy. It also contains provisions for indemnification against losses, which result from a covered claim.
TIT L E INS UR ANCE What does a Title Company do? Simply put, whenever someone decides to buy or refinance property, title companies have the ability to check public records regarding the history of that property. Looking for unclear liens, claims or easements are part of what we do. Sometimes distant relatives may have a claim on the property without the seller’s knowledge. People have even fraudulently sold houses that do not belong to them. A title company performs a vital, yet hidden role in guaranteeing the security of your home. Just like car insurance, you never realize how important it is until the unexpected happens. This is why lenders require title insurance to protect the lender against loss due to unknown title defects. Many title companies also offer escrow services. When buying, selling or refinancing real estate, a neutral third party is needed to handle all deposits of funds, documents, special reports and other important papers. It is also the Escrow Officer you will meet with to sign all the documents prior to your property closing escrow.
What protection will I receive from my Title Policy? A Title Insurance Policy pays for legal fees in defense of a claim against property covered under your policy. It also contains provisions for indemnification against losses that result from a claim. The title insurance premium is paid at the close of escrow and no additional premiums are paid as long as you own the property.
M E TH O D S OF HOLDING TITLE
T I T L E INSU R A NCE PRODUCT COMPARISON
IM PO R TAN T MONTANA R E A L PROP ER T Y TAX DATES NOVEMBER 30 First Installment Due
DECEMBER 1 First Installment Becomes Delinquent
JANUARY 1 Calendar Year Begins
MAY 31 Second Installment Due (July-December)
JUNE 1 Second Installment Becomes Delinquent
THE MOV ING EXPERI ENC E Moving is change. Whether you do it yourself or have it done for you, it is the removal, relocation, and replacement of all your treasured possessions to a completely new surrounding. It is an opportunity to shed belongings and an opportunity to acquire new ones. Above all, moving is a process with many steps.
T wo week s before moving
As soon as possible
•
•
•
•
•
Decide how you’re going to move your furniture and personal belongings, either by hiring a moving company or renting a truck, and do the research. Get recommendations from your real estate Advisor and when getting estimates, be sure to ask about availability and additional costs of materials and tools such as boxes, tape, covers, packing material, and a hand truck or appliance dolly if you’re moving yourself. Start gathering the necessary moving supplies. Take stock of your possessions and decide what will be moved and what could be removed. This is an opportunity to sell unwanted items online, through a yard sale, or through donations. Notify others of your new address: charge accounts, subscriptions, relatives and friends, and your past/current employer to make sure that you receive W-2 forms and retirement account information. Save your old address labels to speed up filling out change-of-address forms for your new address. Notify federal and state taxing authorities or any governmental agency necessary.
•
• •
•
Notify and get refunds from your present utilities: gas, electric, water, cable, sewer, internet, and trash. Arrange for services at your new address. Transfer your address with the US Postal Service Begin using up what you can’t move, like cleaning supplies, food, etc. Recruit people to help and arrange for someone to take care of your pets and children during the move. Confirm moving company or rental truck arrangements. Transfer your bank accounts. Draw up a floor plan of where your furniture should go. Purchase moving insurance.
T wo days before moving • •
Keep moving materials in a separate location from where the packing is happening. Gather all valuables, jewelry, important papers (birth certificates, deeds, documents) to take with you personally.
On moving day • • •
•
Plan on spending the entire day with the movers. Don’t leave until they have gone. Record all utility meter readings (gas, electric, water, propane, etc.) Make final walk through of the house, including storage areas and attic to make sure everything is empty. Lock all windows and doors and drop off keys with your landlord or Advisor.
ARE A HIGHLIG HTS
AR EA HIG H L IGH T S The southwest Montana area is rich with mountain views and outdoor attractions. Downtown areas filled with nationally praised dining, upscale lodging, and locally The southwest MontanaWith areaoutdoor is rich with mountain owned businesses. activities views outdoor attractions. Downtown areas filled year and round and national parks a short drive with nationally praised dining, upscale lodging, and outside of town, southwest Montana has locally ownedfor businesses. something everyone.With outdoor activities year
round and national parks only a short drive outside of Fromsouthwest quaint Montana small town celebrations to town, has something for everyone.
multiple ski resorts in the area, there’s an eventquaint to attend every weekend no matter From small town celebrations to multiple ski the time of year. resorts in the area, there’s something to attend every weekend no matter the time of year.
Simply delighting in local craft beer or enjoying a savory local afood Simply delighting in localdish craft from beer oraenjoying truck dish can forcan be celebration. savory from be a localcause restaurant cause for Whether you’re an outdoor enthusiast, celebration. Whether you’re an outdoor enthusiast, aa theater-goer or someone theater-goer, or someone who loveswho to shoploves ‘till youto shop ‘til you drop, the area has an activity drop, the area has an activity to fit your interests and to fit your interests and budget. budget. drive Big Ski isRaesor t is from a short Big SkySky Ski Resort short drive Bozeman from Bozeman skiers ofhitalltheability where skiers of all where ability levels can slopes. The levels can hit the area slopes. The local quaint downand charming downtown features eateries town area features local eateries and shops. shops. Big Sky isn’t just a winter town; with frequent Big Sky isn't just a summer winter town, in thetaking to outdoor concerts in the and BMXers summer outdoor the mountain for epicconcerts bike rides.take place down town and BMX bikers take to the mountain forfishing epic bike rides. Fly is a way of life in Montana. With world class rivers such as the Madison, Yellowstone, and Gallatin carving into the southwest Montana geography, Fly Fishing is a way of life in Montana.there isWith no shortage of great sports for fishing enthusiasts. rivers such as the Yellowstone, Madison, With extra hours of sunlight in the summer, and Gallatin carving into the Montanahitting the river after workthere's is a wayno of shortage life aroundof Montana. geography, great spots
for fishing enthusiast. With extra hours of
Montana University brings a vibrant energy sunlightState in the summer, hitting the river after towork the town of Bozeman. MSU is the state’s largest is a way of life around Montana. university and offers baccalaureate degrees in 60 fields, master’s degrees in 68 fields, and doctoral Montana State University brings a degrees in 35 fields throughout its nine colleges. The vibrant energy to the town of Bozeman. MSU MSU Bobcats bring a youthful energy and passion for is the state's largest university. The university the outdoors to the Bozeman area.
offers baccalaureate degrees in 60 fields, master's degrees in 68 fields, and doctoral degrees in 35 fields through its nine colleges. The MSU Bobcats bring a youthful energy and passion for the outdoors to the Bozeman area.
G L O SSARY OF TERMS These definitions are to acquaint the home-buyer with terms commonly used in real estate transactions. The terms are intended to be general and brief and are not complete and wholly accurate when applied to all possible uses of the term. Please consult your real estate agent for more information or questions regarding specific terms.
Adjustable Rate Mortgage (ARM) A mortgage instrument with an interest rate that is periodically adjusted to follow a pre-selected published index. The interest rate is adjusted at certain intervals during the loan period.
Adjustment Period The length of time between interest rate changes on an ARM. For example, in the case of an ARM loan with a one-year adjustment period, the interest rate may change once each year.
Agency Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the principal. Agency involving real property should be in writing, such as listing, trust, powers of attorney, etc.
American Land Title Association (ALTA) A national association of title insurance companies, abstractors, and agents. The association adopts standard policy forms.
Amortization Repayment of a mortgage debt with periodic payments of both principal and interest, calculated to retire the obligation at the end of a fi xed period of time.
Annual Percentage Rate (APR) A term defined in section 106 of the Federal Truth in Lending Act (15 USC 1606), which expresses on an annualized basis the charges imposed on the borrower to obtain a loan (defined in the Act as “fi nance charges”), including interest, discounts and other costs.
Appraisal An opinion or estimate of value. Also refers to the process by which a value estimate is obtained. Assignment The transfer of ownership, rights, or interests in property, as in a mortgage, lease, or deed of trust. Mortgages and other security instruments are regularly assigned from one investor to another and commitments by HUD/FHA to insure mortgages may be assigned by one originating lender to another before insurance.
Beneficiary The person who is entitled to receive funds or property under the terms and provisions of a will, trust, insurance policy or security instrument. In the case of a mortgage loan, the benefi ciary is the lender.
Broker or Agent One who is licensed by the state to carry on the business of dealing in real estate. A broker/agent is employed on a fee or commission basis to bring together buyers and sellers, landlord and tenant, or parties to an exchange, and assist in negotiating contracts between them.
Cap The limit on how much an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.
Certificate of Reasonable Value (CRV) A document that establishes the maximum value and loan amount for a VA guaranteed loan.
Closing Costs The costs incurred to purchase real estate. These may include loan fees, title fees, appraisal fees, etc. Closing Statement The financial disclosure statement that accounts for all of the funds received and expected at the closing, including deposits for taxes, hazard insurance, and mortgage insurance.
G L O SSARY OF TERMS Commission An agent’s compensation for negotiating a real estate or loan transaction, often expressed as a percentage of the selling price.
Contingency Clause A provision in some ARMs to a fixed rate loan, usually after the first adjustment period. The new fixed rate is generally set at the prevailing interest rate for fixed rate mortgages. This conversion feature may cost extra.
Deed The document by which title to real property is transferred or conveyed from one party to another. Deed of Trust Type of security instrument in which the borrower conveys title to real property to a third party (trustee) to be held in trust as security for the lender, with the provision that the trustee shall re-convey the title upon the payment of the debt, and, conversely, will sell the land and pay the debt in the event of a default by the borrower.
Deposit A sum of money given to (1) bind a sale of real estate, or (2) assure payment or an advance of funds in the processing of a loan. Also called Earnest Money.
Discount Points A negotiable fee paid to the lender to secure financing for the buyer. Discount points are up front interest charges to reduce the interest rate on the loan over the life, or a portion, of the loan’s term. One discount point equals one percent of the loan amount.
Due on Sale Clause An acceleration clause that requires full payment of a mortgage or deed of trust when the secured property changes ownership.
Earnest Money A deposit made to bind the conditions of a sale of real estate. Easement A limited right of interest in land of another that entitles the holder of the right to some use, privilege or benefit over the land.
Escrow The process in which a neutral third party holds money and documents for delivery to the respective parties in a transaction on performance or established conditions.
Federal National Mortgage Association Commonly known as Fannie Mae. A privately owned corporation created by Congress to support the secondary mortgage market. It purchases and sells residential mortgages insured by FHA or guaranteed by VA, as well as conventional home mortgages.
Finance Charge The total cost a borrower must pay, directly or indirectly, to obtain credit according to Regulation Z. Foreclosure The legal process by which property is sold to satisfy an unpaid debt in the event of default on terms or payments of a mortgage.
Good Faith Estimate (GFE) A document that tells borrowers the approximate costs they will pay at or before settlement, based on common practice in the locality. Under requirements of the Real Estate Settlement Procedures Act (RESPA), the mortgage banker or mortgage broker, if any, must deliver or mail the GFE to the applicant within three business days after the application is received.
G L O SSARY OF TERMS
Graduated Payment Mortgage A residential mortgage with monthly payments that start at a low level and increase at a predetermined rate.
Grant Deed One of many types of deeds used to transfer real property. Hazard Insurance Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.
Homeowner’s Association (1) An association of people who own homes in a given area, formed for the purpose of improving or maintaining the quality of the area. (2) An association formed by the builder of condominiums or planned developments and required by statute in some states.
Impound Account An account held by a lender for the payment of taxes, insurance or other periodic debts against real property.
Index A measure of interest rate changes used to determine changes in an ARM’s interest rate over the term of the loan.
Joint Tenancy A means of ownership in which two or more persons own equal shares in real property. Upon the death of one tenant, his/her share passes to the remaining tenant(s) until title is vested in the last survivor.
Legal Description A description by which real property can be definitely located by reference to surveys or recorded maps. Sometimes referred to simply as “the legal address.”
Lien A legal hold or claim on property as security for a debt or charge. Loan Commitment A written promise to make a loan for a specified amount on specifi c terms. Loan to Value Ratio The relationship between the amount of the appraised value of the property and the loan, expressed as a percentage of the appraised value.
Lock-in A guarantee by the lender of a particular loan rate. The loan must fund before the lock expiration in order to receive the guaranteed or “locked” rate.
Margin The number of percentage points the lender adds to the index rate to calculate the ARM’s interest rate at each adjustment.
Market Value An appraisal term denoting the highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.
Montana Land Title Association (MLTA) A Montana statewide association of title insurers and underwritten title companies. The association adopts standard title policy forms.
Mortgage Payment A payment that is owed to the bank/lender each month toward repayment of the loan. The amount is determined by the terms of the loan: principal, interest rate, length of the loan, and periodic adjustments, if applicable.
G L O SSARY OF TERMS
Multiple Listing Service An exclusive listing, submitted to all members of an association, so that each may have the opportunity to sell the property.
Negative Amortization Occurs when monthly payments fail to cover the interest cost. The interest that isn’t covered is added to the unpaid principal balance, which means that even after several payments you may owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results in monthly payments that aren’t high enough to cover the interest.
Note A unilateral agreement containing an express and absolute promise of the signer to pay to a named person, order, or bearer a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning real property, is secured by a mortgage or trust deed.
Origination Fee A fee made by a lender for making a real estate loan. Usually a percentage of the amount loaned, such as one percent.
PITI ( Principal, Interest, Taxes and Insurance) The four major components of a usual monthly mortgage payment.
Point An amount equal to 1% of the principal amount of the investment or note. The lender assesses loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investments.
Power of Attorney An authority by which one person (principal) enables another (attorney-in-fact) to act for him. (1) General power authorizes sale, mortgaging, etc., of all property of the principal. Invalid in some jurisdictions. (2) Special power specif es property, buyers, price and terms.
Prepayment Penalty A penalty under a note, mortgage, or deed of trust imposed when the loan is paid before it is due.
Pre-Qualification Letter A letter that states a potential borrower’s fi nancial status to determine the size and type of mortgage available to him/her.
Principal (1) The amount of debt, not including interest. (2) The person who is served by an agent or attorney. Private Mortgage Insurance (PMI) Insurance written by a private mortgage insurance company protecting the mortgage lender against loss occasioned by a mortgage default and foreclosure. The premium is paid by the borrower and is included in the mortgage payment. Typically required if down payment is less than 20% of purchase price.
Processing (or Origination) Fees Fees that cover the administrative cost of processing the loan. These charges vary from lender to lender.
Promissory Note A promise in writing and executed by the maker to pay a specified amount during a limited time, on demand or at sight to a named person, or on order to bearer.
G L O SSARY OF TERMS Proration The method used in dividing charges into that portion which applies only to a party’s ownership up to a particular date.
Quitclaim Deed A deed operating as a release; intended to pass any title, interest, or claim, which the grantor may have in the property, but not containing any warranty of a valid interest or title in the grantor.
Reconveyance The conveyance to the landowner of the title, held by a trustee under deed of trust, when the performance of the debt is satisfied.
Recordation Involves filing for record in the office of the County Recorder for the purpose of giving constructive notice of title, claim or interest in real property.
Right of Survivorship The right of a survivor of a deceased person to the property of said deceased. A distinguishing characteristic of a joint tenancy relationship.
Statement of Information (SI) A confidential form filled out by buyer and seller to help a title company determine if any liens are recorded against either party. It is necessary to differentiate between parties with similar names. Also called a Statement of Identity.
Tenancy in Common An undivided ownership in real estate by two or more persons. The interests need not be equal. In the event of the death of one of the owners, no right of survivorship in the other owner exists.
Title Commitment A report prepared prior to issuing a policy of title insurance that shows the ownership of a specific parcel of land, together with the liens and encumbrances thereon which will not be covered under a subsequent Title Insurance Policy.
Title Insurance Policy A policy that protects the purchasers, mortgagee or other parties against losses. Uniform Settlement Statement The Standard HUD Form 1 required to be given to the borrower, lender and seller at, or prior to, settlement.
VA Loan A loan that is guaranteed by the Veteran’s Administration and made by a private lender. Vesting Denotes the manner in which title is held. Examples of common vestings are: Community Property, Joint Tenancy, Tenancy in Common, and Community Property with Right of Survivorship.
BIG SKY
BOZEMAN
223 Town Ave Minneapolis 2A 106 E Babock St 1C Engel &Center Völkers
LIVINGSTON
ENNIS
105 W Park St #5
222 E. Main
PO & Box 161950 Bozeman, Livingston, MT 59047 Engel Völkers U.S. Holdings, Inc. MT 59715 Big Sky, MT 59730 406.404.1960 406.946.0097 1601 Hennepin Ave · Minneapolis · MN 55403 406.924.7050 Telephone + 1 612-338-3836 · www.minneapolis.evrealestate.com
Ennis, MT 59729
406.551.7959
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