Your next chapter. Your next home. Your next escape. We always imagine ourselves in that next place, that next stage of our lives. Through Frank Hardy Sotheby s International Realty, your idea of next can be realized. We are Virginia’s best agents, who curate exper ences with incomparable attention to style and detail. We get to know you. We get to know what next is for you. Because, when you find it, noth ng compares to it Nothing compares to what s next
EXCELLENCE UNMATCHED
$69,000
AVERAGE SAVINGS FOR OUR BUYERS
*MLS REPORTING
DEDICATED TO YOU
Purchasing a property in today’s real estate market is more complex than ever Our goal is to provide you with a level of elite representation, guiding you through this complex process – advocating for you every step of the way Our team of sales advisors provide you with a calming, professional and stable force of experience throughout your property purchasing journey. From understanding your real estate goals to navigating the negotiation and offer presentation, Frank Hardy Sotheby’s International Realty simplifies the laborious process of selecting and purchasing the right property.
Navigating the Home Purchase Process
1,000+ SINCE 2003
BUYERS REPRESENTED
45+ YEARS IN BUSINESS
The oldest luxury firm in Charlottesville
When you hire a Frank Hardy Sotheby's International Realty real estate advisor, you're not just compensating them for the time and effort they put into one transaction; you're also benefiting from their years of experience and expertise. Having an experienced professional in your corner offers a competitive advantage when searching for your home and accessing local resources. A sales associate's broad perspective can provide a stabilizing force to assist you through what can be a challenging process.
Exclusive representation ensures that you will have a sales associate's utmost attention and loyalty. They assist you with the many tasks associated w th the home purchase process, but will only receive a commission if you purchase a home Here are ten reasons why working with a professional is the best choice you can make:
Deep Area and Lifestyle Knowledge
In add tion to providing you with access to all public listings, real estate agents have in-depth knowledge about the local real estate market, ncluding access to off-market propert es, pric ng trends, neighborhoods and what buyers should be looking for They use this knowledge to help guide you in making informed decis ons
Negotiation Skills
An experienced sales assoc ate is able to help ensure you get the best price and terms when purchasing a new home helping you to avoid overpaying. The skills your sales associate has gained through other transactions w ll help them bu ld a purchase strategy, evaluate and negotiate offers on your behalf.
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Networking
Real estate agents have a vast network of professional connections that they can recommend, from home nspectors to mortgage lenders These trusted relationsh ps can speed up processes or uncover opportunities you may not f nd on your own
Understanding Reports and Forms
Real estate transactions involve a lot of legal paperwork, from contracts to reports and disclosures.
An experienced sales associate understands the ns and outs of these contracts and can help you nav gate them, reducing the risk of costly m stakes
Problem Solving
Every real estate transact on has its unique challenges An experienced sales associate has likely encountered many of the hurdles you will face in a transaction and can use that experience to help you overcome any issues that arise.
Time-Saving
While you m ght see your sales associate during showings or clos ngs, there's a lot of work they do behind-the-scenes, from researching properties and coordinat ng with other agents to handling paperwork Their expertise streamlines the process, ult mately saving you time.
Emotional Buffer Risk Mitigation
Buying and selling a home can be an emotional experience for both parties. Your sales assoc ate serves as a buffer, ensur ng that emotions don't cloud judgment or dera l a transaction
Future Guidance
Many sales professionals provide value even after a transact on is complete, offer ng advice on home mprovements, market trends or when might be a good t me to buy or sell again.
Mistakes in real estate can be costly. Whether it s m ssing a disclosure or not understanding a cont ngency in a contract, an experienced sales assoc ate can help mitigate these risks
Continual Learning
The real estate market and its regulat ons are continually evolving
Experienced sales assoc ates invest in ongoing education and training to stay updated, ensuring they provide the best serv ce to their clients.
In essence, the comm ssion is compensation for the hours your sales associate and brokerage have already nvested to develop the knowledge and expert se needed to guide you to a ratified offer and through the purchase of your home.
Your Frank Hardy Sotheby’s International Realty sales associate is an experienced professional backed by exceptional leadership and support teams, all dedicated to providing you with a peerless level of serv ce.
UNDERSTANDING AGENCY
Frank Hardy Sotheby’s International Realty will enter into an exclusive buyer-broker agreement with you that establishes an agency relationship in wh ch your Frank Hardy Sotheby's International Realty sales assoc ate will represent you in all aspects of the purchase of a home This agreement creates a fiduciary relationsh p where Frank Hardy Sotheby’s International Realty and your sales associate have duties to you of loyalty, honesty, obed ence, confidentiality and reasonable care A better way to put it is this agreement requires your sales associate to act in your best interests at all times
Dual Agency
Brokerages can legally represent both a buyer and a seller on the same transaction; they may even represent multiple buyers on the same sale. A sales associate may also represent both s des of a transaction, but only if you agree n writing.
UNDERSTANDING COMPENSATION
Brokerage Commission
The buyer-broker agreement is a contract for professional services between you and Frank Hardy Sotheby’s International Realty n exchange for the payment of a commission The amount a brokerage charges is not fixed by law and the commission amount is set by the brokerage
Compensation Division
The compensation paid for buy-side representation is shared between the sales associate and the brokerage to cover bus ness operations and necessary expenses
Who Pays Commission?
Sellers often offer to compensate buyer’s sales associates out of the proceeds of the transaction and include the commissions for all sales associates in the purchase price. In the event a seller does not include commissions in the purchase price, buyers can request that the seller pays the commiss on due to the buyer's broker in the purchase agreement, allowing the commission to be incorporated nto the final sale price and financed if there is a loan Finally, buyers can directly pay comm ssions to their sales associates n the event it is more advantageous for them
WHY FRANK HARDY SOTHEBY'S INTERNATIONAL REALTY? SUCCESSFUL TOGETHER
At Frank Hardy Sotheby’s International Realty, we don’t define luxury as a price point. Instead, luxury represents high quality serv ce, knowledge and an exper ence that every client receives regardless of area, size of home or price point.
OUR MISSION
It can be easy to assume that all real estate brokerages and sales associates are the same. The truth is, we’re passionate about be ng different our unique qualities are at the heart of everything we do. For us, our responsibility goes beyond ass sting our clients in the purchase and selling of real estate. We’re ambassadors of our commun ties and our industry. We look at each moment as an opportunity to bring irreplaceable value to our clients around the world, and in the process, redefine the real estate industry Luxury isn’t tang ble It isn’t a price tag Luxury s an experience and a commitment to going beyond the status quo Being different isn’t for everyone, but to us, it is everyth ng
LOCAL REACH AND COMPANY CULTURE: THE POWER OF SHARED COLLABORATION
Our Goals: Be exceptional to one another and be exceptional in business In today's real estate industry, trusted local connections play a v tal role in market ng to the right aud ence, maximizing opportunities and facilitating successful transactions Our company culture is built around teamwork, shared collaboration and supporting the commun ties that we call home Virg nia boasts a dynamic landscape filled with un que cities, towns and ne ghborhoods each with ts own traits and lifestyle The importance of partnering with a local professional w th deep market knowledge is paramount
Our local reach is unmatched our leadership team, brokers and sales professionals gather in companywide sales meetings to exchange industry information and touch base on new listings and buyer needs As a result, our clients receive valuable insight nto current market trends, changing property values, new zoning regulations and evolv ng community dynamics By leveraging cultivated internal connections, our sales assoc ates can access off-market l stings, tap into niche market, and bu ld strong relationships with other ndustry stakeholders nclud ng contractors, inspectors and lenders
Our company culture fosters collaboration and partnership because of th s, our sales professionals offer better representation and personalized serv ce tailored to the unique needs and preferences of each client In an increasingly competitive real estate landscape, where access to accurate information and timely opportunit es is v tal, the partnersh p between company culture and local reach remains ind spensable for thriving in today’s dynamic ndustry
The staff and management of Frank Hardy Sotheby’s Internat onal Realty are a unique team of talented, diverse individuals who have comb ned their efforts in the goal of delivering the most effective real estate services to our clients. Our clients have the daily support of n-house marketing, transaction coord nat on, operations, relocat on, photography and videography
45OVER YEARS IN BUSINESS
PROVIDING A STRONG FOUNDATION FOR SUCCESS
LEADERSHIP
Our executive team is composed of seasoned brokers with deep market expertise they are vetted professionals who play a vital role in providing strategic direction and comprehensive support for our sales agents, setting a visionary course to best serve our clients in today’s evolving industry
ACCOUNTING
AND
Our Operations Director works to ensure our brokerage operates smoothly day in and out completing wire transfers, directing calls, answering questions and generally assisting our agents to ensure you – our clients – receive the highest level of service possible.
TRANSACTION MANAGEMENT
We coordinate and oversee each transaction from start-to-finish
Manage all listing documents to ensure an organized
streamlined and on-schedule process for our sales professionals and their clients.
MARKETING
Our marketing provides award-winning creative services for our clients and their properties— ensuring our messaging is impactful, effective and visually compelling. Utilizing graphic design, photography/video, digital campaigns and more
STEPS TO A SUCCESSFUL PURCHASE
THE JOURNEY OF HOMEOWNERSHIP
In add tion to pre-approval, lenders can estimate the down payment and closing costs for homes in your price range and determine what your monthly payment will be. Your lender can also help you to understand the different types of loans and programs that you may qualify for. INITIAL CONSULTATION FINANCIAL ASSISTANCE AND PRE-APPROVAL 2
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An nitial meeting is important to ensure that you get access to properties both on and off the market, as well as exclusive and upcoming listings. We want to help prepare you to be able to write offers quickly in a competitive market when needed
Understanding Your Real Estate Goals
• • Purchase t me frames
Past exper ence purchasing real estate
Risk tolerance
F nancing and pre-approval if a loan is needed
Refining Property Search Criteria
Location and neighborhood
Price range
Size of home, style and amenit es
Specif c non-negotiables and requirements
Condit on of home and flexibility to make improvements
School d stricts, commute, walkab lity, etc.
Before beginning your home search, it is important to evaluate your f nancial s tuation and secure preapproval from a lender f you plan on f nancing your home. Your lender is able to do many things to assist you with your financing needs:
• • • Prov de a l st of lenders who can pre-qualify you and confirm your price range
Suggest that you obtain pre-approval subject to the property selection
Collaborate on any complex purchasing scenarios, such as a bridge loan so you can buy before you sell
• Working with a Lender
Prov de requested documentat on
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LOCATING AND VIEWING PROPERTIES
Our sales associates view properties continually, follow local market dynamics and are here to guide you in finding the right home. Your sales profess onal can assist you in many ways:
• Determ ne property selection and refine search criteria based on your needs and wants, location, s ze, amenities, style and price range
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Set up automated list ng alerts that meet your search criteria
Provide quarterly market updates
Present off-market or pre-market listings as they arise
Communicate with sales associates to schedule private showings
Map out and tour properties together
Recommend properties that are available to view n-person at open houses
Provide monthly market reports
Review the pros and cons of each home after viewing
Evaluating Selected Properties
A sales associate can help you professionally assess how a property compares to others currently on the market or that have recently sold:
• Request the Disclosure Package and other nformation from the l sting agent
Discuss if you may want to get any add tional inspections or reports and then determine the time frame for needed contingenc es
If the home is in an HOA, and the seller has not already provided the HOA docs, your sales associate can expla n the typical timing of the process to receive and review the documents
Recommend a real estate attorney for closings
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WRITING A COMPETITIVE OFFER
Once you have found a property that meets your needs, your sales associate will assist in determining the optimal price and terms before skillfully negotiating on your behalf.
• Communicate w th the listing agent to get the best nformation possible about competing offers and sellers' preferences regard ng terms and the t meline for offer submission
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Review comparable sales and discuss the price and terms for your offer
Prepare a compelling offer that ncludes all necessary advisories and disclosures; attach the loan approval letter along w th proof of funds when submitt ng the offer
Get s gnatures on all offer documents to provide a complete offer
Presenting Your Offer
Real estate professionals affiliated with reputable brands which are highly regarded by other agents often play a crucial role in assisting their clients in evaluating competing offers
• • • Present the offer in-person or by email in a timely manner
Maintain communications and forward any counter-offers for review
Negotiate on your behalf and write any addenda or subsequent counter-offers
Negotiate Successfully
After presenting an offer you should be prepared to negotiate on many key factors ncluding the initial price, deposit amount, nclusions plus dates and deadlines In addition to knowing your budget and requirements, working with an assoc ate well-versed in negot ation s vital to ensuring you don't commit to any addit onal costs beyond your limits during the negotiation process. Your sales associate can help you nav gate the many situations that may ar se before reaching an accepted offer.
• Multiple Offers: High-demand, low-inventory areas often create additional compet tion, so you should be prepared to bid against other buyers. In these situations, due-dil gence is required on your part and the part of your sales assoc ate to ensure the offer you submit s strategic, competitive and reflects what you are willing to pay for the property.
OFFER ACCEPTANCE
Once negotiations have concluded and both parties have come to an agreement, you will move on to the next steps in the buyer process. You will have a set period of time in which to satisfy legal conditions agreed to in your contract, including completing a home inspection and securing financing Once these conditions have been removed you have a legally binding document
Congratulations! Th s is ust the start of the transaction process. Your sales associate will gu de you through the requ rements that are contained in your accepted offer
CONTRACT RATIFIED
CONDUCT INSPECTION
ARE REPAIRS NEEDED?
CONTINGENCIES, INSPECTIONS AND DEADLINES YES
Contingencies such as inspections, f nancing approvals and appraisals all serve as safeguards that allow buyers to thoroughly assess the property and secure necessary financing There may be numerous contingencies during the purchase process; your sales associate is there to help you navigate through them
• • • • • • Recommend or help you locate inspectors
Arrange inspection appointment t mes
Forward and review inspect on reports with you
Communicate with your lender as requested
Ass st the appraiser with access to the home and provide comparables, as needed
Your attorney or lender provide resources for homeowners insurance and options this is a crit cal step in the process given the current insurance climate
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Ass st you n making a request for repair, if applicable
Property Inspection
As part of your due diligence, you can request a multitude of inspections and evaluat ons of the home We encourage you to meet the inspector at the end of any inspect ons so they can po nt out any concerns about the property and answer any questions you may have. They will give you a report for your review that identif es potential areas of concern. If repairs are needed, your sales associate can assist in requesting that the seller complete them, or if the condition of the home is unacceptable you may cancel the contract provided contingencies have not been removed.
REQUEST REPAIRS
LAST REPAIR OFFER REJECTED NO
SELLER AGREES TO NONE OR SOME REPAIRS
NEGOTIATE REPAIRS
SELLER AGREES TO PERFORM ALL REPAIRS
CONTRACT
RELEASED
BUYER ACCEPTS LAST REPAIR OFFER
CONTINUES
CONTINUES
Meeting contingency deadlines is crucial throughout the real estate transaction this ensures the smooth progression of the deal, while also protecting the interests of all parties Timeframes for these deadlines can vary greatly from contract to contract, h ghlighting the importance of your real estate professional’s expertise to keep the transaction on schedule
Adher ng to deadlines is essent al for ma nta ning trust and transparency between parties and preventing potent al delays or legal disputes Below is an example of some of the deadlines and the typical timeline you can expect during the purchase process beginning once your offer has been accepted to the final possession of your new home.
Acceptance
Seller's Disclosure Deadline:
Seller must provide requ red documents, including but not limited to; property cond tion, Title Insurance commitment, HOA and CC&R’s, any rental agreements in place after closing, evidence of water rights, any known env ronmental problems and building or zoning code violations.
Earnest Money Due:
Your earnest money will be held in our Brokerage Trust Account until settlement, at which t me, these funds will be credited toward the money you'll be bringing to the table.
Buyer Due Diligence Period:
During this time you will review and approve the contents of the Seller Disclosures plus any other tests, evaluations and verifications of the property deemed necessary or appropriate.
Finance and Appraisal Deadline:
If you are obtaining a loan and have made your purchase contingent on f nancing, you will work w th your lender to get final loan approval
If the purchase s cont ngent on appraisal, it must be completed during this time. If the home appraises below the purchase price, your sales associate will guide you through your opt ons
Final Walkthrough:
The V rgin a Real Estate Purchase Contract allows you and your sales associate to conduct a final walkthrough within seven days of settlement to ensure there are no major changes or new damage to the home since go ng under contract, any agreed-upon repairs are complete, and all included items are still on-site
Closing:
Once Settlement is complete, Title will disperse funds as required by contract and lender instructions T tle will then record the closing documents with the County Recorder.
Possession
Settlement (Signing Day):
Settlement occurs once both the buyer and seller have signed and del vered all required documents and all funds required to be paid by the buyer or seller have been delivered
Possession:
Most likely, you’ll be able to take possession of your new home upon receiving funds However, depending on the negotiations between buyer and seller, it’s possible for possession to occur a specific number of days or hours after record ng.
Closing is when you take ownership of your new property As th s day nears, your sales assoc ate and lender will monitor your transact on to ensure that no last-m nute issues arise that may need to be dealt w th before getting to the settlement table
• Recommend movers, interior designers, landscapers, general contractors, gardeners, cleaning services and home maintenance services, as needed
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Arrange for a final walkthrough of the property
Prov de resources for a Home Warranty Policy
Accompany you to the settlement signing Upon recording t tle, provide keys
Congratulations on your home purchase!
REVIEW OBJECTIVES & SEARCH CRITERIA
FINANCING APPROVED?
ANYTHING WORTHWHILE AVAILABLE?
SCHEDULE TOURS & VISIT OPEN HOUSES
ANYTHING WORTH PURSUING?
CONDUCT
READY TO MAKE AN OFFER?
CONGRATULATIONS!
COORDINATE INSPECTIONS
FREQUENTLY ASKED QUESTIONS
HOW AND WHERE DO I SEARCH FOR HOMES ONLINE?
Your sales associate will customize a property search for you that encompasses both new construction and resale opportunities. As a member of the local Multiple List ng Serv ce (MLS) your sales associate has access to the most accurate and complete information.
WHAT ARE MY FINANCING OPTIONS?
The first decision is whether you'll be purchas ng the home with cash or gett ng a loan. If you choose to get a loan, your sales associate can recommend a skilled lender who can explain all of the financing options available to you
HOW DO I GET A LOAN?
You can finance a home with a loan from a bank, a combination of savings and a loan, a credit union, a private mortgage company or various state government lenders. Lenders offer different interest rates and fees which will impact your monthly payments Talk with several lenders before you decide; keep in m nd, this decision will impact your finances for many years When you take out a home loan, you enter into a long-term relationsh p with your lender Accordingly, it s important to find a lender you can trust
IS A DOWN PAYMENT ALWAYS REQUIRED?
In most cases, a down payment is required. However, there are several factors involved when determin ng your down payment amount, ncluding the loan type and your financial s tuation As a general rule, the more money you can put down on your home, the lower your loan amount and interest rate w ll be Most lenders suggest paying at least 20% of your new home’s price or appraised value to avoid hav ng to pay private mortgage insurance. Some types of loans require 10-20% of the purchase pr ce. Many firstt me homebuyers turn to FHA loans wh ch require very little down. Loan types and options should be discussed thoroughly with a mortgage profess onal
WHAT IS THE DIFFERENCE BETWEEN PRE-QUALIFICATION AND PRE-APPROVAL?
Pre-qualification is an informal calculation to see how much house you can afford A mortgage professional will analyze your ncome, debt and cred t score to determine how much you may be able to afford.
Pre-approval is a thorough, verified analysis of your mortgage application
I ALREADY OWN A HOME, SHOULD I PURCHASE ANOTHER BEFORE SELLING MY CURRENT HOME?
There are pros and cons both when buy ng a home before selling your current home and when selling your current home before buying another. If you are able to purchase your new home without mak ng your offer contingent upon the sale of your old home, that may be your most beneficial option. If you do need to sell your home in order to purchase a new home, you can make the offer to purchase contingent upon the sale of your current home Th s is different for each buyer and their unique financial situat on and goals
HOW LONG DOES A HOME PURCHASE TAKE?
WHAT IF MY OFFER IS REJECTED?
The timeline for finding a property varies greatly because there are so many variables Once you f nd a home and have an accepted offer, it usually takes around 30 days to close They often are, so don t let that stop you Now you begin negotiations w th the help of your sales assoc ate. You will often go back and forth several times before a deal is agreed upon. Just remember don't get so caught up in negot ations that you lose sight of what you really want and can afford.
WHAT INSPECTIONS SHOULD I CONSIDER? WHAT ARE THE OPTIONS IF REPAIRS ARE NEEDED?
Your sales associate will advise you on repairs to cons der. This document contains a host of suggestions for what inspections may be most helpful for your particular purchase Your sales associate can refer you to a trusted home inspector to perform the necessary nspections
HOW DO WE KNOW THE SELLER WILL TELL US ABOUT PROBLEMS IN THE HOUSE, ARE THEY REQUIRED TO DISCLOSE ISSUES?
Virginia is a buyer beware state, which means sellers have to disclose what they know but its on the buyer to find out any problems. We recommend meet ng with your attorney to discuss any concerns
WHAT IS TITLE INSURANCE AND WHO PAYS FOR THAT?
When obtaining a mortgage on a home, two polic es are ordered; one that covers you as the homeowner and one that covers the lender In Virginia, stateapproved contracts stipulate the seller pays for the homeowner's policy and the buyer pays for the lender's pol cy T tle insurance is crucial as t provides coverage for defects or issues that were not discovered during the initial title search. This coverage protects the policyholder from financial loss and legal expenses related to these h dden problems.
WHAT ARE PROPERTY TAXES?
WHEN DOES MY EARNEST MONEY BECOME NON-REFUNDABLE?
Each offer strategy is different depending on the buyer, seller, market conditions and competit ve environment. You will have the option of adding in a variety of conditions to allow for the protect on of your earnest money while inspections, loan approval, review of disclosures, title search, etc are completed There will come a point when the Earnest Money is nonrefundable; your sales associate will review those dates with you when submitt ng your offer.
DO I NEED A HOME WARRANTY?
The decision to invest n a home warranty for your purchase is entirely up to you, the buyer A home warranty may provide coverage on appliances and specific items for a specific amount of time, typically at least a year. Many first-time homebuyers purchase a home warranty so they are covered immediately after making the r home purchase in the event of unexpected costly repairs or replacements Keep in mind that home warranties do not cover pre-existing cond tions
Property taxes are calculated as a percentage of a home’s worth These taxes typically pay for local schools, public transportation, roads and infrastructure The tax rates of your property vary depending on location and value and vary w dely from state to state.
HOW MUCH ARE CLOSING COSTS?
Closing costs can vary greatly with each home and Lender. This is an important piece to the financing consultation you should do with a trusted Lender.
WHAT SHOULD I EXPECT AT CLOSING?
When your settlement deadline arrives, you will have the opportunity to rev ew any loan documents and the final settlement statement and will be given instructions on how to submit the funds to purchase. You will also meet with your attorney and/or notary to sign the final documents including the deed that is recorded for your new home
WHEN DO I ACTUALLY GET THE KEYS TO MY NEW HOME?
Like most things in real estate, this can vary depending on the negotiation and s tuation of parties involved. Possession normally happens after the deed to the home has been recorded in the buyer's name. Exact timing for possession is negotiated as part of the offer and can be anywhere from time of recording to days or weeks. This is an important d scussion you'll want to discuss thoroughly with your sales associate when negot ating the offer
GLOSSARY OF TERMS
ACCEPTANCE
The formal term for coming to an agreement on an offer and establishing a contract between the buyer and the seller This is when documents are created and signed, and if e ther party backs out, there are consequences
A professional analysis of the property, including examples of sales of similar properties n order to determ ne an estimate of the value of the property.
APPRAISAL CONTINGENCY
A clause in the contract that will negate it f the appraisal comes back and the house is worth less than the sale price.
Legally, this means the seller is not providing warrant es regarding the physical condition of the property Also can mean the owner will not be making any improvements or changes to the house before the sale
BACKUP OFFER
An offer negotiated on a home that already has an agreement in place to put you next in line if that deal falls through You will still need to commit money to this offer to hold your place
BUYER S AGENT
A l censed real estate professional or broker that operates on behalf of their client to help them f nd and purchase a property
CLOSING
The process of final zing a real estate transaction Th s includes complet ng Settlement (finalizing mortgage agreements, paying applicable transaction fees and sign ng on the dotted l ne to close the deal) and the funding and recording of the warranty deed.
CLOSING COSTS
Fees associated with f naliz ng a real estate transaction beyond the actual price of the home. Both the buyer and seller will have expenses during the closing process Closing costs normally nclude an applicat on fee, nspect on fees, homeowner’s nsurance, property taxes and sales associate commissions
CLOSING DISCLOSURE (CD)
This document explains information about your mortgage including interest, monthly payments and clos ng costs Received at least three days before clos ng, it should match the loan estimate you received when you appl ed
CLOSING (SETTLEMENT) STATEMENT
This is a list of all the costs involved in the closing for both the buyer and the seller. It used to be called the HUD-1 Statement but is now the Closing Disclosure Form.
COMPARABLES (COMPS)
A term that refers to the prices of recently sold properties that are used to determine the market value of other similar properties. Appraisers use this to come up with the fair market value of the home you are interested in
COMPARATIVE MARKET ANALYSIS (CMA)
A process used to determine the value of a home based on the sale pr ces of similar properties in the area
CONTINGENCY
A clause in a contract that must be met in order for a real estate contract to be finalized If the condition is not met, the contract is renegotiated or canceled.
COVENANTS, CONDITIONS & RESTRICTIONS (CC&R'S)
Rules and regulat ons established by a homeowner’s association (HOA) or neighborhood association that outline what you can do with and on your property, along with any monthly fees requ red to maintain common areas and keep the association running.
DDAYS ON MARKET (DOM)
The duration of t me a property has been or was available to the public
DEBT-TO-INCOME RATIO (DTI)
A compar son of your monthly gross income to your monthly payments or debts owed. This percentage helps lenders measure your ability to pay your debts and calculate their risk lending to you as a borrower.
DOWN PAYMENT
The amount paid upfront as part of a real estate transact on It is usually expressed as a small percentage of the overall price of a property Most mortgage lenders will requ re a down payment as collateral
DUE DILIGENCE
A period of time written into the purchase agreement, when the buyer can inspect the property and review important information before closing on the sale.
EARNEST MONEY
A cash deposit put down by the buyer during an offer to indicate they are serious about purchasing the property Sometimes called a good faith deposit, if accepted the earnest money will go towards the down payment
FINANCING CONTINGENCY
A clause in your offer contract where you can back out if you can’t secure a mortgage with the specified terms in a certa n amount of t me.
FSBO (FOR SALE BY OWNER)
The property owner s not using a real estate agent to sell their home, usually in an attempt to save money With the complexity of state and federal rules that need to be taken into account when buy ng or selling a home, extra caution should be taken when placing an offer on a home that’s for sale by owner
HHOMEOWNER ASSOCIATION (HOA)
A private assoc ation that takes care of the property around a condominium complex or planned housing development. It issues rules and collects dues.
INSPECTION
An examination of the overall condition of a property by a professional. It s ordered by the buyer and typically covers plumbing, foundation, roof, electrical, HVAC and more. The inspector will then provide an official certificate verifying the inspection s completion and the condition of the home.
The profit a mortgage lender makes in exchange for the loan, quantified as a percentage of the total loan amount
LENDER
A financial institution or organization that lends funds to buy, build or renovate a property with the expectation that the funds will be repa d usually with nterest within a predetermined time period
An arrangement between the buyer and seller that allows the seller to remain in the home after closing Also known as a rent-back, the seller typically pays rent and a deposit for a limited time period
LIEN
A claim on a property that must be paid before it can be sold These may be placed by a lender if the home is used as collateral for another loan, or by the county for fail ng to pay taxes
LIMITED AGENCY
A situation where an agent represents both the buyer and seller.
LISTING LISTING AGENT
The description available for a property that is up for sale, and an agreement that allows the home to be shown and marketed
The agent or broker who operates on behalf of the property owners to help them sell the r property
LISTING AGREEMENT
A legally b nding contract that allows a real estate agent to sell a property on behalf of their client, the property owner.
MMARKET VALUE
The value of a property based on its appraisal value and sim lar properties n the area
MULTIPLE LISTING SERVICE (MLS)
The database of current real estate listings that provides accurate, up-to-date information about the status of local list ngs. Real estate professionals use this to see l stings in the area you're looking for and will typically add a listing to this database when a house goes up for sale
OOFFER
A proposed contract outlining the price you are will ng to pay plus any additional condit ons you are willing to promise in exchange for a home. Your sales associate will write and submit it to the seller or seller s agent. If they accept your offer, it becomes the purchase contract.
OPEN HOUSE
A scheduled in-person event that allows prospective buyers to vis t a property without an appointment to generate nterest and showcase the property in a casual setting
PRE-APPROVAL
A letter from a mortgage company that states what you can afford and what they are willing to lend you This is a vital piece in the process of making an offer on a house, indicating to the seller your offer is valid and allowing the purchase process to proceed more quickly
PRELIMINARY REPORT
Completed by the title company, this report researches the t tle on the house to make sure it’s clear of any potential problems. Typically the seller pays for this report, but that’s negotiable. It’s a requirement for title insurance
PRE-QUALIFICATION
An informal calculation completed by your sales associate to determine how much you can afford in a house by comparing your income to your debts This helps your agent look for homes in your price range
PRINCIPAL
The total amount borrowed in a mortgage loan that you must pay pack Th s amount does not include the interest you owe and paying it down early can save you money that you would otherwise have paid in interest.
PRIVATE MORTGAGE INSURANCE (PMI)
An insurance pol cy that may be required by a mortgage company to protect them n case the borrower goes into default Typically this additional fee is required if you put less than 20% down on a home, but should be removed once your equity reaches a certain amount This can be achieved by either by paying down your loan or appreciation in your home's value, verified by an appraisal
PROOF OF FUNDS
Verified documentation that proves to a seller that you have enough money for the down payment and clos ng costs
PROPERTY TAX
Taxes owed to the county or state for owning property Th s can often be rolled into your monthly escrow payment
RA l censed real estate agent and member of the National Association of REALTORS® As a member they agree to abide by a strict Code of Eth cs and other standards of conduct laid out by the NAR.
Things a seller might offer to a buyer to sweeten the deal, such as covering some of the closing costs
SELLER DISCLOSURE
A document from the homeowner informing potential buyers in detail about a property's condit on and how t m ght negat vely impact the value of the home, including issues w th the home itself, major construction, noise, pests, property line disputes, etc
SETTLEMENT
Another term for closing, settlement is a meeting that includes documents, signatures, checks and everything needed to officially buy or sell a home
SUBJECT TO INSPECTION
This means the seller won’t show you the property without getting an offer first If you are nervous about making an offer “sight unseen,” you should be. On the plus side, this requirement often el minates a lot of competit on for the home.
T UTITLE
A record of who owns the property, recorded in the county land records office when you receive the deed on a house.
TITLE INSURANCE
Owners: Protects the buyer against unknown cla ms, debts or liens against the property and ts title. The seller is typically required to pay for this per the terms of the purchase contract.
Lenders: Protects the mortgage company aga nst any unknown debts or liens aga nst a property and its title. The buyer is typically required to pay for th s.
TITLE SEARCH
The process of searching through public records to ensure that the seller of a property has lawful ownersh p of it. A title search can uncover poss ble deficiencies or defects n ownership that could greatly impact a real estate transaction.
UNDERWRITING
An analysis of risk n ssuing a mortgage for a property, done by a mortgage lender
UPFRONT COSTS
The costs a buyer must pay before closing. These may nclude appraisal fees, origination/service charges, taxes and government fees, hazard insurance, and prepaid and escrow payments.
A collection of local laws that dictate what you can build in certain areas This can come into play if you want to change the purpose of the house you own or are buying For example, if you want to start a home-based business or add a rental unit, you will need to check the zoning laws for your area
BUYING A HOME.
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