Home Buyers Guide

BUYERS BOOK Brought To You By

Tommy Mutchler

Your Dream Home Awaits...

Let's Find A Home You LOVE.

Table OF CONTENT 1: About Me 2: We Can Help 3: Client Success Stories 4-5: Don't Hire A Realtor, Hire A Negotiate 6: The State Of The Market 7: Mortgage Rates Rising 8:Buying Is Still Cheaper Than Renting 9: 4 Reasons To Buy This Year 10: The Home Buying Process 11-12: Mortgage Pre-Approval 13: Loan Application Checklist 14: Know The Numbers 15: Home Buying Cost Considerations 16: Shopping For Your Home 17: For Sale By Owner, Short Sales, Fixer Upper, Preforeclosure 18: When Viewing Homes 19-23: House Hunting Checklist 24: Making An Offer 25: Realtors Code Of Ethics 26-29: The Law Of Real Estate Agency 30-34: Purchase & Sale Agreement (SAMPLE) 35-36: Financing Addendum (SAMPLE) 37-38: Optional Clause Addendum (SAMPLE) 39-40: Inspection Addemdum (SAMPLE) 41: Home Inspection 42: Close The Deal 43-45: A Home Buyers Glossary 46: My Commitment To You 47: Contact Me

About ME "I'm Tommy Mutchler and I'm a Realtor. My Job is to give people the best help with any of their real estate needs. Just ask me a question, I'd love to help"

Born and raised in the Northwest I am the oldest of 7 kids, was homeschooled, and have some of the best parents anyone could ever hope for. Our family values are love people, help people, and always be the hardest worker in the room. These values don't only apply to my personal life but my business life as well.

About

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WE CAN HELP Here are our 5-star reviews from our happy customers who we've had the privilege of serving.

Premier Buyers Agent

Don't TAKE MY Word Take MY CLIENTSÂ Word

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I highly recommend Tommy. He was very professional, knowledgeable, a good listener, and did a great job getting us into our new home. He was very easy to contact whenever I had questions. He also checked in with me a few times after I moved in to make sure I was happy with my place and to see if I needed anything. Thank you, Tommy!

-Justin & Brianne

Tommy was the best! He was very patient and diligent about finding the right property to fit my needs. He was super responsive and made me feel like I was a priority always. Not only was Tommy great, every single person he recommended (lender, contractor, etc) were all super nice, helpful and did great work. I would highly recommend Tommy.

-Jason

Buying a house is no cake-walk these days and Tommy made the process smooth, quick, and efficient despite multiple hurdles along the way. He was very quick to respond via email and phone and worked extremely quickly to get things done under deadlines and pressure. One thing I especially appreciated was how well he kept us in the loop at each stage of the process, never leaving us wondering when something was going to be handled. Definitely recommend!

-Casey & Jackie I strongly recommend Tommy Mutchler to anyone who needs a real estate agent. We have used him both when we were selling and when we were buying. He was very helpful in both roles. He knows what he is doing, and he was always available when we needed him. The most important thing, for me, is that I trusted him. He would listen to us and try to understand what our goals were, and he would do his best to help us meet our goals. I always had the feeling that he was working for us, not just for himself. Thank you Tommy!

-Dustin & Kim

Don't Hire A REALTOR, HIRE A Negotiator! 4 WHY HIRE AN EXPERT NEGOTIATOR? Realtors provide three basic services to all buyers.

They show homes, Have access to basic market knowledge and housing information, Coordinate the entire transaction on your behalf.

These are of course all great and necessary services for most home buyers, but these are basic services that don’t really separate realtors from one another. Meaning, there is no benefit in hiring one realtor over another.

However, if you hire a realtor who is also an expert negotiator they can usually help you: Getting your offer accepted Getting Better Deals Help win the bidding wars Put more money in your pocket Keep the deal from falling apart when problems arise Make everyone happy

SAVE MORE

$$$

WHAT MAKES ME AN EXPERT NEGOTIATOR? EDUCATION, PRACTICE, AND EXPERIEN CE. include: My current Certifications Certified Negotiation Expert Negotiating Across Generations in Real Estate Advanced Negotiation Techniques for Buyer's Agents Advanced Negotiation Techniques for Listing Agents Cultural Factors in Real Estate Negotiations Mastering Email Negotiations in Real Estate

IT IS MY PROMISE TO YOU MAKE SURE YOU NOT ONLY GET A NEW HOME, BUT TO GET YOU THE BEST POSSIBLE DEAL -TOMMY MUTCHLER

Don't Hire A REALTOR, HIRE A Negotiator! 5

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The STATE OF THE Market

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The map below was created to show the 5-year appreciation from December 2012 – December 2017 by state. Nationally, the cumulative appreciation over the five-year period was 37.4%, with a high of 66% in Nevada, and a modest increase of 5% in Connecticut.

Where are prices headed in the next 5 years?

Data from the most recent HPES shows that home prices are expected to increase by 18.2% over the next 5 years. The bulls of the group predict home prices to rise by 27.4%, while the more cautious bears predict an appreciation of 8.3%.

Bottom Line Every day, thousands of homeowners regain positive equity in their homes.

Some homeowners are now experiencing values even higher than before the Great Recession. If you’re wondering if you have enough equity to sell your house and move on to your dream home, let’s get together to discuss conditions in our neighborhood!

Mortgage RATES Rising Interest rates hovered around 4% for the majority of 2017, which gave many buyers relief from rising home prices and helped with a ordability. Experts predict that rates will increase by the end of 2018 and will be a full percentage point higher, at 4.9%, by the end of 2019.

Let’s take a look at a historical view of interest rates over the last 45 years.

The chart to the right shows the impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month.

With each quarter of a percent increase in interest rate, the value of the home you can a ord decreases by 2.5% (in this example, $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Act now to get the most house for your hard-earned money.

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Buying Still CHEAPER THAN Renting

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In the latest Rent vs. Buy Report from Trulia, they explained that homeownership remains cheaper than renting with a traditional 30-year xed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers show that the range is an average of 6.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Detroit (MI), and 37.4% nationwide!

A study by GoBankingRates looked at the cost of renting vs. owning a home at the state level and concluded that in 39 states, it is actually 'a little' or 'a lot' cheaper to own (represented by the two shades of blue in the map below).

One of the main reasons owning a home has remained signi cantly cheaper than renting is the fact that interest rates have remained at or near historic lows. Freddie Mac reports that interest rates for a 30-year xed rate mortgage have hovered around 4%.

Nationally, rates would have to reach 9.1%, a 122% increase over today’s average of 4.1%, for renting to be cheaper than buying. Rates haven’t been that high since January of 1995, according to Freddie Mac.

Bottom Line Buying a home makes sense nancially. If you are one of the many renters who would like to evaluate your ability to buy this year, let’s get together and nd you your dream home.

4 Reasons TO BUY This Year

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1. Prices Will Continue to Rise: CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.3% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase: Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage hovered close to 4.0% in 2017. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting that rates will increase by nearly a full percentage point by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home. 3 3. Either Way, You Are Paying a Mortgage: There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage.

Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage - either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move on with Your Life: The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

The Home Buying Process

The Home Buying Process The home buying process is one of the most exciting and stressful experiences you’ll ever go through. This holds true whether you're a veteran home owner or a first time home buyer.

Whether you’re in the market for a new primary residence, an investment property, or that perfect vacation getaway.

Today’s real estate market can offer more opportunities, yet can be filled with more risks than ever before. There are a multitude of factors to consider and decisions to make. When buying, it’s crucial to have all the available resources necessary to make a wellinformed decision, together with the time required to make use of them. It’s important to enlist the help of a trusted real estate professional who’ll be able to provide expert guidance at each step of the buying process.

Finding and purchasing a home includes the following steps, which we’ll examine in more detail throughout this booklet:

Mortgage PRE-APPROVAL

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We require that you get pre-approved for a loan before we start viewing homes. The pre-approval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. On the basis of this examination, the lender will provide you with a document detailing the amount you can borrow to buy a home.

THE BENEFITS OF A PRE-APPROVAL INCLUDE: You’ll know what you are eligible to receive and be able to plan accordingly.

As a qualified, motivated buyer you’ll be taken more seriously when you make an offer.

Lenders can tell you if you qualify for special programs that will help you afford a better home (particularly if you’re a first-time buyer.

We HIGHLY Recommend 360-746-8328 jblock@guildmortgage.com 310 E. Magnolia St., Suite 101 Bellingham, WA 98225 NMLS ID #956551 I am licensed to do business in the state of Washington.

JOHN BLOCK LOAN OFFICER

"As a Guild Mortgage Loan Officer, I am committed to helping my clients understand their options for real estate financing and assisting them to make solid home loan decisions that meet their needs. My 'Find a Loan' section of this website can be used to find information and resources on our home loan options. I look forward to serving your home financing needs for many years. My goal is to be your 'lender for life'."

"BJ's friendliness, and professionalism are next to none.

His efficiency is always impressive, and his ability to explain the more nuanced parts of the home mortgage process in plain detail are greatly appreciated. I will definitely work with him again in the future!"

"BJ was absolutely top notch. I told the WECU loan officer who referred me to the first mortgage company that they should never send their members to that group again. I gave them BJs contact information and insisted they send all VA loans to him. "

- Clayton Swansen, Customer

- Garth and Kelsey Baldwin

Mortgage PRE-APPROVAL We HIGHLY Recommend

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Hello, my name is Randy Dorn, and I have 8 years of experience as a residential Loan Consultant to offer you, your friends, relatives, and business partners. Recognizing that each customer has specific needs, I will utilize my expertise along with Caliber's superior "in-house-local" processing, underwriting, and closing functions to meet those needs; assuring a smooth process from application to closing.

RANDY DORN LOAN CONSULTANT

360.398.5836 Randy.Dorn@caliberhomeloans.com 2200 Rimland Dr., Suite 110 Bellingham, WA 98226 NMLS ID #261344 I am licensed to do business in the state of Washington.

I believe in helping my customers achieve debt free homeownership in an efficient manner with clear communication throughout the entire process. Every loan is important and deserves to close on time. My commitment to you is honesty, reliability, and accountability.

360-319-7119 jack.decook@churchillmortgage.com 2219 Rimland Dr. Ste 301 Bellingham, WA 98266 NMLS ID #1690727 I am licensed to do business in the state of Washington.

JACK DECOOK LOAN OFFICER

We've personally vetted and worked with dozens of loan officers and Mortgage companies and believe the these gentlemen and the Mortgage Companies they represent will give you the best possible service at the best possible rate.

Loan APPLICATION Checklist Schedule of real estate owned, including type of property, type of loan, monthly principal and interest, taxes and insurance amounts and rental agreements.

If you were a full-time student at any time in the past 2 years, please be prepared to verify by diploma or transcripts.

If you rent, supply landlord’s name and address (cover a 2 year period).

Year-to-date pay stub and W-2 forms for the past 2 years.

Self-employed and commissioned borrowers: Signed copies of federal tax returns (all schedules) for the past 2 years and a year-to-date profit and loss statement and balance sheet.

Account numbers for each bank account where deposits are held, plus the name, address, and zip code for each depository, and two months bank statements for each account.

The name(s) and addresses of present and any previous employers to verify a full 2 years.

Know THE Numbers

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When you buy a home, it’s all about the numbers and the choices they afford you. Your credit scores, income to mortgage debt, income-to-debt, and down payment can all affect your mortgage interest rate, or how much it will cost you to borrow money to buy a home.

Know Your Credit Scores: Your credit score can be between 300 and 850. Compiled by credit bureaus and FICO, an analytics corporation, credit scores are a snapshot into your credit-worthiness. Lenders are in a low-risk mood and are requiring high credit scores from borrowers. To qualify for the best mortgage interest rates – the benchmark 30-year fixed rate - your credit scores must be approximately 720 or more. To find out what your credit scores are, visit annualcreditreport.com, where you can get free copies of your credit report and scores.

Know Your Income to Debt Ratios: To qualify for a 30-year fixed rate conforming loan that is insured by the Federal Housing Administration (FHA), your income to mortgage debt ratio can be no higher than 29% of your gross annual income. For example, if you make $5000 gross income per month, your house payment (principal, interest, hazard insurance and property taxes) should be no larger than $1,450.00. If you’re carrying credit card debt, student loans, or pay child support, the monthly debt service must be accounted for. To get the income to total debt ratio, multiply your monthly income by 41%. For example, if you gross $5000 per month, your total debt (including your house payment) can be no larger than $2050. That means to qualify for a $1450.00 house payment, your debt service can be no higher than $600 per month.

Know Your Down Payment: Know Your Down Payment: For most loans, your credit scores affects down payment requirements.

If you have a high credit score, you can get an FHA-guaranteed loan with only 3.5% down, but if your scores are low, you may be required to put as much as 10% down. Conventional loans are sold by banks as securities to Fannie Mae and Freddie Mac, and require a 20% down. You can obtain FHA or conventional loans with less money down, but expect to pay a mortgage insurance premium, which reduces the risk for the lender.

Where your down payment originates also makes a difference to lenders. If you have saved the money yourself, or it comes from a recent real estate transaction, lenders tend to be more relaxed than if your parents are giving you the money as a gift. Your credit scores, income to debt ratio, and down payments dovetail together in a way that makes sense to your lender. By determining these numbers, you can comfortably afford the home you want to buy.

Home BUYING COST Considerations

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You've worked with your Lender and have your mortgage pre-approval and figure out your down payment and loan fees. But that's not all you'll need to close on your new home. Other services you'll need to budget for your new home include:

D E V A W

REALTOR Retainer Fee

$500 (refunded at closing)

Earnest Money

Approximately 1% of Purchase Price

Home Inspection

$300 - $500

Closing Costs

Approximately 2-5% of The Purchase Price

"Problem" Fee

$200

How Much DOES YOUR REALTOR Cost?

In retail sales, commission is earned on the price of the item(s) sold. The same is true in real estate sales. The agent who owns the listing receives a commission based off a percentage of the home's final selling price. But what about the buyer's agent? How does he/she get paid?

Here's the good news. As a buyer you don't have to worry about paying your agent's commission out of your own pocket. A buyer's agent's commission is paid out of the commission awarded to the listing agent at close of escrow.

Let's talk briefly about how commission structures work in the sale and purchase of a home. In order to work as a listing agent or a buyer's agent, agents are required to hang their real estate license with a licensed real estate broker. Which means they pay a portion of their commission at the close of every escrow to their broker.

While that seems like a low-risk opportunity and an incentive to start home shopping with an agent right away, please hire your agent once you're ready, willing, and able to start taking the home buying process seriously. Your agent who works really hard for you is working for free until you buy your dream home.

Shopping FOR YOUR Home

GET THE HOMESPOTTER APP! THE BEST HOME SEARCHING APP IN THE NORTHWEST!

As we discussed earlier, there are three main services that I provide to all my serious buyers, the first of which is finding you a home.

Of course, there are many great websites and apps you can use to find a home on. But one of the benefits that I bring to the table is I have access to many more homes, especially off market listings. Also, I personally go out and previous ALL new listings on a daily basis. Meaning, when you tell me what you're looking for, I'll be more likely to spot those hidden gems.

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Text "App" to 360 972 3227 To Download The HomeSpotter app!

-For IOS and Android

 A Note About Those Other Websites...

There have been studies done on accuracy of major sites like Trulia, Zillow, etc. and these studies have found that approximately 36% of the listings shown as active were no longer for sale in the local MLS, compared with almost 0% on local brokerage websites. It's also been reported that only 81% of current homes for sale can be seen on these sites. Meaning you're not seeing 1/5th of homes that are for sale. On top of that, it can take up to 9 days A Note before About Zillow Those will Other show Websites... you new listings. So You're not only getting bad information, you're missing out on the latest and greatest.

WHY MYPNWHOME.CO IS THE BEST PLACE TO FIND A HOME "With a direct feed to the NWMLS, you'll see homes DAYS before there on other national sites."

Speical CONSIDERATIONS

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FOR SALE BY OWNER If you nd a For Sale By Owner home you‘re interested in, let me know! Many FSBO sellers are willing to work with and pay a buyers’ agent commission, which allows you to proceed with your home purchase under the care and guidance of a licensed professional.

The down side to FSBO sales is that sellers are working without the same professional representation; they often overprice their home (which could lead to appraisal problems), may be unwilling to pay a selling agent‘s commission, forcing you to pay for your agent or hire an attorney, and they may not fully understand real estate practices and law which can lead to a complicated sale.

SHORT SALE

Let's just say that they don't call them short sales because the time to close is short. In fact, most short sales take 612 months to nally close.

Here are just some of the reasons you may not want to buy a short sale:

Stringent quali cations Home will be sold "As Is" Length of time to close Little seller motivation Higher buyer closing costs Lenders can change conditions Lots of surprises (and not the good kind)

FIXER-UPPER With some DIY savvy or the time and money to invest in hired professionals, a " xer upper" can be a great investment! On the ip side, there are de nitely xers to look out for, including those with plumbing, structural, or electrical problems. Many fixers have issues that a lender is not willing to loan on, meaning they can only be purchased with cash.

PRE-FORECLOSURE The most tempting of all of the “too good to be true" homes for sale, foreclosures are not for the inexperienced or faint of heart. Many foreclosed homeowners cause destruction to their property prior to leaving. Appliances and xtures may be removed, walls damaged, carpet destroyed, and systems left non-functioning. Really bad cases have been vacated after concrete was poured in toilets and ooding of bathrooms were left to

destroy the oors and ceilings. Of course, not all foreclosures are reality TV nightmares, but they are sold completely "As Is" and sellers often never even get the chance to look inside before heading to the auction. Because these homes are sold at auction, you'll need to know the value of the home up front so as not to overbid, and you'll need to have cash in hand the day of the sale.

When LOOKING ATHomes

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BY NOW WE'VE FOUND AND CREATED A LIST OF 3 TO 5 HOMES TO VIEW HOME VIEWING CHECKLIST This Guide A Pen Tape Mesure Beverage of Choice Snack Camera or Smart Phone for Extra Photos Slip on Shoes Your Realtor

PLEASE NOTE: Do not be surprised if you fall in love with the very first home. It is very common to make an offer on the first home you see.

USE THESE GUIDES TO TAKE NOTES TO EVALUATE YOUR FAVORITE HOME

House HUNTING Checklist

THE FEATURES

THE HOME

DOES THIS HOUSE MAKE THE SHORT LIST: ADDITIONAL NOTES:

NOTES ABOUT THE NEIGHBORHOOD

OVERALL RATING

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House HUNTING Checklist

THE FEATURES

THE HOME

DOES THIS HOUSE MAKE THE SHORT LIST: ADDITIONAL NOTES:

NOTES ABOUT THE NEIGHBORHOOD

OVERALL RATING

House HUNTING Checklist

1 THE FEATURES

THE HOME

DOES THIS HOUSE MAKE THE SHORT LIST: ADDITIONAL NOTES:

NOTES ABOUT THE NEIGHBORHOOD

OVERALL RATING

House HUNTING Checklist

1 THE FEATURES

THE HOME

DOES THIS HOUSE MAKE THE SHORT LIST: ADDITIONAL NOTES:

NOTES ABOUT THE NEIGHBORHOOD

OVERALL RATING

House HUNTING Checklist

1 THE FEATURES

THE HOME

DOES THIS HOUSE MAKE THE SHORT LIST: ADDITIONAL NOTES:

NOTES ABOUT THE NEIGHBORHOOD

OVERALL RATING

Crafting The PERFECTÂ Offer

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Congratulations! You've found a home you love, now it's time to make the perfect offer.

Now making an offer isn't as simple as calling up the sellers and offering them X amount of dollars. Each home is unique and every seller has different wants. This is important because it dictates how we'll structure our offer.

Remember, There are legal contracts, contingence, disclosers, timelines, inspections, appraisals, title review, and so much more that we need to include when making and negotiating our offer.

This isn't something to be feared, just to be aware of. This is what I live for!

Leave it to me to handle all the complicated stuff. When the time right, i'll ask you a few simple questions based on your needs so I can craft the perfect offer for you and the sellers.

Realtors CODE OFEthics

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Mortgage

PRE-APPROVAL

It's no secret that the market is moving fast. Which means you really need to be on your toes and ready to move once we find a home you like.

SA M PL E

SA M PL E

Home BUYING Home Considerations COST INSPECTION

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Due diligence: it’s a fancy way of saying that a home buyer should not depend on the word of the seller (even though, the seller has a legal obligation to reveal all known defects in the home) but has an obligation to thoroughly investigate the property. The due diligence period typically runs from the time the purchase contract is signed until a date mutually agreed upon by the buyer and the seller. Which is usually 10 days. During this time, we will perform a home inspection.

A typical inspection starts at the roof and ends at the foundation, with stops in between at every major house system (plumbing, electrical, heating, septic, etc.). Most also include tests for radon gas and water safety. A good inspection, by a professional inspector to the standards set by the American Society of Home Inspectors, costs about $500 and takes 2 to 3 hours, depending on the size and age of the house. Oh, and don’t skip inspections on new construction. Just because something’s new doesn’t mean it’s flawless.

We HIGHLY Recommend

MICHAEL HINDERMAN HOME INSPECTOR Michael has been such a great contractor!

He's super efficient, smart, and tidy. Leaves it cleaner than when he started. I've been really pleased with all the work at my housebathroom remodel, new deck, and kitchen remodel. Awesome quality work and cheaper than the other bids.

-Melissa Harmon

I'm a realtor and have worked with Michael for a long time. He is my go to inspector because in my opinion, he is the very best the northwest has to offer!

-Thomas Mutchler

Home BUYING Close Considerations THE COSTDeal W'e've found you your dream home, negotiated an awesome deal, and have done our due diligence. Now what? The next few steps to the closing, also referred to as the “escrow” or “settlement”, include: Getting a title search – you will need a historical review of all legal documents relating to ownership of the property – to ensure that there are no claims against the title of the property.

It’s also necessary to purchase Title Insurance for protection in the event of errors in the records or mistakes in the review process.

The final walkthrough – you will be given the chance to look at the home one last time to make sure it’s in the same condition as when you signed the sale agreement.

The settlement – typically, a few days before the Closing Date you’ll meet with a lawyer, real estate professional, or escrow agent to verify and sign all the paperwork required to complete the transaction. The settlement will include paying your closing costs, legal fees, property adjustments and transfer taxes. At that point, you’ll receive the property title and copies of all documentation pertaining to the purchase.

Oh, and one more thing – you’ll get the keys!

Home A Home Glossary BUYING BUYERS COST Considerations 43 "Did he just say?" is something that may cross your mind. Don't worry though! I've made you a list of terms that we use in the real estate business. Please free to ask me any questions or clarifications. I'm happy to help!

Abstract of Title – 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 Treasury 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.

Closing – the final steps in the transfer of property ownership. On or before 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. These 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.

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.

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.

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

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

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

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

Home A Home Glossary BUYING BUYERS COST Considerations 44 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.

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).

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

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.

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..

Pre-Approval Letter – a letter from a mortgage lender indicating that a buyer is approved 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 amount of the loan that has not yet been repaid. Does not include the interest paid to borrow.

Home A Home Glossary BUYING BUYERS COST Considerations 45 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 Insurance – insurance policy that guarantees the accuracy of the title search and protects lenders and homeowners against legal problems with the title.

Truth-In-Lending Act (TILA) – federal law that requires disclosure of a truth-inlending 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.

Home My BUYING To You COMMITMENT COST Considerations

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I know you have a lot of options out there and I greatly appreciate you choosing me. Below is a list of some of the services that we provide during the home search and Home Buying process.

- Custom Automated Home Search based on your criteria.

- Cross check the MLS system daily to make sure you are seeing every home that meets your criteria.

- Schedule and show you all properties that meet your criteria that you would like to see.

- Provide you with reputable Loan Officers to get you prequalified for a loan if needed.

- Draft all offers that you would like to submit, go over all offer paperwork with you and answer any questions you may have.

- Negotiate offers to ensure you are getting the best possible deal and the best possible terms.

- Follow up with the Listing Realtor for offer status updates and constantly update you on the status of your offer.

- Once your offer is accepted, I will coordinate with the title company to open escrow and deliver the contract and earnest money.

- Schedule all inspections based on your schedule and the contract timelines - Make sure all contract timelines are met.

- Follow up with the Title Company and the Lender several times weekly to make sure closing is on schedule and keep you updated throughout the process.

- Schedule and perform the Final Walk Through with you.

- Coordinate with you, Title and the Lender on getting the closing documents signed.

- Contact you immediately upon closing/recordation and deliver you the keys to your new home.

I will guide you every step of the way to ensure you are informed and educated on the home buying process. My fee to you is 100% free. In the state of WA the Seller pays the Realtor commissions, so my services are 100% free to you. All I ask for is your commitment and that when you do find the home you want to purchase that you use me as your Realtor.

BUYING Thank COST You Home Considerations Thank you for the opportunity to work with you. I look forward in helping you purchase your new home! Please feel free to call, text, or email me anytime with any questions or concerns you might have.

Sincerely,

"The Best Place To Find A Home..."

.CO