SELLING GUIDE
Thank you for choosing Perspective Real Estate Group to help you purchase your new home. With over 20 years of experience and the successful closing of hundreds of transactions, your success is our goal. Real estate transactions are complex with many phases between the actual listing of your home through the closing. When choosing a Realtor to help you, it is important to do your homework and make sure that you choose the right Realtor for you. There is more to selling a home than just putting a sign in the front yard. Perspective Real Estate Group is committed to serving you with the highest level of care and concern throughout all phases of your sale. Our expertise in marketing a home, staging and preparing a home for sale, negotiating the contract, and managing all parties involved will surely be of great value to you.
THE PHASES OF A TRANSACTION: LISTING TO CLOSE
Intial Meeting
Home List and Inspection & Buyer Loan Buyer Escrow/ Market Negotiate Open Loan Appraisal, Title Closing Offer Escrow Processing Property Approval Review and Commitment
We hope that the information included in this packet will help you understand the process and what Perspective Real Estate Group has to offer. The real estate market is cyclical and we can help you navigate through any market and sell your house for the most money possible. Perspective Real Estate Group is committed to “Focusing on You� today, tomorrow and for many years to come. We will never take you or your referrals for granted and will treat your transaction as we would treat our own.
Sincerely, Cari Gililland
Linda Olchawa
Michelle Regier
Shelby Regier
Abbey Herr
www.ArizonaPerspective.com
THE THETEAM TEAMMAKES MAKES THE DIFFERENCE THE DIFFERENCE • The Perspective Real Estate Group believes there is only one level of service…that’s Full Service. • We have a whole team of professionals working for you with over 20 years of experience. • Each member of our team brings unique qualities and skills that will serve as a benefit to you. • Your success is our number one goal.
CARI GILILLAND
LINDA OLCHAWA
Associate Broker, ABR, ASP, CSN Founding Member of Perspective Real Estate Group
Associate Broker, SFR, CDPE, PSC Founding Member of Perspective Real Estate Group
CariSellsHomes@Gmail.com Direct 480.390.9247
Linda@480NewDigs.com Direct 602.743.7906
Cari was born in Reno Nevada, but grew up in Mesa, Arizona. She and her husband moved to Colorado in 1992 where they stayed for 8 years before heading back “home” to the east valley. Cari and her husband Rob have 3 daughters, Jordan, Morgan and Logan. Cari worked in the beauty industry for 13 years before jumping into real estate with both feet. While she owned a salon and ran a successful business herself, she always knew that real estate was her calling. She earned her real estate license in 2002 and has been serving clients full time ever since. Cari specializes in helping Sellers earn top dollar for their properties. She is a certified home stager, Accredited Buyers Representative (ABR), Certified Short Sale Negotiator (CSN) and earned her Broker license in 2010. While in the midst of one of the most challenging real estate markets in history, Cari has continued to be a top producer and successfully help her clients through some of the most challenging, exciting and rewarding times of their lives.
Born in New York and raised in the suburbs of Chicago, Linda made her way to Arizona to attend Arizona State University where she studied Social Work. She quickly fell in love with the wonderful weather, culture and people that make up the East Valley. Over 15 years later she could not imagine going back to the cold. She is married to fellow REALTOR Robert. Together they have 3 young children Tyler, Tori and Trey. After buying and renovating her first home she found her passion in real estate. After a few successful “flips” she became a licensee in 2006 to put her passion to work for others. Now Linda holds several designations including Pre-foreclosure Specialist Certification (PSC) , Certified Distressed Property Expert (CDPE) and Short Sale Foreclosure Recourse Certificate (SFR) to help serve her clients in this extraordinary market.
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MICHELLE REGIER
SHELBY REGIER
Realtor CNE, CSSPE
Realtor
Michelle@ArizonaPerspective.com Direct 480.695.8380
Shelby@ArizonaPerspective.com Direct 602.881.4328
Michelle has been working as a licensed Realtor since 2004. She is a Certified Negotiation Expert (CNE), Certified Short Sale Property Expert (CSSPE). She represents both Buyers and Sellers in purchasing and selling homes but specializes in buyer relocation, 2nd homes, and investor properties. Michelle also brings added value to her sellers by offering staging expertise and a full warehouse of items to help. She can create the perfect model home environment. Michelle holds a Bachelor of Arts degree. She is married to her husband, Alan who is a Scout for the Chicago White Sox. They have 2 children; Shelby, a graduate of ASU and fellow Perspective Real Estate Group member, and Zachary, who is a college student. She is involved in outreach ministry and fund-raising for local charities.
Shelby is a 2 year licensed Realtor since 2006 specializing in Buyers. Prior to earning her real estate license she worked for a large real estate team providing assistance with listing homes, marketing, and handling escrow transactions Shelby holds a Journalism degree from the Walter Cronkite School of Journalism at ASU. Shelby’s attention to detail and love for serving people shows through in her client representation.
ABBEY HERR Administrative Support
Abbey.Herr@Yahoo.com Direct 480.433.8326
Originally from Iowa, Abbey’s parents moved her and her brother to Gilbert when she was 2. A graduated of Gilbert High School; she was a member of the basketball, volleyball and audition dance programs for her High School. Growing up in Gilbert has given her a great amount of appreciation and knowledge about the town and surrounding areas. She has worked in real estate since 2006. Starting out in New Home Sales with Meritage Homes, before entering the re-sale side of Real Estate in 2009. Currently Abbey is a member of the Southeast Valley Association of Realtors, the Junior League of Phoenix and Gamma Phi Beta Alumnae Associations.
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ABB
UNDERSTANDING AGENCY Seller Agency (Single Agency) •
Agent will represent the best interests of the Seller
•
Agent will owe the Seller fiduciary duties
•
Agent must give the Buyer all material facts so that the Buyer can make an educated decision
Buyer Seller
Buyer Agency (Single Agency) •
Agent will represent the best interests of the Buyer
•
Agent will owe the Buyer fiduciary duties
•
Agent must give the Seller all material facts so that the Seller can make an educated decision
Buyer
Transaction Broker (Dual Agency) •
Agent represents both the Buyer and the Seller equally
•
Agents objective is to get a mutually satisfactory agreement among all parties
•
Agent gives all options to the Buyer and the Seller
•
Depending on the local market, all parties may be present at contract presentation to negotiate on their own behalf
•
All parties have confidentiality. Agent may do nothing to the detriment of either the Buyer or the Seller
•
Both the Buyer and the Seller have a right to counsel. Before making any decisions, both parties have the right to seek family, religious, legal, or financial counsel
Seller
Buyer
Seller
Important Fact: Confidentiality and Agency An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate agent/broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes an agent/broker who represents a Seller from disclosing to a Buyer that the Seller can, or must, sell a property below the listed price. Conversely, a broker who represents a Buyer is prohibited from disclosing to a Seller that the Buyer can, or will, pay more than what has been offered for a property.
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BENEFITS FROM A PROFESSIONAL REALTOR Before you make the decision to try and sell your home alone, consider the following benefits a Realtor can provide that you may not be aware of:
Many people believe they can save a considerable amount of money by selling their homes themselves. It may seem like a good idea at the time, but while you may be willing to take on the task, are you qualified? Following are some questions to help you realistically assess what’s involved: DO you have the knowledge, patience, and sales skill needed to sell your home?
IF your Buyer is aggressive, CAN you negotiate a successful outcome for yourself?
DO you know how to determine the current market value of your home? ARE you aware of conditions in the marketplace today that affect value and length of time to sell?
DO you know how to determine whether or not a Buyer can qualify for a loan?
ARE you concerned about having strangers walking through your home? DO you understand the steps of an escrow and what’s required of you and the Buyer?
ARE you familiar enough with real estate regulations to prepare a binding sales contract? Counter-offers?
ARE you aware that every time you leave your home, you are taking it off the market until you return?
HAVE you made arrangements with an escrow and title company, home
warranty company, pest-control service and lender to assist you with the transaction?
DO you need to hire a real estate attorney? If so, DO you know what the cost will be and how much liability they will assume in the transaction?
DO you know how to advertise effectively and what the costs will be? ARE you aware that prospective Buyers and bargain hunters will expect you to lower your cost because there’s no Realtor involved?
A REALTOR understands market conditions and has access to information not available to the average homeowner. A REALTOR can advertise effectively for the best results. A REALTOR knows how to price your home realistically, to give you the highest price possible within your time frame. A REALTOR is experienced in creating demand for homes and how to show them to advantage. A REALTOR knows how to screen potential Buyers and eliminate those who can’t qualify or are looking for bargain-basement prices. A REALTOR knows how to go toe-to-toe in negotiations. A REALTOR is always “on-call,” answering the phone at all hours, and showing homes evenings and weekends. A REALTOR can remain objective when presenting offers and counter-offers on your behalf. A REALTOR maintains errors-and-omissions insurance. A REALTOR will listen to your needs, respect your opinions and allow you to make your own decisions. A REALTOR can help protect your rights, particularly important with the increasingly complicated real estate laws and regulations. A REALTOR is experienced with resolving problems to ensure a successful closing on your home.
DO you understand the various types of loans Buyers may choose and the advantages and disadvantages for the Seller?
ARE you prepared to give up your evenings and weekends to show your home to potential Buyers and “just-looking” time wasters?
Only you can determine whether you should attempt to sell your home - probably your largest investment - all alone. Talk with a Realtor before you decide. You may find working with a professional is a lot less expensive and much more beneficial than you ever imagined!
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PRICING YOUR HOME DETERMINING THE PROPER PRICE
CONSEQUENCES OF OVER PRICING
To help you determine what the best list price is for your home we will provide you with extensive market data for your neighborhood, as well as surrounding areas. Comparing similar homes that are currently available, pending, or under contract, and properties that have recently sold and closed escrow, will give us a clear picture of the market and pricing trends.
Timing is extremely important in the real estate market. A property attracts the most activity from the real estate community and potential Buyers when it is first listed. Over-priced homes, on average take 3x longer to sell. This means more mortgage payments, maintenance, and showings to accommodate. Consider the cost savings by pricing slightly under market value and a quicker sale
Price
5 FACTORS THAT AFFECT THE VALUE OF YOUR PROPERTY LOCATION :
The old real estate axiom tells us that the most important aspect of valuing real estate is the location of the property. You can install all of the Brazilian cherry flooring, granite counter tops, and stainless appliances you want, but you cannot change the location of a home.
TIMING :
Timing is everything. Economic conditions, interest rates, and availability of loan programs, fluctuate and influence property values. Only consider the current market conditions when assessing value.
CONDITION :
Prospective buyers often make purchases based on emotion, first impressions are important. Optimizing the physical appearance of your home will maximize the Buyer’s perception of value.
COMPETITION : Buyers will be comparing your property against other properties with similar features. Upgrades and additional features can add value, but, the small fortune you spent on the custom faux painted walls may actually hurt the value, as perspective buyers may see this as a big expense to cover up. PRICE :
The single most important factor when selling a home is the price tag. The asking price must reflect the market value set by the other factors. Sentimental value, although real to the Seller, holds no monetary value in the market.
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MARKETING YOUR HOME GETTING THE WORD OUT There are many different ways to approach marketing your home, we have found consistent success when we market to both the public and the Realtor community. The internet and recent technological advances have changed the landscape of our business tremendously. Ten years ago many real estate agents were still learning how to scan and attach photos to an email. Today we have robust websites with virtual tours, digital picture phones capable of sending email, and new innovative marketing tools that allow us to reach a broader audience. Although our marketing has proven to be successful, each property is unique, and we may try a different approach to get the response we are looking for.
MARKETING TO THE REALTOR COMMUNITY H Your home will be posted to the MLS (multiple listing service) with multiple photos J MLS is used by real estate professionals J It represents a comprehensive/accurate database of homes currently for sale J Offers additional search criteria and information not found on public sites J The photos we post will highlight your homes best features H Sign and post in your front yard J This will increase visibility and aid Realtors locating your home for showings J The sign is branded with our logo and contact information J We may also attach additional signs to highlight your homes features J Information tubes may be added to homes located in a high traffic area H We will immediately notify our large network of Realtors of the availability of your home and it’s features J 95% of all homes sales have both a Buyer’s Agent and Seller’s Agent H Various email campaigns, broker tours, advertising at office and association meetings
MARKETING TO THE GENERAL PUBLIC H Your home will be posted on www.ArizonaPerspective.com H Your home will be posted on www.Realtor.com J Realtor.com is the #1 site for home buyers beginning their search
H Your home will be posted on www.Facebook.com/ PerspectiveRealEstateGroup J Social networking is a great way for us to keep up to date with other agents, friends, family, previous clients and passerby H MLS, In conjunction with Listhub.com will post your
property on over 37 of the most popular real estate sites H We will immediately notify our database of potential Buyers and past clients of the availability of your home and it’s features H Open house upon request H Just listed postcards
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MARKETING YOUR HOME
ARIZONA REGIONAL MULTIPLE LISTING SERVICE, INC.
real estate search
MyREALTY.
com
Global Listing Service
RealtyTrac RealtyStore.com
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STAGING YOUR HOME TO SELL WHAT EXACTLY IS HOME STAGING? Staging is preparing your home to show off its best features. The three goals of staging are to make your home;
We want to WOW them from the start and leave them wanting more at the end.
• Look Spacious • Have Universal Appeal • Be Q-tip Clean Simply put, staging is going through the mechanics of arranging a home to appeal to the masses.
BEFORE
WHY SHOULD YOU CONSIDER STAGING? • Staging is the most important marketing tool we use. • The outside is every bit as important as the inside. • Presentation is everything in home buying and you only get one chance to make a good first impression!
BEFORE
AFTER
IT’S ALL ABOUT THE DETAILS... As a Seller in today’s market, you have to take your house from your home to a beautiful product. You want the Buyer to envision their family in your home. You do that by de-personalizing, de cluttering, cleaning and adding that extra wow factor which will put you ahead of your competition. It is important to remember that you live in a home differently than you sell a home. A professional home stager will help pull it all together and ensure that the buyers will see your home in the best possible light.
Whether your home is vacant or occupied, staging is the first step in preparing your home for the market place. You have 5-10 seconds to impress the Buyer when they walk in your front door.
AFTER
Staged homes are on the market about half of the time of non-staged homes, and bring an average of 6.3% higher sales price.
Photos courtesy of
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NO ONE HAS A MORE IMPORTANT ROLE THAN YOU!
Homeowner Checklist
STEP 1: Clean Up & Touch Up FFDust blinds FFClean fans FFWash floors and baseboards FFSteam tile grout FFVacuum and shampoo carpets FFClean and organize closets & cabinets FFClean windows and window sills FFClean interior and exterior light fixtures FFPower wash house exterior, patio, garage, walkways, front porch FFClean vents and change air filters FFTouch up paint FFRemove scuff marks on wall and doors
STEP 2: Fix Up FFRepair leaky faucets FFPatch and paint cracks/holes in walls and ceilings FFReplace broken/cracked windows FFRepair broken sprinkler system
STEP 3: Trim Up & Spruce Up FFMow and edge grass FFTrim trees and shrubs FFPull weeds FFRoll up hoses and put away toys and tools FFRemove all debris from yard
STEP 4: Freshen Up FFEliminate odors FFAvoid cooking strong smelling foods FFEmpty garbage often FFNO SMOKING
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WHAT HAPPENS NEXT NOW THAT YOU HAVE ACCEPTED AN OFFER… HERE’S A BRIEF VERSION OF WHAT HAPPENS NEXT: • Buyer will open escrow and deposit earnest money. • Title/Escrow company will begin their work. • Watch your mail for important title documents.
• Buyers will work with their lender to secure and finalize their financing. We will keep in constant communication with the Buyers lender to ensure all parties are doing their part to stay on track.
• Seller disclosures. You will be required per the contract to make certain disclosures about your knowledge of the property. We will supply you with the proper forms to make the necessary disclosures.
• Buyer inspection and repair negotiations. The Buyers will have their due diligence period per the contract. This will be the time for them to do the necessary inspections. Once their inspections are complete, there may be some negotiations on repairs requested. Remember, the better kept your property is, the less likely it will be for you to receive a lengthy repair request. It is best to take care of any deferred maintenance before the Buyers home inspection. It is the Sellers responsibility to keep the utilities on until the day of closing.
• Appraisal will be ordered by the Buyers lender. The property must appraise at the agreed upon purchase price or better. With certain loan programs such as FHA and VA the property will have to meet specific requirements in regards to condition. Any requirements that are not met will be noted in the appraisal and have to be repaired prior to close of escrow. • Once all the details of the negotiations are finalized, the title company will prepare the closing documents for both the Buyer and Seller. The escrow officer will work with all parties to arrange appointments for signing the necessary documents. You will sign your closing documents a few days before the actual closing date.
• Finally….funding and recording. This is what we call “Closing” . Once your Realtor has verified the recording you will be notified that the closing is complete!
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THE ESCROW PROCESS WHAT IS AN ESCROW? An escrow process is wherein the Buyer and Seller deposit written instructions, documents, and funds with a neutral third party until certain conditions are fulfilled. In a real estate transaction, the Buyer does not pay the Seller directly for the property. The Buyer gives the funds to an escrow company who, acting as an intermediary, verifies that title to the property is clear and all written instructions in the contract have been met. Then the company transfers the ownership of the property to the Buyer through recordation and pays the Seller. This process protects all parties involved.
WHAT THE TITLE COMPANY WILL DO: OPEN escrow and deposit Buyer’s “good faith” funds in a separate escrow account. CONDUCT a title search to determine ownership and status of the subject property. ISSUE a title commitment and begin the process to delete or record items to provide clear title to the property. Per contract, CONFIRM that lender has determined Buyer is qualified for a new loan.
The State of Arizona licenses and regulates all escrow companies. The Insurance Commissioner and the State Banking Department can inspect a company’s records at any time, providing further oversight of the company’s management and position as an impartial third party to the transaction.
In Arizona, escrow services are generally provided by a title insurance company instead of an attorney. The stability, reliability and performance of your title and escrow company are vital to protect the interests of all parties to the transaction.
HOW IS AN ESCROW OPENED? Once the Buyer has completed the contract (or Purchase Agreement), and the Seller has accepted the offer, the contract is placed in escrow. As a neutral party to the transaction, the escrow officer can respond only to those written instructions agreed to mutually by all “interested” parties (Seller and Buyer).
IF Buyer is assuming Seller’s loan, request Buyer complete a beneficiary’s statement. MEET all deadlines as specified in the contract. REQUEST fees, such as property taxes, per the contract, and prepare the settlement statement. SET separate appointments: Seller to sign documents; Buyer to sign documents and deposit funds. REVIEW documents ensuring all conditions and legal requirements are fulfilled; request funds from lender. When all funds are deposited, RECORD documents at the County Recorder to transfer the subject property to the Buyer. After recordation is confirmed, CLOSE escrow and disburse funds, including Seller’s proceeds, loan payoffs, Realtors’ commissions, related fees for recording, etc. PREPARE and send final documents to parties involved.
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TITLE COMMITMENT.
The escrow officer orders the title commitment from our title department. Upon receiving this request, an examination begins of all historical records pertaining to your property. Barring any unusual circumstances, the title company issues a commitment for title insurance indicating a clear title or items which must be cleared prior to closing. The Buyer receives a copy of the title commitment when we complete the title search.
SELLER REQUIRED DISCLOSURE.
If directed by the contract, the seller will provide the following items which require a response from the Buyer. Your Realtor can help you with these. a. Seller’s Property Disclosure Statement listing any existing problems known to the Seller. b. Information pertaining to the Home Owners Association (HOA) or Planned Unit Development Restriction (CC&Rs), if applicable. c. Flood Hazard Disclosure if the property is in a flood area. d. Independent inspections, such as termite and septic, and any repairs as required.
CONSIDER THIS.
One escrow transaction could involve over twenty individuals including Realtors, Buyers, Sellers, attorneys, escrow officer, escrow technician, title officer, loan officer, loan processor, loan underwriter, home inspector, termite inspector, insurance agent, home warranty representative, contractor, roofer, plumber, pool service, and so on. And often one transaction depends on another. When you consider the number of people involved, you can imagine the opportunities for delays and mishaps. So, much like an airline pilot can’t prevent turbulence during a flight, your experienced Realtor and escrow team can’t prevent unforeseen problems from arising. However, they can help smooth out the bumps and get you safely through the successful closing.
WHO SELECTS THE TITLE COMPANY? Brokers and agents have often asked whether a Seller can require the Buyer to use a specific title company when the Seller is paying for the buyer’s title insurance. AAR has contacted HUD on several occasions regarding this issue. In July 2000, AAR again contacted HUD for clarification and provided HUD with copy of AAR’s Residential Resale Purchase Contract (‘Contract’). The Contract quotes 12 USC 2608 at lines 99-101 and states: “RESPA: The Real Estate Settlement Procedures Act (“RESPA”) requires that no Seller of property that will be purchased with the assistance of a federally related mortgage loan shall require, directly or indirectly, as a condition of selling the property, that title insurance covering the property be purchased by the Buyer from any particular title company.”
The Contract also requires the Seller to pay for the Buyer’s title insurance policy. The Contract at line 116-119 states: “Buyer shall be provided at Seller’s expense an American Land Title Association (“ALTA”) Homeowner’s Title Insurance Policy, or if not available, an ALTA Residential Title Insurance Policy (“Plain Language”/”1-4 units”) or, if not available, a Standard Owner’s Title Insurance Policy, showing the title vested in Buyer…”
Pursuant to the Contract line 77, the Buyer may, and usually does, pay for the costs of the lenders title insurance policy. AAR requested that William G. Christie of the RESPA/Interstate Land Sales Division provide written confirmation that under the above contractual terms, the Seller can require as a condition of selling the property, that the title insurance covering the property be purchased (by the Seller) from a particular title company, without violating RESPA, 12 USC 2608. Rebecca J. Holtz, Acting Director, Office of Consumer and Regulatory Affairs, Director, RESPA/ILS Division responded as follows: “…The Department will not enforce Section 9 of RESPA against a Seller who selects the title insurance company if the Seller is paying for the owner’s title insurance policy, and does not require the Buyer to use the title insurance company for the simultaneously issued lender’s policy. HUD would take action under Section 9, however, in situations where a Seller required a Buyer to pay the Seller an amount towards closing costs and the Seller used a portion of the Buyer’s paid closing costs for the owner’s title insurance without providing the Buyer with a choice of that title company.” Permission for reproduction was obtained from the author and Arizona Association of Realtors. These are the opinions of HUD as of August 2000.
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UNDERSTANDING TITLE INSURANCE WHAT IS TITLE INSURANCE? Title Insurance provides coverage for certain losses due to defects in the title that occurred prior to your ownership. The Seller can give only those rights that previously have been received with “good title.” Title Insurance protects against defects such as prior fraud or forgery that might go undetected until after closing and possibly jeopardize your ownership and investment. Why TITLE INSURANCE IS NEEDED. Title insurance assures the new Buyers that they are acquiring marketable title from the Seller. It is designed to eliminate risk or loss caused by defects in title from the past. Title insurance protects the interest of the mortgage lender as well as the equity of the Buyer for as long as they or their heirs have any interest in the property. When IS THE PREMIUM DUE? It is a one-time premium which is paid at the close of escrow. It is customary for the Seller to pay for the Owner’s Policy. If there is a new loan, the Buyer pays for the Lender’s Policy. The policy has a perpetual term and provides coverage for as long as you are in position to suffer a loss. Do ALL TITLE COMPANIES OFFER THE SAME PROTECTION? Any standard American Land Title Association (ALTA) policy covers the same basic items. However, title companies may offer additional coverages. Check with your escrow officer to see what additional coverage is offered by your selected title company.
WAYS TO TAKE TITLE INSURANCE? Per Section 3b of Arizona’s Residential Resale Real Estate Purchase Contract, “Taking title may have significant legal, estate planning and tax consequences.” Therefore, The Perspective Real Estate Group recommends you seek legal and tax advice from qualified professionals in order to determine how you should take title in a real estate transaction. • COMMUNITY PROPERTY Requires two married people; each spouse holds an undivided one-half interest in the estate; one spouse cannot partition the property by selling his or her interest; upon death, the estate of the decedent must be “cleared” through probate, affidavit, or adjudication. • JOINT TENANCY WITH RIGHTS OF SURVIVORSHIP The parties involved do not need to be married; there can even be more than two joint tenants; each joint tenant hold an equal and undivided interest in the estate; one joint tenant can partition the property by selling his or her joint interest; no court action is needed to “clear” title upon the death of joint tenant(s). • COMMUNITY PROPERTY WITH THE RIGHT OF SUVIVORSHIP Requires two married people; each spouse hold an undivided one-half interest in the estate; no court action is needed to “clear” title upon the first death. • COMMUNITY PROPERTY WITH THE RIGHT OF SUVIVORSHIP The parties involved do not need to be married; there can even be more than two tenants in common; each tenant in common holds an undivided fractional interest in the estate, which can be disproportionate; each tenant’s share can be conveyed, mortgaged, devised to a third party; upon death, the estate of the decedent must be “cleared” through probate, affidavit, or adjudication. •SOLE AND SEPARATE A married person may take title as “sole and separate,” however, because Arizona is a community property state, his or her spouse must execute a disclaimer deed to avoid the presumption of community property.
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UTILITY PROVIDERS
Gas
Electric SRP............................................................................................602-236-8888 www.srpnet.org APS.................................................................................................602-371-7171 www.aps.com
Water/ Swer City of Mesa......................................................................480-644-2221 www.mesaaz.gov/UTILITIES/ City of Chandler.............................................................480-782-2280 www.chandleraz.gov City of Gilbert.................................................................480-503-6800 www.ci.gilbert.az.us/utilities City of Scottsdale..........................................................480-312-5650 www.scottsdaleaz.gov/utilities.asp City of Tempe
480-350-8361 www.tempe.gov
Southwest Gas.............................................................. 877-860-6020 www.swgas.com
Fire Rural Metro Fire.............................................................800-352-2309 www.ruralmetro.com
Phone Qwest Communications..............................................800-491-0118 www.qwest.com
Cable\Satallite Cox Communications.................................................623-594-1000 www.cox.com Dish Network....................................................................866-770-6685 www.dishnetwork.com Directv....................................................................................888-795-9489 www.directv.com
City of Phoenix................................................................602-262-6251 www.cityofphoenix.gov Town of Queen Creek..............................................480-358-3450 www.ci.gilbert.az.us Johnson Utilities............................................................480-987-9870 www.johnsonutilities.com Queen Creek Water....................................................480-987-3240 www.queencreek.org
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TERMS YOU SHOULD KNOW Acceptance: The date when both parties, seller and buyer, have agreed to and completed signing and/or initialing the contract.
Encumbrance: Anything that burdens (limits) the fee title to property, such as a lien, easement, or restriction of any kind.
Adjustable Rate Mortgage: A mortgage that permits the lender to adjust the mortgage’s interest rate periodically on the basis of changes in a specified index. Interest rates may move up or down, as market conditions change.
Equity: The value of real estate over and above the liens against it. It is obtained by subtracting the total liens from the value.
Amortized Loan: A loan, which is paid in equal installments during its term. A.P.R. (Annual Percentage Rate): A term used in the Truth in Lending Act. It represents the relationship of the total finance charge (interest, discount points, origination fees, loan broker, commission, etc.) to the amount of the loan. Appraisal: An estimate of real estate value, usually issued to standards of FHA, VA, and FHMA. Recent comparable sales in the neighborhood is the most important factor in determining value. This should be contrasted against the home inspection. Appreciation: An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation. Assumable Mortgage: Purchaser takes ownership to real estate encumbered by an existing mortgage and assumes responsibility as the guarantor for the unpaid balance of the mortgage. Bill of Sale: Document used to transfer title (ownership) of PERSONAL Property. Closing Statement (HUD1): A financial statement rendered to the buyer and seller at the time of transfer of ownership, giving an account of all funds received or expended. Cloud on Title: Any condition that affects the clear title to real property. Comparable Sales: Sales that have similar characteristics as the subject property and are used for analysis in the appraisal process. Contract: An agreement to do or not to do a certain thing. Consideration: Anything of value to induce another to enter into a contract, i.e., money, services, a promise.
Escrow Payment: That portion of a mortgagors monthly payment held in trust by the lender to pay for taxes, hazard insurance, mortgage insurance, lease payments and other items as they become due. Fannie Mae: Nickname for Federal National Mortgage Corporation (FNMA), a tax-paying corporation created by congress to support the secondary mortgages insured by FHA or guaranteed by VA, as well as conventional home mortgages. Federal Housing Administration (FHA): An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing. FHA Insured Mortgage: A mortgage under which the Federal Housing Administration insures loans made, according to its regulations Fixed Rate Mortgage: A loan that fixes the interest rate at a prescribed rate for the duration of the loan. Foreclosure: Procedure whereby property pledges as security for a debt is sold to pay the debt in the event of default. Freddie Mac: Nickname for Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market. It purchases and sells residential conventional home mortgages. Graduated Payment Mortgage: Any loan where the borrower pays a portion of the interest due each month during the first few years of the loan. The payment increases gradually during the first few years to the amount necessary to fully amortize the loan during its life.
Deed: Written instrument, which when properly executed and delivered, conveys title to real property.
Investor: The holder of a mortgage or the permanent lender for whom the mortgage banker services the loan. Any person or institution that invests in mortgages.
Discount Points: A loan fee charged by a lender of FHA, VA or conventional loans to increase the yield on the investment. One point = 1% of the loan amount.
Lease Purchase Agreement: Buyer makes a deposit for future purchases of a property with the right to lease the property for the interim.
Easement: The right to use the land of another.
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TERMS YOU SHOULD KNOW Loan to Value Ration (LTV): The ratio of the mortgage loan principal (amount borrowed) to the properties appraised value (selling price). Example on a $100,000 home, with a mortgage loan principal of $80,000 the loan to value ratio is 80%. Mortgage: A legal document that pledges a property to the lender as security for payment of a debt. Mortgage Insurance Premium (MIP): The amount paid by a mortgagor for mortgage insurance. This insurance protects the investor from possible loss in the event of a borrowers default on a loan. Mortgagor: The borrower of money or the giver of the mortgage document. Note: A written promise to pay a certain amount of money. Origination Fee: A fee paid to the mortgagee for paying the mortgage before it becomes due. Also known as prepayment fee or reinvestment fee. Private Mortgage Insurance (PMI): See Mortgage Insurance Premium. Promissory Note: A written contract containing a promise to pay a definite amount of money at a definite future time.
Realtor: A member of local and state real estate boards, which are affiliated with the National Association of Realtors (NAR). Rent With Option: A contract, which gives one the right to lease property at a certain sum with the option to purchase at a future date. Second Mortgage/Second Deed of Trust/Junior Mortgage or Junior Lien: An additional loan imposed on a property with a first mortgage. Generally, a higher interest rate and shorter term than a first mortgage. Severalty Ownership: Ownership by one person only. Sole ownership. Survey: The process by which a parcel of land is measured and its area ascertained. Tenancy In Common: Ownership by two or more persons who hold an undivided interest without right of survivorship. (In event of the death of one owner, his/her share will pass to his/her heirs.) Title Insurance: An insurance policy which protects the insured (purchaser or lender against loss arising from defects in the title).
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