Buyers Presentation | Dielmann SIR

EXPERT INSIGHTS FOR SUCCESSFUL HOME BUYING

DEAR VALUED CLIENTS, CUSTOMERS, AND FRIENDS,

You may have seen the news stories about the recent proposed settlement from the National Association of REALTORS® (NAR). Unfortunately, the click bait headlines have contained a lot of misinformation about our industry.

We want to provide you with a basic understanding of what this proposal means, as well as address the misinformation below:

WHAT IS THE NAR SETTLEMENT ALL ABOUT?

On Friday, March 15, 2024, The National Association of REALTORS® announced a proposed lawsuit settlement that included a monetary settlement and two changes to business practices: the removal of the offer of Buyer Agent Compensation in NAR-owned MLSs and the addition of a requirement for Buyer Agents to use Buyer Representation Agreements.

WHAT WILL CHANGE AND WHEN?

Assuming this proposed settlement is approved, the changes will take place in mid-July 2024. We expect MLSs to remove the offer of Buyer Agent Compensation. As this proposal is written, sellers may still offer Buyer Agent Compensation without it being published in MLS. There are some concerns that this could be a step away from consumer transparency. Buyer Agents will also need to have signed agreements, just as Listing Agents must have Listing Agreements.

DID OR DOES EVERYONE CHARGE 6%?

No. This allegation is wildly inaccurate. Different marketplaces see different ranges of compensation. From town to town, company to company, and listing to listing, there has always been variation in our marketplaces. The industry does not – and cannot – collude or collaborate on what a universal commission rate can be. Commissions are derived from the brokerage. We discuss our services, market share, and experience, not what our competitors are asking for.

WILL THIS LOWER THE HOUSING COSTS?

Home prices in a free market economy are determined by supply and demand. Nothing in this settlement addresses the lack of supply or the high levels of demand. Therefore, this does not lower the cost of buying a home.

WHAT IF I HAVE AN EXISTING CONTRACT?

Nothing is likely to change before the July target date. However, we are awaiting the final details of the settlement as approved by the court. At this time, our understanding is that when the July target date arrives, the only change to an existing contract is that no offer of Buyer compensation from the listing agent or seller can be published in the MLS. Agents working with buyers will need to have written contracts to represent them.

WHAT CONSUMER PROTECTIONS ARE IN BUYER REPRESENTATION?

A Buyer Agent is responsible for being an exclusive Fiduciary. Fiduciary duties are all the duties that a real estate agent or broker is legally beholden to when working with a client. These duties, which are in the client’s best interest, are obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care.

DOES A BUYER IN THE MARKET NEED BUYER REPRESENTATION?

A buyer does not have to use a Buyer Agent. However, in a low inventory “seller’s market,” it is difficult to compete against other buyers who get expert advice on offer strategies and negotiation.

WHAT CAN THE LISTING AGENT NOT DO FOR THE BUYER?

• Offer strategies that have your interests in mind

• Recommend Home Inspectors

• Act as your exclusive Fiduciary

• Provide comprehensive Market Analysis interpretation for pricing

• Advocate for you

WHAT ARE THE RISKS WITH A BUYER NOT HAVING A REPRESENTATIVE?

• Not having a representative to protect and promote the interests of the buyer client

• Not having an agent protecting the fiduciary duties which include loyalty, confidentiality, disclosure, obedience, reasonable care and diligence, and accounting

• Not learning about off-market opportunities

• Not being informed and educated about the market

• Not having a well-prepared, competitive offer in a multiple-offer situation

WILL THE BUYER AGENCY GO AWAY?

No. Buyer Agency is the way that buyers get expert guidance — from preparation and search to offer strategy and negotiation, and so much in between. A home represents an important investment — one that continues to be at the heart of financial wellness for most Americans.

Dielmann Sotheby’s International Realty prioritizes focusing resources on those we serve. To our clients, thank you for the privilege of representing your interests and providing outstanding service as you navigate one of life’s most important and complex transactions. We will continue communicating with you as we understand more about their settlement and the ongoing industry dynamics. Please don’t hesitate to reach out to us with questions.

Your Home Is More Than An Address

It’s where you experience life, connection, and growth. Purchasing a home is one of the most important decisions you’ll make, and the right advice is paramount. For those on a journey, there is only Dielmann Sotheby’s International Realty.

A TRUSTED BRAND

In the spirit of innovation, an exceptional luxury real estate company bearing the Sotheby’s name was launched in 1976. Beyond the beautiful properties and the personal touch of our agents, only one brand can deliver a lifestyle that caters to you. With a network of homes for sale worldwide, our website lets you search property listings globally, and includes a large inventory of luxury homes for sale, including houses, condos, townhomes, villas, and more.

The Sotheby’s International Realty® brand is synonymous with best-in-class service. For us, “Luxury” is defined by a legacy of providing an unmatched experience and service level to every client, regardless of area or price point. Our professional knowledge and expertise strategically places you in a position to obtain exactly what you’re looking for in a home, along with our devotion to represent your best interest.

Network & Affiliations

The Sotheby’s International Realty brand was established to connect the finest real estate companies to the most prestigious clientele in the world. Today our network boasts more than 26,500 affiliated independent sales associates, located in over 1,100 offices, in 80+ countries and territories worldwide, placing over 10,000 referrals every year.

Our network members utilize innovation with relevant reach to assist clients in the most unique way. Helping our clients navigate the world of real estate is what truly helps set us apart, alongside our ability to connect buyers and sellers globally. With a dedicated liaison between the Sotheby’s Auction House and Sotheby’s International Realty, we are able to help unite thousands of buyers with the properties our network represents.

Understanding Agency

Your agent will provide you with a Buyer’s Exclusive Agency Contract that will explain in detail the role of an Agent. Legally, the Brokerage is the entity that represents a Buyer or Seller, and the Agent is a sub-agent of the Brokerage. In this document, we will refer to them as the Agent, and the brokerage as the Broker.

DESIGNATED AGENT

Acts as your specific agent, whether you are a buyer or tenant, or seller or landlord. When the broker makes this appointment, the other real estate licensees in the company do not represent you.

There are two exceptions with both resulting in dual agency or transaction brokerage:

1. The agent representing you as a buyer or tenant is also the agent who listed the property you may want to buy or lease.

2. The supervising broker of two designated agents becomes involved in the transaction.

SELLER’S OR LANDLORD’S LIMITED AGENT

Duty to perform the terms of the written agreement made with the seller or landlord, to exercise reasonable skill and care for the seller or landlord, and to promote the interests of the seller or landlord with the utmost good faith, loyalty and fidelity in the sale, lease, or management of property.

Information given by the buyer/tenant to a licensee acting as a Seller’s or Landlord’s Limited Agent will be disclosed to the seller/landlord.

BUYER’S OR TENANT’S LIMITED AGENT

Duty to perform the terms of the written agreement made with the buyer or tenant, to exercise reasonable skill and care for the buyer or tenant and to promote the interests of the buyer or tenant with the utmost good faith, loyalty and fidelity in the purchase or lease of property.

Information given by the seller/landlord to a licensee acting as a Buyer’s or Tenant’s Limited Agent will be disclosed to the buyer/tenant.

DISCLOSED DUAL AGENT

With the written consent of all parties, represents both the seller and the buyer or the landlord and the tenant.

A Disclosed Dual Agent may disclose any information to either party that the licensee gains that is material to the transaction.

A dual agent may not disclose information that is considered confidential, such as:

• Buyer/Tenant will pay more than the purchase price or lease rate

• Seller/Landlord will accept less than the asking price or lease rate

• Either party will agree to financing terms other than those offered

• Motivating factors for any person buying, selling or leasing the property

• Terms of any prior offers or counter offers made by any party.

BENEFITS OF EXCLUSIVE REPRESENTATION

Buyer representation in real estate is crucial for several reasons, as it provides a range of benefits and protections for individuals navigating the home buying process.

• Market Insight and Local Knowledge

• Budget Alignment and Available Financing

• Access to Listings and Property Tours

• Review of Disclosures and Reports on Selected Homes

• Negotiation Skills and Advocacy

• Guidance on Inspections and Due Diligence

• Post-Purchase Support and Assistance

8 Villa Coublay Drive | Frontenac, Missouri

Understanding Agency (continued)

BROKERAGE COMMISSION

Similar to a Listing Agreement, Buyers can enter into a contract for professional services and representation between themselves and their Broker/Agent. This also memorializes the compensation for the Buyer’s Agent and Brokerage. It should be noted that the amount a brokerage charges is not fixed by law - the commission amount is always negotiable, however, brokerages may set minimum fees.

COMPENSATION DIVISION

The compensation paid for Buy Side representation is not exclusively paid to the Agent. Compensation is shared with the Brokerage to cover business operations, expenses such as Errors and Omisions Insurance, membership in industry organizations, and is used to offset Agent’s necessary business expenses associated with licensed activities.

WHO PAYS COMMISSION?

SELLER PAID BROKERAGE COMMISSION

When listing a property for sale, sellers complete a Listing Agreement to authorize payment to the Listing Broker. In some cases, the Listing Agreement also offers a commission amount to be paid by the seller to the Broker representing the buyer, which is then listed in the MLS.

If the amount of commission offered in the MLS is less than the minimum fees required by the Buyer’s Broker, a Buyer’s Exclusive Agency Contract will address the difference, so a Buyer’s Broker/Agent is fairly compensated.

Buyers can request that sellers pay the commission due the Buyer’s Broker in their offer to purchase, which can dictate the commission to be incorporated into the final sale price, if accepted. In that case the commission will be paid at closing by the seller.

BUYER PAID BROKERAGE COMMISSION

A Buyer’s Exclusive Agency Contract allows your Agent to represent you even when no offer of commission is offered by a Seller. Your Agent can search for properties that are not in the MLS, and may be For Sale By Owner, Off-Market and Coming Soon Listings - as the Buyer Representation Agreement covers the compensation for buy-side representation at the agreed upon commission rate.

The Buyer’s Agent Advantage

Investing in a home is often one of the most significant financial decisions you’ll make, and it will have a meaningful impact for years to come. Enlisting the services of a skilled real estate advisor can transform your journey, serving as your adept navigator through the complexities of negotiations, extensive documents, and potential pitfalls.

By leveraging our expertise, you gain a strategic edge in your home search, tapping into valuable local resources. Beyond transactions, the seasoned perspective of an agent becomes a stabilizing force, offering indispensable support during what might otherwise be a challenging process.

YOUR TRUSTED REAL ESTATE ADVISOR

Each homebuying journey is unique, just like our clients. As your Buyer’s Agent I am your dedicated advocate, providing insider knowledge, expert negotiation skills, and guidance throughout the home-buying process. Here are a few advantages I offer to ensure a seamless transaction for you.

INITIAL CONSULTATION & MUTUAL AGREEMENT

Through a comprehensive initial consultation, I will collaborate closely with you to gain insights into your specific needs, budget, and desired property features. This personalized approach allows me to tailor the search effectively, streamlining the process and ensuring that only the most relevant properties are presented. Additionally, we will enter into a mutual agreement that aligns with your best interests and is commonly known as a “Buyer’s Brokerage Agreement”.

EXPERT MARKET KNOWLEDGE

As your agent, I can offer invaluable guidance by tapping into in-depth knowledge of area communities, current and past market conditions, as well as key indicators shaping real estate trends. Armed with this comprehensive understanding, I will help identify emerging opportunities and potential challenges.

DIELMANN SOTHEBY’S EXCLUSIVE SELECTIONS

An Exclusive Selection listing is a property that a Dielmann Sotheby’s International Realty Global Real Estate Advisor can share directly with their colleagues and buyers — but that isn’t visible on the Multiple Listing Service (MLS). Property details aren’t shared widely and won’t appear on public home-search websites.

A seller Listing their home as an Exclusive Selection lets the seller control what information is released regarding your home and remain discreet throughout the sale and marketing process. We encourage our sellers to allow us to market their properties via the MLS, to ensure maximum exposure to agents and buyers (an approach that can result in the highest price in the shortest amount of time). Still, we fully understand that privacy may be paramount.

LENDER INTRODUCTIONS & FINANCING OPTIONS

Securing suitable financing is a pivotal aspect of the home-buying process. Leveraging my extensive network to connect clients with reputable lenders is a key part of this process. This personalized approach ensures that my clients receive tailored financing options aligned with their specific needs and financial circumstances.

EXPANDED SEARCH POWER

Armed with access to a vast network of industry connections, including exclusive databases and off-market opportunities, I can uncover hidden gems that may not be readily available to the general public. This expanded search power enables me to present clients with a more comprehensive range of properties that align with their specific criteria and preferences. By tapping into this extensive network, I can increase the likelihood of finding the perfect property in a competitive market.

FACILITATE PROPERTY TOURS

By understanding your unique preferences and priorities, I’m able to curate a tailored selection of properties for viewing. My knowledge of local neighborhoods, market trends, and property histories allows me to provide insightful commentary during tours, offering you a comprehensive perspective. Additionally, I will schedule tours so you can explore homes that align closely with your outlined criteria. This hands-on approach not only saves time but also enhances the quality of the home-search process.

The Buyer’s Agent Advantage (continued)

SUCCESSFUL NEGOTIATING

After submitting an offer, you should be prepared to negotiate, not just on the initial price,but on all key factors of the offer submitted, including deposit, inclusions, dates for closing and possession, and deadlines for subject removals. Ensure that you know your budget and purchase requirements prior to submitting your offer, so that you don’t commit to additional costs in what can be an exciting, emotional or heated process.

MULTIPLE OFFERS

In high-demand, low-inventory areas, you may find yourself bidding against other buyers. Some sellers in high-demand niche markets may also intentionally list their home at a low price, hoping to stimulate multiple offers. This doesn’t necessarily mean that the price will be bid up significantly over the asking price, but it does mean that due diligence is required on your part and the part of your agent to ensure that your offer is strategic, competitive and reflective of what you are ultimately willing to pay for the property. Whether you are anticipating competition or not, you should be preapproved for your mortgage prior to your home search, well in advance of submitting an offer. In a multiple-offer situation, this will impact your ability to negotiate successfully, particularly if others making an offer are already preapproved. It also lets you know the maximum you can afford in what may be a stressful situation.

11742 Brookbend Drive | Des Peres, Missouri

The Buyer’s Agent Advantage (continued)

EXECUTION OF COMPETITIVE OFFERS

By leveraging my knowledge of current market conditions and negotiating prowess, I will craft compelling offers that stand out in competitive scenarios. The skillful execution of offers is a cornerstone of my value, providing clients with a distinct advantage in navigating the competitive landscape of real estate transactions.

PRESENTING OFFERS

As your buyer’s agent, I will meticulously structure and articulate offers to resonate with sellers. Presenting offers goes beyond mere numbers, incorporating a nuanced approach that considers the seller’s motivations and priorities. This strategic finesse not only enhances the likelihood of acceptance but also ensures that the terms align favorably with the buyer’s goals.

DOCUMENT & DISCLOSURE REVIEW

Drawing on extensive knowledge and industry standards, scrutinizing every detail of contracts, disclosures, and associated paperwork is a key part of the buying process. This diligent review ensures that buyers are fully informed about the property’s history, potential issues, and the terms of the transaction.

POTENTIAL RESPONSES

Accepted: The deal is complete and, once signed by the seller, the offer becomes a legally binding contract.

Counteroffer: The seller may make changes to your offer, such as adjustments to the price, closing date or conditions. You may accept the counteroffer and close the deal by signing the document. Or, you may make another counteroffer back to the seller.

Rejected: The seller may choose to reject the offer and the sale will not go through.

OFFER ACCEPTANCE

Once both parties come to an agreement, negotiations conclude, and you move on to the next steps in the buying process. You will have a set period of time in which to satisfy the legal conditions agreed to in your contract, such as completing a satisfactory home-inspection report or securing financing.

MANAGING THE ESCROW PROCESS

I collaborate closely with our in-house title manager to navigate the intricacies of the escrow process. From coordinating inspections to managing timelines and ensuring all necessary documentation is in order, our integrated approach streamlines the escrow process for clients.

The Buyer’s Agent Advantage (continued)

INSPECTION & CONTINGENCY PROCESS

I have a dedication to guiding you through property inspections, helping you interpret findings and navigate potential contingencies. Additionally, I work diligently to coordinate inspections, ensuring a comprehensive evaluation of the property.

PROFESSIONAL INSPECTION

Your Dielmann Sotheby’s International Realty agent can guide you through the inspection process. You will want to hire a licensed inspector to conduct a general inspection on your home. Should the home include a septic system, well, pool or any other specialized system, an additional inspection might be suggested. The inspector will provide a written report for you to review. Upon review, you’ll work with your Dielmann Sotheby’s International Realty agent to compile an inspection response of concerns you would like investigated further or remedied.

VENDOR RELATIONSHIPS

Leveraging an extensive network of trusted vendors, including inspectors, contractors, and service providers is a key facet in delivering a seamless experience. Whether coordinating inspections, addressing repairs, or managing other aspects of the buying process, I will tap into these established connections to ensure quality, reliability, and timely services are made.

APPRAISAL

If you will have a mortgage attached to the purchase of your new home, an appraisal will be required. The appraisal will be ordered by the mortgage company and handled directly with you, the Buyer. It is the expectation that the appraised value be at or above the agreed upon purchase price.

CLOSING PROCESS

As your experienced buyer agent, I bring a wealth of expertise to this final stage of the process, ensuring a seamless transition to property ownership. From coordinating with all involved parties to reviewing the closing documentation, I navigate the intricacies of the process with precision and attention to every detail.

MOVING PROCESS

The work doesn’t stop at the closing table. I will provide invaluable support and resources to facilitate a smooth move. Connecting clients with reliable moving services, helping coordinate logistics, and even offering insights into local resources is all a part of the buying process.

A LIFELONG RELATIONSHIP

My commitment to exceptional service doesn’t conclude at the final paperwork; instead, it evolves into a lasting partnership. I understand that your real estate needs may change over time, and as your buyer’s agent I am here to support you in your evolving journey.

Determine needs & priorities

Discuss financing options

Review Agency & Representation

Finalize Mutual Agreement

Initial Consultation Find

Sales Associate shows properties based on your criteria

Evaluate each property

Inspections

Manage vendors

Review Market Comps

Negotiation of terms & possible counter-offers

Agreed-upon sales contract with Seller

Present offer to Seller’s Agent and/ or Seller

Review property disclosures and preliminary title report

Prepare earnest money deposit

Appraisal Final Loan Approval

Final walk-through

Recording of Title

Receive keys

Closing Congratulations!

HOMEBUYING TIMELINE

Homebuying Timeline

Even if you have bought or sold in the past, the real estate process can be confusing. This chart will help you better understand the steps involved in your real estate transaction. As your representative, it is my duty to seamlessly integrate the steps and ensure that you are kept informed throughout the entire process.

Even if you have bought or sold in the past, the real estate process can be confusing. This chart will help you better understand the steps involved in your real estate transaction. As your representative, it is my duty to seamlessly integrate the steps and ensure that you are kept informed throughout the entire process.

Home Buying Factors to Consider

DEFINE YOUR BUDGET, NEEDS & GOALS

Prior to meeting with your real estate agent and any financial professionals, it is important to Clarify your specific needs, your budget and your personal preferences — including any anticipated changes in your life. All of them will impact the purchase of your home.

SECURE YOUR FINANCING

Before starting your home search, it is important to evaluate your financial situation, confirm your budget, familiarize yourself with mortgage options and secure preapproval from a lender. This will help you conduct your search with confidence and negotiate for your desired home successfully. Your Dielmann Sotheby’s International Realty agent can connect you to qualified professionals to get your loan processed efficiently and effectively.

YOUR CREDIT IS IMPORTANT

Your credit report plays an important role in your mortgage approval process and in determining the interest rate and other loan terms that a lender offers you. Before contacting a potential lender, you may wish to confirm your credit rating, so that you have time to resolve any issues.

THE THREE CREDIT BUREAUS ARE:

TransUnion: 800-616-8800, transunion.com

Equifax: 800-685-5000, equifax.com

Experian: 888-397-3742, experian.com

GET WRITTEN PREAPPROVAL

In markets where there is a high demand for the type of home you wish to purchase, written preapproval is essential — and could give you the competitive edge. For example, in a scenario where a seller receives two similar offers — one accompanied by a letter that confirms financing preapproval, and one not — the former offer is often considered first.

BENEFITS OF PRE-APPROVAL

Getting a pre-approval letter is crucial when you’re searching for a home. It provides a clear understanding of your budget and financial readiness by having a lender review your credit, income, and debt to determine your maximum eligible loan amount.

This not only saves time by narrowing down homes within your budget but also makes you a more attractive buyer to sellers, streamlining the transaction process. With a pre-approval letter, you have enhanced negotiating power, especially in a competitive market.

Overall, it’s an essential step in your homebuying journey, simplifying your search, boosting your confidence, and increasing your chances of securing your desired property on favorable terms. To expedite the pre-approval process, gather and organize all your financial documents, such as pay stubs, bank statements, and tax returns, in advance.

UNDERSTANDING YOUR REAL ESTATE GOALS

Clarifying your real estate goals and home buying needs is essential for developing a strategy to successfully make a home purchase. Individual preferences and priorities can greatly influence the weight given to each factor. Some people prioritize a short commute, while others focus on school quality or neighborhood amenities. It’s essential for individuals to assess their own needs, create a list of priorities, and carefully evaluate potential homes based on these factors.

LOCATION

• Proximity to work, schools, and public transportation.

• Safety and crime rates in the neighborhood.

• Access to amenities such as parks, shopping centers, and healthcare facilities.

AFFORDABILITY

• Overall costs of living in the area.

• Property prices and rental rates.

• Property taxes and utility costs.

SCHOOLS

• Quality of local schools and educational institutions.

• Proximity to well-rated schools.

COMMUNITY AND LIFESTYLE

• Sense of community and neighborhood culture.

• Entertainment options, restaurants, and cultural activities.

• Outdoor recreation and parks.

PROPERTY FEATURES

• Size and layout of home.

• Condition of the property, including necessary repairs.

• Amenities such as a backyard, garage, or swimming pool.

FUTURE GROWTH AND DEVELOPMENT

• Ongoing or planned development in the area.

• Economic stability and jobs.

COMMUTE

• Commute time to work and daily destinations.

• Public transportation options.

• Traffic pattern and congestion.

SAFETY

• Crime rates and overall safety of the neighborhood. Please check website for crime rate and safety of the neighborhood

• Neighborhood watch programs.

HEALTHCARE SERVICES

• Access to hospitals, clinics, and healthcare providers.

• Availability of pharmacies and emergency services.

JOB OPPORTUNITIES

• Availability of job opportunities.

•Diverse economy

RESALE VALUE

• Potential for property appreciation and resale value.

• Historical property value trends in the neighborhood.

Glossary of Real Estate Terms

APR The interest charged for borrowing that represents the actual yearly cost of the loan, expressed as a percentage. It reflects the interest rate of the loan plus fees paid to obtain the loan.

CLOSING DISCLOSURE A 5 page summary statement setting forth a borrower’s final mortgage loan terms and closing costs, including loan term, monthly payments, etc. Must be delivered at least 3 business days before closing.

CONFORMING LOANS Mortgages that conform with the criteria set by the Federal Housing Finance Agency for purchase by either Fannie Mae or Freddie Mac.

CONVENTIONAL LOAN Loans eligible for purchase by Fannie Mae & Freddie Mac, sometimes called Conforming Loans.

DODD-FRANK A series of federal regulations passed to prevent future financial crises. It established new government agencies and was designed to protect consumers and tax payers from egregious practices like predatory lending.

EARNEST MONEY A sum of money given to bind an agreement or an offer made to show good faith.

EASEMENT The right, privilege, or interest of one party on the land of another.

EQUITY The interest one has in real property as an owner above all existing indebtedness.

ESCROW A depository for papers, funds, and instructions with a third party who is then obligated to carry out all instructions, providing they are in complete agreement.

FANNIE MAE The Federal National Mortgage Association (FNMA), whose primary function is to buy and sell FHA and VA mortgages in the secondary market for mortgage loans.

FHA LOAN Federal Housing Administration loans are insured by the federal government. Interest rates can be lower than for conventional loans, but the real advantage lies in the low down payment requirement, usually under 5%.

FIXED-RATE MORTGAGE Interest rate and monthly payments remain the same for the entire term of the loan.

GENERAL WARRANTY DEED A deed in which the grantor certifies that the title conveyed is free of defects which may have arisen before or during the time he owned the property.

GIFT LETTER

A letter prepared for the mortgagee which verifies that the sums of money being used as down payment were a gift from a relative, made without obligation of repayment.

HOMEOWNER’S ASSOCIATION An association formed to promote the common welfare of all homeowners in the same subdivision; e.g. a condominium building.

JUMBO LOAN Any mortgage loan amount over $766,550 in Missouri (2023) also called Non-Conforming Loans.

LEGAL DESCRIPTION A description of property that can be recognized by law and by which the property in question can be definitely located by reference to recorded maps.

LISTING AGREEMENT An agreement between a real estate broker and the owner of the property which authorizes the broker to assist in the sale of the property, by advertising it and showing it to prospective buyers.

LOAN COMMITMENT An Agreement by a lender to lend a borrower a specified sum of money on certain specified terms listed thereon.

LOAN ESTIMATE A summary statement that provides important information to borrower’s within 3 days of application, including interest rate, monthly payment, and closing cost for the mortgage loan.

MARKET PRICE

The price a property should bring based on comparable sales of similar properties within recent months.

MORTGAGEE The lender in a mortgage agreement.

MORTGAGOR One who makes a mortgage; the borrower.

NON-CONFORMING LOANS Mortgages that do not meet Fannie Mae or Freddie Mac’s criteria for purchase. These are commonly referred to as jumbo loans.

PERSONAL PROPERTY Moveable property not permanently affixed to land or buildings.

POINTS Loan discounts collected by mortgage lenders as a means of increasing their yield on real estate loans. A point is 1% of the amount of the mortgage.

PRE-APPROVAL LETTER A document from a lender stating that the lender is willing to lend a certain amount of money to a borrower based on certain information received. Typically these are not binding.

PREPAYMENT CLAUSE Provision allowing loan payments to be larger than the amount specified in the note.

PRIVATE MORTGAGE INSURANCE (PMI) An insurance premium charged by a lender to buyers with less than 20% down payment. PMI insures lender in the event that buyer should default on the loan.

PRORATION To divide proportionately among the parties involved, based on a fixed date of computations, their share of an obligation paid or due; e.g.,taxes, water, sewer, rents.

REAL PROPERTY Land itself, the improvements thereon, and the rights, title, and interest one has in it.

Glossary of Real Estate Terms (continued)

RESPA Acronym of the Real Estate Settlement Procedures Act, federal legislation passed to regulate disclosure of the buyer’s settlement costs.

RIGHT OF SURVIVORSHIP The right to acquire the interest of a deceased joint owner; distinguishing feature of a joint tenancy.

SURVEY The process by which a parcel of land is measured and its area is ascertained.

TITLE INSURANCE Insurance written by a title company to protect property owner against loss if title proves unsound.

TRANSFER TAX The tax required by a governmental agency when real property is transferred from one party to another.

TRID An acronym that stands for TILA-RESPA Integrated Disclosures. This is a federal consumer protectionlaw that requires lenders to disclose certain types of key information to borrowers.

USDA Purchase and guaranty by the US Department of Agriculture (Property must be located in a qualifying rural area).

VA LOAN Mortgages eligible for purchase and guarantee by the Veterans Administration (For qualflying veterans only).

VARIABLE RATE LOAN A loan in which the interest rate rises or falls according to an indicator of market interest such as the prime lending rate.

VARIANCE A permit exempting an owner from a particular zoning ordi nance. The owner of the property must prove exceptional circumstances or hardship to justify the exemption.

ZONING A method of regulating the use of real estate by dividing a county or municipality into zones or zoning districts, and then designating the purposes for which land in each zone or zoning district may be used.

In summary, having buyer representation is like having a trusted ally in the complex journey of purchasing a home. Their knowledge, negotiation skills, and commitment to your best interests make the entire process smoother and more successful. When making one of the most significant financial decisions of your life, having a dedicated professional on your side is a wise investment.

A TRULY FULFILLING LIFE STARTS WITH A HOME THAT INSPIRES YOU.