Buyer Book 8-22 CD

BUYER HANDBOOK

BUYING YOUR HOME

Welcome to one of the best home buying experiences in your life!

The Susan Greer Group is dedicated to professionalism from start to finish of the home ownership process. What this means to you is that we will be right by your side, every step of the way, helping you negotiate and close on the home that makes you happy.

Granted, there are many Realtors out there who could help you. But there is one thing that makes us different from the rest. The one thing that causes our satisfied clients to tell their friends about us.

That one thing is care. We care about you. We care about your trust. We care about communication and details. Crossing t’s and dotting i’s. We care about how you feel about our service, our expertise, our guidance and whether you would recommend us. We care about our relationship with you.

Whatever you need throughout the home buying process - whether it’s information, an opinion, a referral for a lender or a mover or a listening ear - the Susan Greer Group is here for you.

THE HOME BUYING PROCESS

PURCHASING A NEW HOME CAN BE BOTH EXCITING AND STRESSFUL. WE ARE HERE TO HELP YOU. THE PROCESS IT OUTLINED FOR YOU BELOW:

• Select your Realtor - Sign a Buyer Representation Agreement. This agreement assures you that the agent is representing your best interests. “Information About Brokerage Services” will explain representation laws in Texas.

• Identify your needs - Establish your must-haves and your want-to-haves.

• Obtain your loan pre-approval - Choose a lender that is knowledgeable and will help you understand your options. Lender credit inquiries within a 30-day period will have minimal effect on your credit score.

• Property Search - We will help you search for properties that meet your criteria, keeping you updated as new listings become available.

• Purchase Offer - We will provide you with a Market Analysis to determine the Fair Market Value of the house you wish to purchase. Based on that analysis, current market conditions and other variables, we will determine together the purchase offer to make.

THE HOME BUYING PROCESS CONT.

• Contract Negotiations - Many aspects of the contract, other than the sales price, are negotiableincluding closing date, earnest money, option fee/period, possession date and any seller contribution. We will help you navigate the process.

• Earnest money - You will provide an earnest money check to the title company and they will deposit it into their account.

• Inspections and the Option Period - You will purchase an option period from the seller (usually ten days for $150-$500, depending on the price of the property and other factors) in which to conduct inspections. Based on the inspection reports, we will negotiate repairs. You may hire an inspector of your choice. We may also negotiate to have the seller purchase on your behalf a oneyear home warranty.

• Appraisal - An appraisal will be required by the lender. If the house does not appraise for full contract value, the lender may decline the mortgage.

• Title Commitment - The Owner’s Title Insurance Policy will ensure that the title to the property is clear as of the closing date. Your lender will also require its own title insurance policy.

• Property Survey - A survey is a drawing that outlines the exact boundaries of a property, as well as the dimensions and location of the home’s structures, easements, or additions located on the premises. The title company orders this according to the contract terms.

• Homeowner’s Insurance - To be approved for your loan, you will need to have your homeowner’s insurance in place. Note for hurricane season - insurance companies will not bind policies in this area when there is a named storm in the Gulf of Mexico!

• Utilities - Arrangements should be made for the transfer of all utilities at least a week before closing. Schedule for them to be turned on the day of closing.

• Loan approval - It is imperative to remember that “time is of the essence” in terms of the loan process! By the time the contract is executed, you should have chosen your lender. It is important to provide all requested information and documents as soon as possible.

• Final walk-through - We recommend a final walk-through of the property 24-48 hours prior to closing to make sure that all repairs have been completed to your satisfaction and that the house is in proper condition for move-in.

• Closing and funding - You will sign all the documents required for the home purchase at the title company’s office. Please keep in mind that you cannot take possession until the transaction has closed AND funded.

COSTS TO EXPECT WHEN PURCHASING YOUR HOME

EARNEST MONEY

• Customarily 1% of the Sales Price (negotiable)

• The Earnest Money MUST be received by the title company within 3 days of the effective date of the Contract.

• Earnest Money will be credited back to you at closing.

OPTION MONEY

• Usually ranges from $200 to $500 (negotiable)

• The Option Fee must be paid to the title company within 3 days of the effective date of the contract.

INSPECTION FEES

• Ranges from $400 to $1,000 or even more depending on the scope of the Inspection and the Inspector chosen.

• The fees are paid directly to the Inspection Company of your choice.

APPRAISAL FEE

• Usually ranges from $495 to $700 and the cost is dependent upon square footage, loan program and location.

• The Appraisal is ordered by the Lender and is paid for by the Buyer at the time the order is placed.

SURVEY FEE

• Negotiable between Buyer and Seller, the survey cost usually ranges from $450 to $650

• It is ordered by the Title Company and billed at the time of Closing.

MORTGAGE COSTS

• The cost of your loan must be provided by the mortgage company along with the loan estimate.

USEFUL WEBSITES FOR COMMUNITY INFORMATION

DEMOGRAPHIC INFORMATION

• For Demographic Information about the various cities in the areacensus.gov/quickfacts

SCHOOLS IN THE AREA

• Helpful websites to learn about the Schools in the area:

• schooldigger.com

• greatschools.org

• You may also check the Houston Association of Realtors school information by clicking on School Finder at www.HAR.com

CITY INFORMATION

• Relocation Essentials has all kinds of really great information about cost of living, crime and schools - http://www.relocationessentials.com/default.aspx

• Houston - houstontx.gov

• Sugar Land - sugarlandtx.gov

• Missouri City - missouricitytx.gov

• Katy - ci.katy.tx.us

• Pearland - pearlandtx.gov

• Richmond - richmondtx.gov

CRIME STATISTICS

• raidsonline.com

SEX OFFENDER REGISTRY

• familywatchdog.us

RESOURCES

In addition to any relationships you already have, the following have been good resources for our clients in the past.

MORTGAGE LENDERS

INSURANCE

As a convenience to our clients, this list of service providers for the areas identified is offered to assist in dealing with various aspects of your real estate transaction. It is not a list of every area in which you may need assistance. It is not intended to be an all-inclusive list of available providers to assist you in the areas listed. Neither BHGREGG nor your agent recommends or endorses any particular service provider listed, nor do they warrant the services or quality of services of any service provider listed above. Neither BHGREGG, nor your agent has received compensation from any service provider listed to be included on the list or for your use of them. For transactions in which BHGREGG or one of its agents represent you, you may select the service provider of your own choosing and are not limited to the service providers on this list. You are advised to investigate any service provider, whether or not on this list, prior to hiring them or engaging their services and make your own decision on their ability to render services on your behalf. In no way does your use of one of the service providers listed herein constitute any retention of that provider by BHGREGG or your agent.

LOAN PROCESS CREDIT DON’TS

1. Don’t do anything that will cause a red flag to be raised by the scoring system. This includes a new credit or changing name/address with the bureaus, as the least amount of reported activity is best.

2. Don’t apply for new credit of any kind. This includes “You have been pre-approved” credit card invitations. Also, don’t co-sign for any loans!

3. Don’t pay off collections or charge-offs during the loan process. Unless you can negotiate a delete letter, paying collections will decrease the score immediately due to the date of the last activity becoming recent.

4. Don’t max out or over-charge your credit card accounts. Try to keep your credit card balances below 30% of their available limit at ALL times during the loan process.

5. Don’t consolidate your debt. When you consolidate all of your debt onto one card, it appears that you are maxed out on that card and the system will penalize you.

6. Don’t close credit card accounts. If you close a credit card account, you will lose available credit and it will appear in the FICO system that your debt ratio has gone up.

7. Don’t allow any accounts to run past due - even 1 day! Most cards offer a grace period but what they don’t mention is that once the due date passes, that account will show a past due on your credit report. Past due balances can drop scores by 50+ points.

8. Don’t dispute anything on your credit report. When the underwriters see items in dispute, they will not process the loan until the note is removed and new credit scores are pulled. Credit scoring software will not consider items in dispute in the credit score, giving false data to the lender.

9.Don’t make any large purchases OR any large deposits into your checking or savings account. If you do, you should be prepared to explain and document.

10. Don’t lose contact with your mortgage and real estate professionals. Before you take a specific action that may affect your credit report or scores, call them for advice.

11. And finally, Don’t quit or change your job without consulting your lender!

If you have concerns about your credit score, let us know. Our preferred lenders can offer you expert advice!

DOCUMENT REQUIREMENTS FOR LOAN APPROVAL

REQUIRED FOR ALL LOANS:

• Pay stubs for the most recent 30-day period

• W-2 forms or Tax Returns for the previous 2 years

• Information on any other income you wish to have considered such as part-time income, rental income, or alimony

• Previous 2 months’ bank statements for checking and savings accounts (all pages)

• Most recent statement on all CDs, stocks, 401k, etc. (all pages)

• Homeowner’s insurance information

• Copy of driver’s licenses and social security cards for all borrowers and non-purchasing spouse (US Patriot’s Act)

• All lending disclosures signed

IF APPLICABLE:

• Name and number of landlord(s) for the past two years

• For VA loans: DD214 and certificate of eligibility

• Certified copy of closing statement for sale of current home

• Bankruptcy documents (entire)

• Divorce decree (entire)

SELF-EMPLOYED OR COMMISSIONED BUYERS

• Previous 2 years’ signed tax returns with all schedules attached

• Previous 2 years’ corporate/partnership tax returns

• Year-to-date profit and loss statement and balance sheet signed by accountant

CORPORATE RELOCATION & RELOCATION BUYERS

• Copy of company’s relocation policy

• Letter from employer stating effective date of transfer and new income

• Copy of entire relocation buyout offer, if applicable

• Letter of intent to accept above buyout offer prior to its expiration

• Estimate of equity or equity advance

HOMEOWNER’S INSURANCE

Not all policies are alike, and it’s important to remember that coverage limits and deductibles may apply. Typical policies include four key types of protection.

DWELLING COVERAGE

Some of the risks that are typically covered include: • Fire & smoke • Wind • Lightning strikes • Hail

PERSONAL PROPERTY COVERAGE

Protected personal property may include: • Furniture • Electronics • Clothing

OTHER STRUCTURES COVERAGE

This coverage may extend to items such as: • A shed • A detached garage • A fence

LIABILITY COVERAGE

Liability protection may cover: • A guest’s medical bills • Your legal expenses if sued

• An injured party’s lost wages

• Costs of repairing damage accidentally caused to someone else’s property

FACTORS IMPACTING COST OF INSURANCE

Factors that impact the cost of insurance include:

• Roof

• Age of home • Deductible • Security System • Frequency of claims • Credit Score • Replacement Cost

FLOOD INSURANCE

If your home falls in a high-risk flood area and you carry a mortgage from a federally regulated or insured lender, your lender is legally mandated to require flood insurance on your property.

Standard homeowner’s insurance policies do not cover flood. We highly recommend that you consider flood insurance even if you live outside a high-risk flood zone and are not required to purchase it.

Flood zones are areas where there is a higher statistical probability of a flood occurring, but that doesn’t mean floods don’t occur elsewhere. In fact, over recent years in Texas, a number of floods exceeded the statistical probability, putting more homes and properties in harm’s way than were expected.

Flood insurance can protect you from the catastrophic financial impact of flooding. Just a few inches of water can mean thousands of dollars of loss to your home or business.

If it is too risky for insurance companies to include flood coverage in their standard homeowner’s policies, can you risk NOT having it?

INSPECTIONS

THE PURPOSE OF INSPECTIONS

The home inspection is important to determine if there are any serious issues with the house that affect the safety or the ability to live comfortably in the house. The report is intended to provide an understanding of the conditions in a home that are defective and need immediate attention or are anticipated to lead to a deterioration of the home.

CHOOSING AN INSPECTOR

It is important that your inspector be an expert at evaluating the condition of the house and discerning which issues are really important to the livability of the home. The choice of which inspector to use is yours! Inspection fees can vary widely. If you do not currently have a relationship with an inspector, a couple to consider are:

As a convenience to our clients, this list of service providers for the areas identified is offered to assist in dealing with various aspects of your real estate transaction. It is not a list of every area in which you may need assistance. It is not intended to be an allinclusive list of available providers to assist you in the areas listed. Neither BHGREGG nor your agent recommends or endorses any particular service provider listed, nor do they warrant the services or quality of services of any service provider listed above. Neither BHGREGG, nor your agent has received compensation from any service provider listed to be included on the list or for your use of them. For transactions in which BHGREGG or one of its agents represents you, you may select the service provider of your own choosing and are not limited to the service providers on this list. You are advised to investigate any service provider, whether or not on this list, prior to hiring them or engaging their services and make your own decision on their ability to render services on your behalf. In no way does your use of one of the service providers listed herein constitute any retention of that provider by BHGREGG or your agent.

If you suspect that there are structural or foundation issues, you should seek the advice of a structural engineer.

NEGOTIATIONS

We will assist you with objectively evaluating your offer and guide you through the negotiation process. The initial contract is only the start of a process that involves:

• Appraisals

• Inspections

• Financing

• And many other potential obstacles.

There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often inclusion or exclusion of repairs and furnishings or equipment. We will advise you on how to arrange for these, and help negotiate this complicated process.

IMPORTANT INFORMATION ABOUT NEGOTIATIONS

Under Texas law, real estate contracts must be in writing to be legally binding. No oral agreement holds validity unless it is reduced to writing and agreed upon and signed by all parties.

Important Points

• When only the buyer signs a “Residential Contract”, it is called an “Offer” and it is not a binding agreement.

• It is possible that there are several sets of negotiations occurring at the same time on the property. The agents involved in these negotiations may or may not be aware of other negotiations.

• Under Texas law, licensed real estate agents are required to submit ALL Offers until an agreement is fully executed in writing by all parties. In a case where multiple offers are received on one property, this requirement can and often does create misunderstandings on behalf of those offering to purchase.

• A VERBAL ACCEPTANCE is not binding. Even though a seller may verbally indicate acceptance of one of the Offers he is NOT LEGALLY BOUND to live up to his verbal agreement. A seller may accept an Offer verbally only to receive a better Offer before he signs the verbally-accepted Offer. In that case, he can legally renege on a verbally-accepted Offer and sign the other Offer.

• A licensed real estate agent representing a buyer cannot control negotiations of the seller, with exceptions of making requests to the seller’s agent to get the contract signed by the seller in a timely manner.

• It is always best to negotiate in writing.

This information is not intended to be legal advice. Your real estate agent cannot give you legal advice. Please consult an attorney if you have questions about your legal rights and obligations.

TITLE INSURANCE

Owner’s Title Insurance, called an Owner’s Policy, is usually issued in the amount of the real estate purchase. It is purchased for a one-time fee at closing and lasts for as long as you or your heirs have an interest in the property. Only an Owner’s Policy fully protects the buyer should a covered title problem arise with the title that was not found during the title search. Possible hidden title problems can include:

• Errors or omissions in deeds

• Mistakes in examining records

• Forgery

• Undisclosed heirs

An Owner’s Policy provides assurance that your title company will stand behind youmonetarily and with legal defense if needed - if a covered title problem arises after you buy your home. The bottom line is that your title company will be there to help pay valid claims and cover the costs of defending an attack on your title.

About Boundary Coverage - The optional additional insurance covers the general title policy’s exception of coverage (meaning these items are not covered) or “any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements” - basically, mistakes in the survey. With purchase of the additional coverage, the title company is insuring the boundary lines.

The cost of the coverage is 5% of the residential owner’s title policy.

With an owner’s title insurance policy, you are protected from past title defects that could jeopardize your claim to title.

CLOSING THE TRANSACTION

There are many questions that can arise between the initial sales agreement and the closing, including those related to lenders, repairs, appraisals, insurance and moving out. We will help you navigate through this process!

Remember to bring the following items to the closing:

• Valid driver’s license or passport (it MUST be a picture ID)

• A second form of ID (does not have to have photo)

• A cashier’s check made out to the title company to cover down payment and closing costs (a wire is actually preferable)

• A blank personal check (just in case)

OUR PLEDGE TO YOU

• We will keep our word.

• We will say what we do and do what we say.

• We will listen to you.

• We will keep you informed at all times.

• We will be mindful of your time, because we know time is precious.

• We will be your advocate, your cheerleader, your ally, your partner.

• We will deliver the most extraordinary service experience possible.

From our earliest days in Houston, we have remained brokerage leaders in the real estate industry by developing relationships with our clients and our communities. The Better Homes and Gardens® Real Estate brand was built upon a passion for the home. Sellers benefit from this well known brand through the exposure generated by millions of home searches on their website and the inherent trust of the iconic brand.

WHAT OUR CLIENTS SAY ABOUT US

Susan Greer and her team are supreme in customer service and professionalism. This was our first home-selling experience, and we could not have been in better hands. They were professional, communicative, researched and informative – especially since we were new tothe process and despite the public health emergency. They took a normally stressful situation and made it worry-free! ~ Joanna C

Susan and her team are very professional and place the client’s interests first. I would highly recommend Susan to friends and family and we wouldn’t hesitate to work with her again. ~ Donna G

Very professional and organized. With their help in negotiations we bought below market and sold above market. ~ Rick R

The wisdom and guidance we received from them beginning day one and through the final sale were second to none, especially given the fact that we were trying to sell this house from out of town. ~ Paul O

They were a delight to work with and made the entire process enjoyable!

We had an absolutely wonderful experience with Susan Greer and Courtney Bass in selling our home. The commitment to detail, the level of communication, and the sheer professionalism shown during the entire process was impeccable. No matter the issue that came up, Courtney rose to the occasion! She was incredibly supportive and handled each issue with the confidence that comes with experience. As a result, from the beginning to the end of the process we couldn’t have been more satisfied. Susan and her team are FANTASTIC! ~ Terri P

If you want your home to sell in a weekend – call Susan Greer! ~ Dana D

Susan is hands down the most professional, knowledgeable, patient, enthusiastic and all-around JOY to work with! I have owned quite a few homes in my day, and no one compares with the level of service and professionalism Susan and her team provided. ~ Mary M

I chose Susan Greer because of her extensiveexperience and I have now seen this in action!

Courtney was a great help throughout the process. She kept me informed and responded to my questions very diligently. She negotiated hard on my behalf and knew the game plan from get-go. ~ Danish M

This is my second time using Susan and Courtney to sell my property. It was tough market for sellers with so many new and existing houses in the market. Susan’s team helped me to negotiate the best value. I will highly recommend this A-team. ~ Johnny J

Courtney always kept us informed about our house. She is very professional and listens to what you have to say. She is a good negotiator and tries to get top dollar for your house. I would rate her a ten. ~ Roger T

COURTNEY BASS

Having been born and raised in Sugar Land, Courtney Bass, REALTOR®, knows the Houston area and has watched Fort Bend County grow and change over the years. After a successful career in the hospitality industry, she became interested in real estate during her own experiences buying and selling homes when she recognized that she had a real knack for it.

Courtney now applies her outstanding customer service skills to the real estate industry. In addition to her people skills, Courtney’s special expertise lies in knowing just how to show off each home at its best. A seasoned expert at both contract negotiations and repair negotiations, Courtney is the one to have on your side!

courtney@susangreergroup.com

C: 281.896.5969

O: 281.980.5050

W: SusanGreerGroup.com 2323 Town Center Drive Sugar Land,Texas 77478

“Stressed about selling your home? Don’t be, I’ve got this.”

KATHY THOMPSON

A native Houston area Texan, Kathy Thompson, REALTOR®, has lived in Fort Bend County for 30 years and dedicated 26 of those years to helping the people in the Houston metropolitan area, buy and sell their homes. As a Graduate of the REALTOR® Institute (GRI), a Certified Buyer Representative (CBR), and a Master Certified Negotiation Expert (MCNE), Kathy has actively applied her knowledge and skills garnered over the years to the benefit of her numerous clients. A consistent multi-million-dollar producer, Kathy’s success is fueled by the way she keeps her clients’ needs foremost, and treats her clients as she would her own family. She loves the satisfaction of helping people she really cares about with something as personal and important as their home.

Beyond real estate, Kathy is very active with committee work for her church home at First United Methodist Church. She also volunteers with the Houston Livestock Show and Rodeo, the CASA Home Tour, the Quail Valley Garden Club Home Tour and the Missouri City Exchange Club.

Conscientious and attentive to details and deadlines, Kathy enjoys offering advice and helping folks make the home buying/selling process go as smoothly and efficiently as possible.

kathy@susangreergroup.com

C: 713.203.3760

O: 281.980.5050

W: SusanGreerGroup.com 2323 Town Center Drive Sugar Land,Texas 77478

“Be a great problem solver, but be a better problem preventer!”

LYNDA MARTIN

Lynda Martin came back to her Texas roots after more than 20 years as a Television and Radio news anchor and as a public relations and communications consultant for private and public organizations. She has moved 21 times across the country and London and understands the importance of feeling comfortable in a new home. Her attention to detail and experience working under pressure make her a perfect fit for real estate!

Lynda says it has been wonderful being back in Houston and seeing all the changes! While she loves scouring the neighborhoods and checking out all of the homes on the market, it is really all about the people!

She has been a Board Member of both the Leukemia and Lymphoma Society and the Make a Wish Foundation as well as a Volunteer for the Special Olympics. Lynda has a twin brother with Autism and was actively involved with the National Foundation for Autism Research as well.

lynda@susangreergroup.com

C: 619.517.5001

O: 281.980.5050

W: SusanGreerGroup.com 2323 Town Center Drive Sugar Land,Texas 77478

“Real Estate is a natural move for me from broadcasting and I’m most excited about helping to create memorable stories of peo ple making one of the most important decisions of their lives”

CLARI DACHMAN

Clari Dachman, REALTOR®, and her family have lived in every time zone in the continental U.S. over the years, so she knows first-hand the fun and the stress involved in purchasing a home. Licensed in 2019, Clari now takes joy in sharing the knowledge she has acquired with her clients.

Having raised four boys and become heavily involved with the schools they attended (Board of Directors at The Honor Roll School, Committee Chair for fundraising at Strake Jesuit College Preparatory School, among others), she has mastered the ability to be flexible and at the ready when the course changes. She is a devoted runner, avid traveler and speaks Spanish fluently.

Clari learned the importance of hard work, commitment, sacrifice and teamwork from her parents and is driven to provide her clients with the best service experience possible.

clari@susangreergroup.com

C: 281.658.1158

O: 281.980.5050

W: SusanGreerGroup.com 2323 Town Center Drive Sugar Land,Texas 77478

“Life is an occasion – rise to it!”

RICK GREER

Rick Greer is an enthusiastic and dedicated REALTOR® with a true commitment to his clients. After 20+ years living in Sugar Land and after decades of land management for the oil and gas industry, he joined his wife’s successful real estate team and the rest is history!

With a straightforward style of doing business, Rick is an expert in contract negotiations with a gift for bringing parties together to reach a common goal. From the inception of the first meeting to closing the transaction, Rick’s clients receive his full dedication as he is driven to make their real estate experience a joyous one.

A born networker who makes a point of being “in the know”, Rick is well-liked by all and loves keeping up with his large network of friends. His passions include family, friends, golf, fishing and OU football!

rick@susangreergroup.com C: 713.398.5083

O: 281.980.5050

W: SusanGreerGroup.com 2323 Town Center Drive Sugar Land,Texas 77478

“After years in the Land business, I am finally on the people side of real estate. I love it!”

SUSAN GREER

Susan Greer, Broker Associate, entered the real estate industry after a highly successful career providing marketing research and consulting to Fortune 500 companies. For the past thirteen years, she has been applying her negotiating skills and extensive sales and marketing experience to real estate.

Susan is highly respected for her professional and intense work ethic, integrity and high standard of commitment to excellence. She puts her heart and soul into exceeding the expectations of her clients. Sellers and Buyers trust her. She consistently demonstrates a sincere and genuine ability to listen attentively and accurately assess needs.

Susan’s team has received many accolades for its high performance and is consistently listed as one of the top real estate teams at Better Homes and Gardens Real Estate, Gary Greene, as well as the greater Houston area.

susan@susangreergroup.com

C: 713.320.9597

O: 281.980.5050

W: SusanGreerGroup.com 2323 Town Center Drive Sugar Land,Texas 77478

“What a great job I have! I am in this for my clients and when they are happy, I am filled with joy!”

AFTER THE CONTRACT IS SIGNED

The Earnest Money Contract (EMC) is signed.

The Realtor® Associate will “open title” at the title company named in the Earnest Money Contract, and the title company will deposit the earnest money check. If the amount of the earnest money is greater than $5,000, and will be held for an extended period of time, you may request it be placed in an interest bearing account.

Seller receives Option Fee as per terms of EMC and deposits.

Buyer schedules property inspections and contacts insurance agent, paying close attention to the Option Period, if applicable, as defined in the EMC.

Buyer makes loan application with their selected mortgage lender according to the time specified in the EMC and delivers documentation requested by lender.

The mortgage lender will begin processing the loan by: a. ordering an appraisal of the property; and b. verifying prior loan history, employment and financial position.

Simultaneously with the loan processing, the title company will research the title and send their title commitment to the buyer, seller, Realtor® Associates, attorneys, and mortgage lender.

The title company will act as a neutral 3rd party, escrow agent and title insurer. The escrow agent will coordinate with all entities to receive the following information for closing: a. invoices and loan documents from the buyer’s mortgage lender b. buyer’s hazard insurance from the buyer’s insurance agent c. tax certificates d. survey

Once the buyer’s loan and title are approved, the closing date is coordinated between all parties.

Buyer and seller contact utility companies to transfer service to buyer. Note: the seller does not turn off utilities until the home is sold.

The title company will prepare a closing statement with charges to both buyer and seller, usually available for review the day prior to closing.

Parties sign closing papers and title transfers from the seller to the buyer upon funding.

The above procedure averages approximately 30-45 days. If the buyer’s credit is rejected or he cannot qualify for the payments, the contract is cancelled and the buyer’s earnest money is returned if all parties agree to the release. Contracts may be contingent on inspections and buyer’s ability to qualify for payments. The house must appraise satisfactorily and the title should be clear. Therefore, buyer and seller should not make definite plans until all contingencies have been removed.

HELPFUL TERMS

MORTGAGE TERMS

ADJUSTABLE-RATE MORTGAGE (ARM):

Mortgage loan in which the interest rate of a home may vary at specific intervals during the loan term.

AMORTIZATION: A payment plan by which the borrower gradually reduces the balance of the mortgage by making monthly payments of principal and interest.

CAP: The maximum interest rate on an adjustable rate mortgage that may be charged.

CONVENTIONAL LOAN: Any mortgage loan other than a governmental loan.

FIXED RATE MORTGAGE: Mortgage loan in which the interest rate will not change throughout the duration of the loan.

GOVERNMENTAL LOAN: A mortgage loan guaranteed or insured by a government agency such as the Veteran’s Administration (VA) or the Federal Housing Administration (FHA).

POINT: One percent of the loan amount paid to the lender, usually in exchange for a lower interest rate on the loan.

PRINCIPAL AND INTEREST PAYMENT (P&I): The monthly payment of interest charges and part of the principal loan balance. With taxes and insurance included, this makes up the monthly mortgage payment (PITI).

PRIVATE MORTGAGE INSURANCE (PMI): A policy that protects the lender in the event of default, and insures repayment of the loan in case of the borrower’s death or disability. PMI is generally required if the buyer’s down payment is less than 20 percent of the purchase price or appraised value.

CONTRACT/CLOSING TERMS

APPRAISAL: The opinion of an appraiser in estimating the market value of a home; usually required by a mortgage lender.

ASSESSED VALUE: Estimate of property value by a public tax assessor used as the basis for calculating property tax.

CLOSING: The final step in the sales agreement where property ownership is transferred from seller to buyer.

CLOSING COSTS: Fees and expenses, other than the cost of a property, charged to transfer ownership.

EARNEST MONEY: A down payment the buyer gives the seller up front as a show of good faith, indicating the buyer’s intent to purchase the property.

ESCROW: 1. Arrangement between a buyer and seller to place the down payment and other monies or documents with the third party until the completion of the contract closing.

2. A portion of the monthly mortgage is placed in an escrow account to pay taxes and mortgage insurance.

HOMEOWNERS INSURANCE: Also called hazard insurance, covers physical damage to the property, as well as theft and personal liability. It does not cover flooding; flood insurance must be purchased separately.

INSPECTION: Service performed by an inspector to identify any possible structural or mechanical problems.

LISTING CONTRACT: An agreement between a homeowner and an agent authorizing the agent to offer the owner’s property for sale.

MARKET VALUE: The highest price a buyer would pay and the lowest price a seller would accept.

OPTION: A real estate option is a specially designed contract provision between a buyer and a seller. The seller offers the buyer the option to buy a property by a specified period of time at a fixed price.

SELLER OR OWNER DISCLOSURE: Legal requirement that the seller disclose in writing any known defects or repairs that have been made to the property.

SURVEY: Required by the lender, a process whereby the property is measured and a scaled blueprint of the land and its property lines, structures and easements are drawn.

TITLE: A document that refers to the ownership of a particular piece of property.

TITLE INSURANCE: Policy that protects the holder from any loss resulting from defects in the title.

TITLE SEARCH: Research of public records to identify ownership, liens and encumbrances affecting the property.

REAL ESTATE TERMS

AGENCY: A term used to describe the legal relationship between a seller and a broker, or a buyer and a broker.

AGENT: Term used to describe a real estate salesperson licensed by the state who, under the supervision of a broker, represents a buyer or seller in the purchase or sale of a home.

BROKER: A person licensed by the Texas Real Estate Commission who acts as the fiduciary agent of the seller or buyer in a real estate transaction.

BUYER AGENCY: Agency relationship in which a buyer contracts with a broker to represent the buyer’s interests in real estate transactions.

MULTIPLE LISTING SERVICE® (MLS): A computerized list of all properties for sale by member brokers.

REALTOR®: A licensed agent or broker who is a member of the National Association of Realtors®, through local affiliates such as Houston Association of Realtors. Realtor® membership is voluntary and represents a commitment to the highest levels of professionalism.