KELLER WILLIAMS CAPITAL PROPERTIES
Home Buyer’s Guide
w w w. Ne l l i s Group. c om
Map Of The Families We Have Helped Move Since 2004 Map Courtesy Of Google Maps 2
Dear Friends, I grew up in a military family where service was modeled from childhood. As a result of being relocated with the Navy, our family learned what it was like to transition to a new area, find the right schools, and discover the perfect community in a short period of time. My family channeled our commitment to service and our experience into creating a real estate agency that takes care of each and every one of our clients. Our team’s priority is to “always put the client before the sale”. We call that the Nellis Group Experience. Since 1983, the Nellis Group has been providing this experience to thousands of families and individuals in the D.C. metro area. In that time we have helped over 3,000 families buy or sell their home. We plan to grow and be here another 20 years. Thank you for giving us the opportunity to work with you. Our team looks forward to helping you buy or sell your next home. We hope you enjoy your Nellis Group Experience.
Sincerely,
James Nellis, CEO
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Families Moved
ALEXANDRIA
ARLINGTON
WASHINGTON DC
FAIRFAX COUNTY
LOUDOUN COUNTY
PRINCE WILLIAM COUNTY
Table Of Contents Section I: The Nellis Group Advantage Introduction To The Nellis Group Advantage........................................................................................................06 Mission Statement & History....................................................................................................................................08 Core Values.................................................................................................................................................................09 Future Vision & Experience......................................................................................................................................10 Customer Service & Success......................................................................................................................................11 Dynamic Team Advantage.........................................................................................................................................12 Client Assistance Programs.......................................................................................................................................13 Section II: Starting The Process Introduction To The Process....................................................................................................................................14 Benefits Of A Buyer Specialist.................................................................................................................................16 Becoming A Nellis Group Preferred Buyer............................................................................................................17 Section III: Finding Your Ideal Home Introduction To The 5 Pillars Of Real Estate.........................................................................................................18 Finding Homes Online & Researching The 5 Pillars............................................................................................20 In Home & Community Research...........................................................................................................................21 Section IV: Reserving Your New Home Introduction To The Home Reservation Process...................................................................................................22 Understainding Pricing & Devloping A Reserve Strategy....................................................................................24 Developing An Offer..................................................................................................................................................25 Section V: Negotiations Introduction To Negotiation Stages & Exit Strategies...........................................................................................26 The Initial Stages Of Negotiation.............................................................................................................................28 The Appraisal..............................................................................................................................................................29 Section VI: Closing On Your Home Final Considerations & Tasks...................................................................................................................................32 Closing Costs..............................................................................................................................................................33 Section VII: The Nellis Group Experience Charity Outreach.......................................................................................................................................................36 Nellis Group VIP Client Program............................................................................................................................37 Section VIII: Reference Important Terms........................................................................................................................................................38 Glossary.......................................................................................................................................................................40
THE NELLIS GROUP - A TRUSTED LOCAL BRAND Clear Mission
Deep Community History
Strong Core Values
Proven Track Record
Continued Growth
Real Estate Solutions
Realtor Specialists
Licensed Appraisers
Negotiation Specialists
Contracts Coordinator
Client Care Representative
Feedback Coordinator
Marketing Director
Marketing Specialists
Interior Designer
Local Lenders
Advantage Partners
Online Support Services
WWW.NELLISGROUP.COM/NGADVANTAGE 6
Section I
The Nellis Group Advantage The Nellis Group Advantage is the combination of essential elements that make the Nellis Group one of the top Realtor teams in the D.C. Metro area. We combine a unique set of core values with or long history of serving the local market, to create an effective results driven Real Estate company. We challenge you to compare us to other Realtors in the area and find one that provides as may benefits as the Nellis Group. The following section will discuss the four aspects that join together to form the Nellis Group Advantage.
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A Trusted Local Brand Embodying Real Estate Excellence Since 1983
Mission Statement To Invest In People’s Lives As They Invest In Real Estate
The History Of The Nellis Group The Beginnings: Vicki Nellis started the Nellis Group in 1983 after her husband Jim’s military transfer brought the Nellis family to Northern Virginia. Vicki’s passion for people and her ability to understand the needs of consumers helped her to gain an overwhelming amount of referrals in the community.
Expansion & Growth: As the company grew, Vicki’s husband Jim, her children James and Nicole, and Nicole’s husband Keith joined the family business. A select team of agents and specialists were brought on to help provide clients with the ultimate real estate team experience.
Next Generation: Today, with James Nellis carrying on Vicki’s legacy as the CEO of the Nellis Group, the team has expanded to serve clients in Washington, D.C. and Maryland. With several specialized team members and business divisions, the Nellis Group has grown from an individual Realtor to a dynamic business enterprise.
As our company adapts to the latest real estate trends, we will continue to grow and expand on our practices by carrying on the legacy that Vicki Nellis started in 1983. 8
Core Values Faith Our faith impacts everything that we do as a company. It is the essence that drives our actions and is the impetus for how we conduct ourselves. Every client is viewed as a blessing and we are thankful to be able to serve you.
Leverage We utilize the unique skills of each team member to deliver an educational, inspiring, and smooth transaction. This combination of our knowledge, skills, and proven track record produces a successful real estate experience.
Excellence Our team researches the market, analyzes the latest real estate trends, and adapts to changing conditions in the global real estate world. We seek to exceed the expectations of our clients in pursuit of excellence.
X-Factor Our team is unlike any other real estate company in the area. Each member possesses a unique skill set so our clients know they are going to have a specialist working with them in every phase of the transaction.
Our Core Values Guide Us In Business And Life
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A Vision For The Future As our company adapts to the latest real estate trends, we will continue to grow and expand on our practices by carrying on the legacy that Vicki Nellis started in 1983. With James & Nicole leading the company into the next generation we plan to grow our team and help another 1,000 families move over the next 8 years.
We have assisted over 3,000 families move...
3,000
4,000
...by 2018 our goal is to assist 1,000 more
An Experienced Team The Nellis Group Realtors have over 100 years of combined Real Estate experience...
...The Typical Realtor has just 13 10
Relationships & Customer Service The Nellis Group relies on providing the absolute best customer service both during and after our partnership. That, along with our Real Estate Excellence is why over 84% of our business comes from referrals.
84%
Of Business From Referrals
A Track Record Of Success We close a transaction every
3 Days The Nellis Group helps over 100 families move per year, helping 124 families in 2013..According to the National Association of Realtor Statitstics 2013, the typical Realtor helps just 12 families move per year.
124/Year Typical Realtor
12/Year
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Dynamic Team Advantage
Licensed Appraisers A pricing specialist that performs a Mini-Market Analysis to ensure you are making educated and strategic offers.
A cohesive team of specialists that work together to help bring you the best Real Estate experience possible.
A team of licensed Realtors and community experts that truly know the D.C. metro area’s communities, schools, parks, and transportation.
Contracts Coordinator
Negotiation Specialists
Local Lenders
Analyzes and tracks every date, contingency, and element of the contract in order to ensure a smooth error free transaction.
We promise to be defenders of your equity as we help you get the best price and terms during the transaction.
Our network of local lenders offer our clients a special Lender Advantage Program to help them secure beneficial rates and lower closing costs.
Advantage Contractors
Advantage Services
Online Support Services
Our network of trusted contractors to help with home issues including roofing, flooring, HVAC, windows, electricians, plumbers, & more 12
Realtor Specialists
Our network of local service providers that help with auxiliary issues: attorneys, interior designers, accountants, financial advisors, & more.
Services like Online Transaction Management and E-Signature that streamline the process and add convenience.
Buyer Assistance Programs & Solutions
Specialists with experience dealing with high price points and the intricacies that go along with these transactions.
A program that allows clients to leverage our trusted local lenders to lower closing costs and save money at the time of closing.
Updates and information on buying & selling investment properties in one of our market researched “Top Investment Areas�.
Helping transfers/new hires for local companies experience the local lifestyle and relocate to the best community & home.
Access to our trusted network of contractors and service providers that can help you with auxiliary services.
Specialists and negotiators with specific experience dealing with banks and the complexity of short sale transactions.
Specialists and negotiators with specific experience dealing with banks and the complexity of REO transactions.
Special benefits after closing a transaction including charity donations, special contests & prizes, special events, and more.
Certified MilRES specialists that are specifically trained on all aspects of buying a home for active or retired military.
If you are buying/selling in another area, we set you up with an expert from our trusted national network of experienced Realtors.
If you are looking to buy in the next 6 months to a year, we can set you up with market updates so that you will be prepared once you are ready to sell. 13
George Washington Masonic Temple, Old Town Alexandria, Virginia Become A Nellis Group Preferred Buyer
Enroll In The Nellis Group Preferred Buyer Program
BUYING PROCESS
Home Pre-Selection & Research
Fill Out Buyer Survey
Evaluate Homes Online
Get Pre-Approved Initial Consultation
Neighborhood Research
Door Knocking
Community Drive-By
Visit Homes With Your Nellis Group Realtor Specialist Develop Negotiation Strategy
Make Your Offer
Review Market Analysis
Choose Your Home
Offer Rejected Home Reserved
Negotiate & Counteroffer Inspections & Repair Negotiation
Review Association Documents
Lender Ordered Appraisal
Lock Interest Rate With Lender
Mortgage Approval Exit The Contract
Exit The Contract
Exit The Contract
Three Ways To Walk Away From The Contract
Settlement Day
Home Ownership
Final Inspection Choose A Charity
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Order Utilities
Property Survey
Remove Financial Contingencies
Title Search
Nellis Group VIP Program
Section II Getting Started With The Nellis Group The Nellis Group will help walk you through the entire buying process in order for you to understand what is going on at all times. We have broken it down into simple small steps that all lead up to the eventual goal of having you move in to your new home. The flowchart on the left shows you the big picture of the process. Here’s how you get started with the process.
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Choosing A Buyer Specialist The most important thing you need to do is to choose an experienced Realtor that is going to meet all your needs. A community expert with expertise on the 5 Pillars of Real Estate, a negotiation specialist, and someone that is going to treat you as a partner and not as a transaction.
What Your Buyer Specialist Should Do
A basic buyer specialist... • ...has lots of experience with the buying process, knows the ins & outs of each stage. • ...gets compensation typically paid for by the seller from the net proceeds of the transaction. • ...views over 100 homes per month & knows the homes/communities in the market. • ...understands contracts and has experience negotiating with all other parties. • ...helps you view more homes & close the transaction faster.
An advanced buyer specialist will... • ...be able to assist you with the 5 transactions (Traditional, FSBO, REO, Short Sale, New Home). • ...be an expert on the 5 Pillars of Real Estate (location, communities, schools, convenience, crime). • ...be a negotiation specialist who will work for your interests and get you the best terms.
An ideal buyer specialist will... • ...employ a licensed appraiser as a pricing expert. • ...have a Lender Advantage Program (LAP) to help you get the best financing. • ...have a proven 20+ year history of excellence and a strong set of core values. • ...have buyer assistance programs for clients who need additional services. • ..have business divisions with specific specializations.
We are confident that the Nellis Group is the ideal buyer specialist 16
Becoming A Nellis Group Preferred Buyer The Nellis Group Preferred Buyer agreement is a two way commitment. We commit all our resources to you and you commit to work with the Nellis Group as your exclusive Realtor. We ask that you sign this agreement so we can be assured we are both working diligently to achieve a common goal. The agreement gives you a guarantee that we will be working for you and not the seller.
How To Become A Preferred Buyer
Take our online buyer survey
Why Do You Need To Get Pre-Approved? • Know your estimated monthly payments in advance
Phone interview
• You won’t waste time on homes that you can’t get • Figure out the best loan
Speak to a lender & get pre-approved
package early in the process • Offers are viewed more seriously by sellers
In office consultation
Sign the exclusive right agreement
Our unique Lender Advantage Program gives you access to one of our preferred lenders that will be able to leverage specific intricacies of the lending process to aid in negotiations and to save you the most money possible at time of closing.
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The 5 Pillars Of Real Estate
The 5 key factors that will determine the resale value of your investment. Location
Schools
Communities
Crime
Convenience
Unfortunately for home buyers, they will never be able to have all 5 pillars at an ideal level. Instead, each of these factors has a give and take effect on the other. For example if you want to be convenient to the metro, you may have to lower your expectation of schools or crime. If you want to have the best schools or nicest community, you may have to sacrifice your ideal location.
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Section III Finding Your Ideal Home
Now we are all set to start doing neighborhood research and eventually going out and seeing homes. Research is an important part of the process and is a combination effort by you and your Realtor Specialist. During this process the focus is to balance out the 5 Pillars of Real Estate.
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Nellis Group Premium Online Search A program designed to make sure you are seeing the full potential of homes that are on the market. This is in case there is a 2nd sentence that we want to add to this part.
Search for homes online with special NG tools Sources: The Nellis Group Premium Home Search
Receive updates on new homes on the market Sources: The Nellis Group Premium Home Search
Online Community Research Use different online sources to research how each of the 5 Pillars of Real Estate will factor into your decision making. You can’t have it all, so you need to find a good balance that fits your life. 5 P I L A R S O F R E A L E S T A T E 20
LOCATION
View traffic & aerial maps
COMMUNITY
Research community amenities & information
SCHOOLS CONVENIENCE CRIME
Sources: Google Maps, Bing Maps
Sources: Nellis Group Community Pages, HOA Websites
Study schools and school districts Sources: US News & World Reports Education Reports
Plan your commute and find area conveniences nearby Sources: WMATA Metro/Bus Website, Slug Lines, DriveScore
Examine the crime in the surrounding area Sources: Police Department Websites, Newspaper Crime Reports
In-Person Home & Community Research Visit your potential neighborhoods to look around and get a feel for the area. See what you like about it and more importantly what you don’t like.
Complete a community drive-by
Immerse yourself in the community to see if you like it
Go neighborhood door knocking Ask neighbors about the pros and cons of the neighborhood
10 Questions To Ask The Neighbors 1. What do you like the best about living here?
6. How are the schools?
2. What do you like the least about living here?
7. How is the crime in this area, have there been any incidents?
3. If you could change one thing about the street, what would it be?
8. How quiet is it? Are there any nuisances?
4. Do all the neighbors get along?
9. Why is the seller is selling the house?
5. Have you ever noticed anything odd about this house or yours?
10. Has the seller ever complained to you about the house?
Make a commute practice run
See what the traffic / bus schedule / metro / slug lines are like
Visit homes with your Realtor Specialist Discover the deficiencies of each home as well as the benefits
Don’t be afraid if the first home is the right fit. By studying your wants and needs and utilizing our experience to discern what would fit best with you, the Nellis Group can help you find a great home while making the most efficient use of your time. 21
Determine What The Home Is Worth Determine Your Offer Strategy Determine Your Negotiation Strategy Make An Offer Negotiate Counteroffers
RESERVED
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Section IV Reserving Your New Home Reserving a home assures that the sellers cannot sell the home to another party, even if that party offers more money. It is a way to “reserve� the home while you examine the home and all of your options. While the contract is underway once you reserve the home, you are not locked in to purchasing the home. There are 3 stages or exit strategies where you can legally walk away from the contract with no penalties. After you determine the price of the home, determine your offer & negotiation strategies, make an offer on the home, and have the offer accepted, the home is officially reserved for you.
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Understanding Price & Developing A Reserve Strategy SALES PRICE - What Is The Home Selling For? This is the official listed price of the home as determined by the seller. This price may be above, equal to, or below market value depending on the sales strategy of the seller.
TARGET PRICE - What Is The Home Worth? This is an estimate on the actual market value of the home. This price is determined by the Nellis Group Pricing Specialist/Licensed Appraiser who runs a Mini Market Analysis (MMA) to develop the most accurate price possible. This value will be the baisis of your pricing strategy.
3 Ways To Find The Estimated Target Value
Nellis Group MMA (Most Accurate) A Mini-Market Analysis performed by a Licensed Appraiser.
Typical Realtor CMA
(Less Accurate)
A basic computer generated comparative analysis performed by a Realtor, not an appraiser.
Generic Online Estimates
(Least Accurate)
Inaccurate computer generated price estimates that do not take into account all factors of the actual market.
The target price may be above or below the sales price because either the seller is utilizing their own specific strategy or because they have not accurately valued the home.
Target Price Home Overvalued Few - No Offers 24
Target Price Sales Price
Home Undervalued Many Offers
RESERVE PRICE - What Will You Offer For The Home? This is the actual price that you will submit to the seller during your initial offer. It based on your pre-developed pricing and negotiation strategy taking into account a combination of both the target price and the sales price. Every transaction is different, and you will balance the factors based on your goals.
12 Question Qualification Survey The first thing we do before making the official offer is to assess the needs of the seller, evaluate flexibility on the price, and determine the experience of the other agent through our proven 12 question qualification survey. This gives every buyer the insight into which type of offer to make on the home.
Developing Your Offer When we work together to develop an offer price, we want to make sure we remain aggressive
Aggressive For Securing
Aggressive For Value Getting the best terms, conditions, and value for the home.
Making sure that nobody else reserves the home before you do.
When There Are Few Offers
When This Is Your Dream Home
Another way to look at it is based on the number of offers that have been placed on the home. This is called the Prince vs Pauper offer strategy.
Prince vs Pauper
Pauper Lower Offer Few Offers
Prince
Sales Price
Higher Offer Many Offers
Remember that every case is different and is going to have its own intricacies that will effect your offer strategy. 25
Negotiation Stages & Exit Strategies
There are 3 Phases of the process where a contract can be negotiated Initial Phase
3 Phases Of Negotiation Inspections Phase
Appraisal Phase
Homeowner Docs Phase
3 Exit Strategies
There are also 3 exit options where a buyer can walk away from the contract
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Section V Negotiations At the Nellis Group, we promise to be defenders of your equity. We do this by having sound and proven negotiation skills that will net you the best value and terms for each contract. Your Realtor will guide you through this process and work hand in hand with you to help you achieve your goals. And if at any point you want to exit the contract and walk away, we will help you do so at the proper stage of the negotiations so that there will be no penalty to you.
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Once You Send In Your Initial Offer, The Negotiation Process Begins Initial Negotiation Phase When you make an offer on a home, your Realtor specialist will work with you to field any counteroffers from the seller so you can get the best terms or take your offer off the table. 8 Keys To Negotiating the Best Offer Leveraging Days On Market
Offer Competition
12 Question Survey
Realtor Reputation
Lender Advantage Program (LAP)
Settlement Timeframe Proof Of Funds
Emotional Appeal (Writing A Personal Letter)
Inspection Phase After your offer is accepted and your home is reserved you will want to order a series of inspections in order to ensure everything in the home is in the proper order. Typically every buyer orders a home inspection and your Realtor specialist will help you decide if there are any other inspections that you should order.
Home Inspection
Average Price: $400 - $600
Roof & Attic Dwelling Exterior
Dwelling Interior
Structural System
Heating/Cooling
Electrical
Radon Testing $150 - $200
Plumbing
Termite Testing $50 - $100
Lead Testing $250 - $500
Environmental Testing $400+
Once you have performed inspections, the Nellis Group will help you negotiate any necessary repairs. This will also be a time period where you can walk away from the contract for any reason. 28
CLUE Reports A CLUE Report is basically a CarFax for a home. It lets you know all of the claims that were placed on that home in the last 7 years so you can determine if there are any “hidden� problems with the property.
Homeowner Document Review Phase If your home is part of an HOA, you will have a period of time to review the HOA documents and policies. You can also opt to exit the contract at this phase. There is no negotiations for this stage.
Lender Appraisal Phase Your lender will want to ensure they are lending you the correct amount of money for the home and so they will require a home appraisal. The lender will send out a licensed appraiser to view the home and determine an appraisal value. Once this value comes back, there are 4 possible outcomes depending on how the home appraises compared to the sales price, described in the chart to the right. This is also the last stage at which you can exit a contract for any reason without any penalty.
What If The Home Appraises Below Sales Price
SELLER ADV
BUYER ADV
COMPROMISE
Seller reduces the sales price to the appraisal price
Buyer brings additional funds to cover the difference Seller reduces the price some, buyer brings some additional funds Buyer can walk away from the contract with no penalty
Seller Buyer Seller Buyer Seller Buyer Seller
Buyer
Once your mortgage has been approved you can now remove your financial contingencies. 29
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Section VI Closing On Your New Home Now that your mortgage has been approved and you have passed by all of the contract exit stages you will be closing in on the final steps before the wonderful feeling of settlement day. The Nellis Group team will help you complete all the final tasks in order to get your home closed on time.
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Final Considerations Remove Financial Contingencies
Performing A Title Search
Conduct A Property Survey
Ask your Realtor about if it is the proper time to remove your financial contingencies.
Our Advantage Partners will make sure the seller owns the property, rule out encumbrances, and ensure it is free of any liens. A property survey should be conducted to see the legal property boundary lines and easements that could impact the property.
Optional Considerations Homeowner / Hazard Insurance
Home Warranty
Many buyers choose to purchase homeowner’s insurance in order to protect their home from any unforeseen circumstances. This optional warranty covers the home for 1 year after purchase, alleviating stress so that if anything is mechanically wrong with their new investment they are protected.
Final Steps Ordering Your Utilities
Final Walkthrough
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The Nellis Group team will help you to schedule all utilities to be turned on at the day of settlement. You will walk through the property with your Realtor Specialist and make sure all repairs were completed to ensure the home is in good condition.
Closing Costs On the day of settlement you will have to pay the closing costs of the transaction. Your lender should have given you an estimate (GFE) ahead of time. If you are using a Nellis Group Advantage Partner, we require them to send you the final numbers 48 hours in advance.
Lender Fees Tax & County (Recordation)Fees Title Insurance
Optional Owner’s Coverage
Prepaids / Escrow
Specific fees associated with a lender.
A “sales tax” for purchasing your home.
Your lender will require you to purchase title insurance or they will not provide you with the loan. This protects their interests if you stop making payments and gives them first position to acquire the property. This recommended but optional coverage protects you from any other issues concerning the title. This is money collected by the lender so you are covered with insurance and tax payments for the next time they are collected on the home. The lender is required to pay these bills if you escrow as part of your monthly payment.
Settlement Day This is the day you have been waiting for since your first meeting with the Nellis Group. On the day of settlement, you will pay applicable closing costs & sign the deed. You are now the official homeowner!
Congratulations on your new investment! 33
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Section VII The Nellis Group Experience Your journey with the Nellis Group does not end when you close on your home. We want to continue our relationship with you and keep you informed of everything that is going on with our company and in the real estate market.
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Charity Outreach The Nellis Group is committed to helping people in our community in need. Whether it be through monthly tithing, special charity events, working closely with our charity partners or our special client donation program, we always have those less fortunate in mind. We were blessed with a great business and we find it is important to give back to the community. Whenever you buy or sell a home with the Nellis Group, we will donate a portion of our commission to one of the Nellis Group charity partners (listed below) in your honor.
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Nellis Group VIP Program Once you buy or sell a home with the Nellis Group you are automatically enrolled into our NG VIP client benefit program. As a member of this program you will receive access to special contests and giveaways, raffles for sports tickets, moonbounce rental, and invites to Nellis Group special events and seminars that take place throughout the year.
Redskins & Nationals Ticket Consideration Monthly Giveaways & Contests Home Anniversary Gifts Birthday Wishes & Prizes Charity Donation In Your Honor Ability To Rent Our Moonbounce Invitation To Special Festivals & Events Sweet Success Free Holiday Pie Much More!
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Important Terms 5 Pillars Of Real Estate
The 5 factors that a buyer needs to look at before choosing a home. The Pillars are: Community, Convenience, Crime, Location and Schools.
Nellis Group Advantage
The 5 factors that a buyer needs to look at before choosing a home. The Pillars are: Community, Convenience, Crime, Location and Schools.
Preferred Buyer Agreement
A two-way agreement where we commit to our clients and they do the same so we can both work together to find the best home with the best terms.
Advantage Partner Program
This optional program offers you access to a select group of experienced advantage partners that can give you exceptional service during different phases of the home buying process.
Lender Advantage Program (LAP)
A two-way agreement where we commit to our clients and they do the same so we can both work together to find the best home with the best terms.
Advantage Partners
Mini Market Analysis (MMA)
Contract Exit Strategy
Reserving A Home
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A team of our preferred contractors and partners who have helped our clients during the home buying process and provide excellent service. A comprehensive market style analysis performed by a licensed appraiser giving you a more accurate pricing of the home. A way to legally exit a contract for a home you have reserved without any penalty.
A way to save a home so that you can make the decision on whether or not to purchase it.
Reference Families Moved With The Help Of The Nellis Group
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Glossary Adjustable Rate Mortgage (ARM): A mortgage whose rates change during set periods of the mortgage based on the market’s interest rate. Appraisal: The process by which the lender determines how much the home is worth to determine mortgage details. Balloon Mortgage: A mortgage that offers low rates for a period of time before it increases or is refinanced. Buyer Agent: A licensed Realtor who offers you professional representation during a home buying transaction. Closing Costs: The payments that are due on settlement day. C.L.U.E. (Comprehensive Loss Underwriting Exchange) Report: A report that acts like a Carfax report, and let’s you know if the house has had any serious issues in the past.
FHA (Federal Housing Administration) Loan: A loan protected by the government. Financial Contingencies: Time frame for purchaser to secure full loan approval. Fixed Rate Mortgage: A mortgage that has the interest rate locked-in for the full term of the loan. For Sale By Owner (FSBO): A person who is selling their home without professional representation. Foreclosure: When a homeowner defaults on their mortgage, their ownership is terminated and the bank takes the property. Home Warranty: Optional coverage that protects the buyer from any unforeseen mechanical problems with the home. Homeowner’s Insurance: Hazard Insurance protects the home and it’s contents.
Commission: An amount collected by an agent for services rendered.
HUD-1: A settlement statement that discloses all the closing costs.
Conventional Loan: A private loan that is not guaranteed by the US Government and generally has 15, 20, 0r 30 year terms.
Inspection Phase: The time when a buyer orders the necessary inspections to ensure the home is in acceptable condition.
Deed: A legal document transferring ownership of a property.
Good Faith Estimate (GFE): An estimate of the closing costs given to you by your lender ahead of time.
Default: A failure to pay mortgage payments.
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Discount Point: Money paid to reduce the interest rate of the mortgage.
Home Inspection: A procedure ordered by the buyer to make sure the home is safe, structurally sound, and in working order.
Down Payment: Money paid up front in cash that reduces the loan amount.
Lien: A legal claim for a property that is satisfied on the sale date.
Glossary Lock-In: Protection from changes in interest rates. Market Price: The amount of money the home is worth based on current local conditions.
Realtor: A licensed professional who can represent buyers.
Mortgage: A lien on the property that promises you will pay.
Real Estate Owned (REO): A sale where the bank is the direct seller of the property. (foreclosure) Refinancing: Paying off one loan while obtaining another. Generally done to secure a lower interest rate.
Offer: A document given to the seller to purchase the home including sales price, terms, and contingencies.
RESPA: Laws requiring lenders, Realtors, and all parties to disclose all information.
Pre-Approval: Qualifying for a mortgage before the home search so you can be viewed as a serious buyer.
Sale-Leaseback: An arrangement where the buyer allows the seller to live in the home for a certain period of time at a certain rate.
Prepaids/Escrow: A closing cost paid to protect the lender for the first month of mortgage and taxes. Prime Rate: The interest rate charged by lenders and banks. Principal: The amount borrowed from a lender that is subject to repayment with interest. Premium: Amount paid to maintain insurance coverage. PITI: Principal, Interest, Taxes, Insurance; the main elements of a monthly mortgage. List Price: The amount of money that the seller will take for the home. Local Lender: An experienced area lender who will qualify you for a mortgage and is aware of state & county costs. Radon: A cancerous gas that can be found in homes. A Radon inspection can be done to protect the buyer.
Settlement: The closing of the buying and selling transaction. Short Sale: A sale where the seller owes more than the home is worth so the bank agrees to allow the sale, taking a loss. Survey: A property diagram that indicates the location of improvements, legal boundaries, easements, encroachments, rights of way, etc. Title: A document indicating ownership of a property. Title Insurance: Indemnity against loss resulting from disputes over ownership of the property and defects in the title. Title Search: The process where the owner of the title is verified and the title is examined for liens or issues. Underwriting: Analyzing the risk in a loan application. VA Loan: A loan for veterans or current military insured by a federal agency. 41
Notes
THANK YOU!
We sincerely thank you for putting your trust in the Nellis Group for all of your Real Estate needs. We are grateful that our company has been able to work with over 3,000 friends just like your, and we are excited as we grow our company towards 4,000 over the next several years. Every client is a blessing and we ask that you keep us and your experience with our team in mind when you come across friends, family, and co-workers who are looking for a Real Estate specialist for their own needs. Over 80% of our business comes from referrals and we would be very thankful if you could help us continue to provide excellent service to those in the community.
Thank You! And Congratulations On Your New Home!
KELLER WILLIAMS CAPITAL PROPERTIES
w w w. Ne l l i s Group. c om