West Austin Propertie's Home Buying Guide by Patrick Birdsong

Austin Home Buyer’s Guide

Your Step-by-Step Guide to Buying a Home

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

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Introduction

It's not About Us... It's All About YOU! Thank you for choosing us to represent your interests regarding your real estate needs. We’re looking forward to counseling with you further to explore how we can best support you in achieving your real estate goals. Every move is motivated by a desire to change your present circumstance, whether you are moving into your first home, moving up, downsizing, or moving out. It is our mission to assist you in achieving your objective as smoothly and successfully as possible. This book is designed to prepare you for the many critical decisions that come with purchasing a home. We believe it is important that you have a full perspective of the process and know what questions to ask. Our intention is to demonstrate to you the value of superior service in one of the most important decisions in your life—purchasing a home. Thank you for the opportunity to work with you. It is our pleasure to be of service. Laura Duggan, Patrick Birdsong, President Partner West Austin Properties

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Table of Contents

We have designed this package to assist you with the purchase of your new home. We understand the many questions and concerns of homebuyers and hope this information will be helpful throughout our transaction. We assure you that it is our goal to provide you with the most professional and informative service available within our industry. These are some of the areas we will be covering: Page Introduction 7 Why Should you buy today? Are you ready to Buy? The Right Choice to Represent Your Interests

1 2

Discovering What’s Important to You Preparing to Purchase Your Home Personal Buyer‐Profile Sheet Purchasing New Construction

How the Search for Your Home Unfolds Step by Step—The Buying Process Buyer Notification System Estimated Time Chart

Important Decisions in Buying Information About Brokerage Services Preferred Buyer Agreement Getting Preapproved Understanding Title Insurance

Preparing to Buy‐The Financing Process Loan Application Checklist Your Closing Costs ‐Who Pays for What at Closing? ‐Worksheet for Calculation

West Austin Properties Company Profile Meet The West Austin Properties Group Complimentary Services Testimonials & References

Other Important Parts of Buying a Home Helpful Tips on Finding Your Home Important Points with Home Inspections Moving‐Preparation Checklist Contracts, Addenda and Disclosures Important Links and Websites Glossary of Terms

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The source of all the statistical data in this report is from the Austin Board of Realtors Multiple Listing Ser‐ vice. All of the information in the ABoR MLS is believed to be accurate, however, is not guaranteed. All of the data was complied and analyzed personally by West Austin Properties and Patrick Birdsong. All of the opinions contained herein are those of West Austin Properties, unless otherwise noted. The presentation of the data in this report is licensed under a Creative Commons Copyright License. This document may be shared, as long as it is passed along unchanged and in whole, with proper attribution to West Austin Properties. We encourage you to share this report with others who you think might find it valuable. If you have ques‐ tions about any of the information, or would like additional information, or additional copies of the report, we are happy to help however we can. All you have to do is give us a call at 512 345‐5212, or send an email to homes@westaustin.com

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Introduction

Introduction Why Should you buy today? Are you ready to Buy? The Right Choice to Represent Your Interests

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

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Why should you buy a home today? 1. It's a buyer's market!!! There are 16% more homes on the market to choose from today than last year! 30-Year Fixed Mortgage Rate 2. Interest Rates are in the 4‐5 percent range. STILL 8.50 8.00 at historically low levels (view chart on right). 7.50 7.00 6.50 6.00 5.50 5.00 4.50 4.00 3. Owning a home is one of the best ways to build Y ear - Q uar t er wealth. The U.S. Federal Reserve Board's Survey of Consumer Finances showed home owners had an average financial net worth of $184,400, while renter's net worth was just $4000. 4. Start building Equity! Based on the average single family home rental rate of $1,425 per month in the City of Austin, after 10 years you will have wasted $171,000!! On the other side of the coin, the average home in 1998 cost $173,401 to‐ day the average home cost $293,487. That is a $120,086 gain. 5. If you are a renter, you have probably seen your rents raised in the past year or two and if you haven't yet, this is sure to come. With foreclosures and a slowing economy, more people are being forced into or are conservatively choosing to rent. Rental rates are influenced by supply and demand, and therefore, as demand increases, so will rental rates. 6. There is no way to time the “bottom of the market.” Even though the sales in our area have decreased, prices have still been increasing in most areas. An important concept to know and understand in real estate, as with the stock market, is the concept of "Time in the Market" trumping "Timing the Market". You will never know when we hit the bottom of the mar‐ ket until sales have already begun increasing which could lead to appreciation levels in the high single digits and low double digits like we saw in 20005 and 2006. Getting into a home now ensures a good price and good rate AND a piece of the market before our next major upturn.

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Why should you buy today? 7. Tax breaks!!! If you are single, don't have children and/or don't own a business, chances are you see little to no money back each April on your tax return. Owning a home provides great tax benefits including deductible items such as mortgage interest (both on your first and second), PMI or private mortgage insurance, and others. Check with your CPA for more tax‐saving home ownership information. 8. It is a great move up market. In other words, it is a great time to sell your cur‐ rent home and use the equity you've built to buy your next home or build your dream home! 9. First Time Homebuyer?? Take advantage of up to a $7,500 tax credit in the form of a no‐interest loan. (You qualify for this program if you have not owned a home in the past 3 years).

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The Right Choice to Represent Your Interests Buyer Representation—How We Can Help Question: Answer: Question: Answer: Question: Answer: Question: Answer: Question: Answer:

Do home buyers need the help of a Buyer Representative? Without a doubt! When buyers work with a real estate professional who is 100% loyal and completely committed to them, chances are that the entire home‐buying process will go smoothly, with a higher level of buyer satisfaction. What is a Buyer Representative? A Buyer Representative works solely for you and has no legal or other responsibilities to the seller. When working with a Buyer Representative, you have the advantage of personal representation, independent counseling, loyalty, confidentiality and trust. A Buyer Representative is exclusively your agent, representing only your interests in presenting and negotiating offers and assisting you in closing the transaction.

Can a Buyer Representative show us the same properties? Yes, a Buyer Representative can show you every home listed in the REALTOR’s Multiple Listing Service (MLS), plus Real Estate Owned (REO) and For Sale By Owner (FSBO) properties. Additionally, a Buyer Representative can show you builder models to select your own, brand‐new properties and unlisted homes. Will a Buyer Representative disclose more information to us? Yes indeed. A Buyer Representative’s fiduciary responsibility is to you, he or she can be more forthcoming with any negative aspects about properties that you are investigating for purchase. Does a Buyer Representative make decisions for us? No. As your personal ally, advocating your best interests, a Buyer Representative is obligated to provide you with maximum information about buying a home, each step of the way. That means disclosing specifics about location, property values, offering price, negotiations, counteroffers, contingencies financing, and the entire closing process. Armed with such vital and detailed information, you’ll be thoroughly prepared to make decisions that are right for you and your family.

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The Right Choice to Represent Your Interests Buyer Representation—How We Can Help Question: Answer: Question: Answer:

What about negotiating the details? First, a Buyer Representative is fully qualified and highly skilled in the back‐ and‐forth negotiations and financing queries that precede the closing of most real estate transactions. Secondly, a Buyer Representative is also experienced and committed to helping protect your best interests in the purchase. Representing you and supporting you: That’s a powerful combination! What do you mean by “confidentiality”? Since a Buyer Representative is legally obligated to only you, he or she can help you maintain absolute privacy with regard to financial and personal information. That’s another important benefit of working with a qualified Buyer Representative.

Question: A few more questions? Answer: We can give you more details and answer all your questions. Please jot them down here, so you can come back to them. Your Question: __________________________________________________________ _________________________________________________________?

The Answer: Your Question:

__________________________________________________________ __________________________________________________________ __________________________________________________________ __________________________________________________________ _________________________________________________________?

The Answer: Your Question:

The Answer:

__________________________________________________________ __________________________________________________________ __________________________________________________________

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Discovering What’s Important to You

Discovering What’s Important to You Preparing to Purchase Your Home Personal Buyer‐Profile Sheet Purchasing New Construction

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

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Discovering What’s Important to You Preparing to Purchase Your Home The following are important steps to take before looking at homes: Before you begin the home‐buying process, find out from your lender the largest amount for which you can qualify to purchase a home. You can always choose to spend less. It is very easy to become excited about features found in homes out of your range. Please see our section on The Financing Process for additional information on obtaining a loan. Complete the list below. Please take a few moments to decide what features are “Must Haves” (location, number of bedrooms or bathrooms, garage, accommodating special pieces of furniture) and which features are “Wants” (spa, wine cellar, theater room, etc.) When you meet with us, we will talk with you regarding the features you are looking for in your home. Use this list as a point of reference for your meeting. Oftentimes, people change their minds regarding their search criteria. Please make sure to let us know if any of your parameters change during the home search process. That way, we can better serve you and help you find the home that meets your criteria sooner.

The Top Features I Want in My Home! I must have the follow in my new home: 1. ______________________________________________________________________ 2. ______________________________________________________________________ 3. ______________________________________________________________________ I’d like to have the following in my new home, but they aren’t necessary in order for me to buy the property! 1. ______________________________________________________________________ 2. ______________________________________________________________________ 3. ______________________________________________________________________ I would like to stay within the following areas: 1. ______________________________________________________________________ 2. ______________________________________________________________________ 3. ______________________________________________________________________ Copyright © 2008 West Austin Properties, Inc.

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Discovering What’s Important to You, continued... Personal Buyer‐Profile Sheet Name(s):

________________________________________ Date: _________________

Address:

________________________________________

City:

_____________________________ State: ____ Zip: ___________

Email:

________________________________________

Cell: ________________ Home: _______________Work: __________________ Number of people in household? ________________________ Children’s names and ages (if applicable): ________________________________________ __________________________________________________________________________ Which of the following are important to you in this home purchase? (Check all that apply.) Community Services Child‐care services available YMCA/park‐district facilities Places of Worship High‐quality healthcare Convenience Close to present or future jobs Near grocery and other stores Park/play areas Easy freeway access

Neighbors Relatives/friends in the neighborhood Children for your kids to play with Active Community Groups

Home Requirements Home Style (please elaborate): _____________________________________________ Age of home:

_______________

Number of bedrooms:

_______________

Price range:

_______________

Finished square footage: _______________ Pool:

_______________

Other: _______________________________________________________________

_______________________________________________________________

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Discovering What’s Important to You, continued... Purchasing New Construction Why should I use an agent to purchase a “spec‐built” home? The advantage of having us help you purchase a new home are the same as those for pur‐ chasing a resale home. We can provide you with valuable insight into the new construction industry, help you find the perfect home quickly, and then provide you with expertise in inspections, contract writing, negotiation price and terms, and closing assistance. The builder has a professional real estate representative who watches out for his or her best interests, and you need and deserve the same expert representative watching out for yours. Buying a new home is a little more difficult and time‐consuming than buying a resale home. We can professionally guide you through this process. Having worked with many of the home builder’s in the area, we have a rapport with them and a knowledge of informa‐ tion about subdivisions, floor plans, etc. We are also very familiar with new home warran‐ ties and the nuances of the builder’s purchase contracts and various home inspections. Why should I use an agent to purchase a semi‐custom or a build‐to‐suit home? It is very important that your interests be professionally represented when you are enter‐ ing into a contract for a semi‐custom or a build‐to‐suit home. These transactions are very complex. The contract details must be exactly in order to protect you and to ensure that you get exactly the home you want! Because of our relationships with many custom build‐ ers, we can introduce you to a builder who will best suit your needs and monitor the con‐ struction process. And when it comes to the home inspection, we will explain to you why it is essential to hire an independent home inspector to thoroughly inspect a newly constructed home. Insider tip: Always consider the resale market when designing a home, even if you will never move! This will ensure you can sell it if you absolutely have to.

Are there any advantages to not using an agent to purchase a new home? There is no financial advantage for you to buy directly from the builder. Builders have a “single price” policy, meaning that you will be charged the same price whether your inter‐ ests are represented by an agent or not. As with most resales, the seller pays your agent’s fee. Most builders will make you give up your right to representation if you visit their model homes without an agent on the first visit. Therefore, please call us if you would like to look at some model homes, so you are given the representation you deserve! Copyright © 2008 West Austin Properties, Inc.

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How the Home Search Unfolds

How the Search for Your Home Unfolds Step by Step—The Buying Process Buyer Notification System Estimated Time Chart

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

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How the Search for Your Home Unfolds Step by Step—The Buying Process Find a REALTOR® who you can trust The First Step… Now that you have chosen a specialized buyer representative who you can trust, you have accomplished the first step in the home‐buying process. We will make sure that all of your needs are met and will be representing you through the entire process of buying your new home. Getting Pre‐Approved An Important Step… We feel an important aspect when starting the process of buying a home is to meet with a lender and get a pre‐approval for your financing. We can put you in contact with a lender, if you desire, who can give you information about your approval and also explain some of the financing options available to you. (To see my list of preferred vendors most commonly used in a real estate transaction click the link, budurl.com/ CommonVendors, to see my list of all preferred vendors click the link, http://budurl.com/ PreferredVendors.) Consulting Session Important Information… We will meet you one on one to discuss the features you desire in a home as well as to pin‐point the area you want to explore. The Search Begins The Next Step… Once you’ve established the type of homes you’re searching for, it’s time to start looking. We offer several choices for your home search: Buyer Previewing: We will set you up on an automated system that will email you any time a new property comes onto the market that matches your criteria, when you see a home you would like to view, we will arrange to show it to you. Self‐Guided Tour: We provide you with a list of homes, driving directions, a GPS (if re‐ quested) so that you can drive out to the homes at your leisure. When a home of interest is found, contact us to arrange a personal showing. This is ideal for those who want to learn the areas and explore neighborhoods on their own. Agent Previewing: This is a more traditional approach. We preview all the homes that match your criteria, narrow it down to the “cream of the crop” based on our experience and then on a predetermined day, we will get together and find that perfect home. Copyright © 2008 West Austin Properties, Inc.

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How the Search for Your Home Unfolds, continued... Step by Step—The Buying Process Your Offer Be careful—This Is a Big Step… When you find your dream home, you should present a competitive offer immediately. We have extensive experience in contract negotiation; we will ensure that you get the home you want for a fair price—a transaction in your best in‐ terest. You will be writing an Earnest Money Check and an Option Money Check at this time. Don’t forget your checkbook! The Accepted Offer We’re Starting to Jog Now… When the seller accepts your offer, you will have what we call a pending offer. You want to make sure that every detail is handled accurately and immedi‐ ately. We will ensure that your home closes properly and on time. Inspections You’re on the “Home” Stretch!... Final details are handled and inspections are performed to ensure that the property is “perfect” for you. Contract details are further negotiated and we head to closing! Signing the Loan Documents Finalizing the Lender’s Commitment… Be prepared to bring your cashier’s check, insurance binder and driver’s license to the closing. The next steps you take will be into your new home! Now the Home is YOURS! You are Finally Home...After the deed is recorded and a possession date is decided upon, pick up the keys and move into your new home!

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How the Search for Your Home Unfolds, continued... Estimated Time Chart The following timetable has been suggested to give you an idea of the timing of the differ‐ ent events in the home‐buying process. It is meant to be a guide and if you have any ques‐ tions, please ask us. First Week Complete lender requirements for loan approval Deposit earnest‐money check. (Needs to be done within 48 hours of an accepted offer.) Option check delivered to seller. Arrange for property inspections. Second Week Attend property inspections. Make repair requests to seller. Confirm that all information requested by the mortgage company has been submitted. Third Week Confirm that repairs have been completed. Call to find out if mortgage company needs additional information. Arrange for mover. Fourth Week Walk through home to verify completed repairs. Arrange for cashier’s check for closing. Arrange for settlement and signing of papers. Arrange for transfer of utilities. (Click on link for list of utilities, budurl.com/LocalUtilities.) Arrange for exchange of keys and personal items.

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Important Decisions in Buying

Important Decisions in Buying Information About Brokerage Services Preferred Buyer Agreement Getting Preapproved Understanding Title Insurance WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

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Important Decisions in Buying

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West Austin Properties Preferred Buyer Agreement, page 1 of 2 Your West Austin Properties’ agent will be making a large time commitment, and a finan‐ cial one as well, as he or she represents you in your home purchase. To provide the stellar type of service that you expect and deserve, requires many hours of preparation and plan‐ ning, extensive property review, time for showing appointments, negotiation, and time co‐ ordinating with lenders, title people, inspectors and repair people. Your agent and the West Austin Properties support staff invests many hours to ensure that you find the right home and make a good purchase. We want you to be a raving fan! That is why we require each of our new clients to make a similar commitment by signing our Preferred Buyer Agreement. Purchasing a home through us will cost you nothing. This Agreement simply states that when you buy a home in our coverage areas (Travis, Wil‐ liamson or Hays County), you agree to buy a home through us and not another agent or real estate company. This assures us that will be compensated for the time and energy that we devote to you, and we will be able to continue to set a higher standard. We ensure that your transaction is handled in such a way that we help eliminate stress and make the process an enjoyable experience. We are professionals with many years of ex‐ perience, and we are good at what we do. Our staff specializes in each stage of your trans‐ action. That is why we ask you to sign a contract authorizing us to represent you as your Buyer Representative. We will search diligently for the properties that fit your needs. When you are ready to put us to work for you, please sign the Agreement and return it to us. It will be our pleasure to help you find the perfect home. Initialed by Buyer for Identification _____ _____ and Buyer’s Representative _____ WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

West Austin Properties Preferred Buyer Agreement, page 2 of 2 We will provide you with the following services: 1. We will arrange a free, no‐obligation pre‐qualification meeting for you with a trusted lender to determine the best loan program. 2. We will search the Multiple Listing Service for all homes listed by real estate companies to make sure that you know about every home or building site for sale in your price range. If you want a new home, we’ll find the builder who will build you the most home for the best price. We will also seek out property that may not be on the open market. 3. We will arrange private showings for any and all homes you wish to see or we will coordinate meet‐ ings for you with the best home builders in the area. 4. We can help with negotiation and purchase of any For Sale By Owner homes. 5. When you find the right home or builder, we’ll assist you with preparing an acceptable offer that is in your best interest. 6. We will strategize about the offer price, financing terms, interest rate and possession date. 7. We will recommend the best services: home inspections, appraisal, home warranty, and moving companies. 8. We will obtain answers to any and all questions you may have. 9. We will present the offer on your behalf to the seller, the builder, the For Sale By Owner or the seller’s agent. We will negotiate in your best interest at all time to get you the best deal possible. 10. We will help you find the greatest possible financing. 11. We will work hard to ensure that you receive exceptional service from everyone involved with your home loan. You agree: 1. To immediately seek pre‐approval from a home lender if your pre‐qualification goes well. 2. To notify us of any listed home you wish to inspect or builder you wish to interview. 3. To inform builders, For Sale By Owners and real estate agents that you are working with us. 4. To make any offer on any home or new construction through us. 5. That you are under no obligation to buy or build a home. 6. That, for all these services, you owe us nothing. Our fee will be paid by the builder or seller on any home that you purchase or build. 7. That if you choose to purchase a property from another real estate firm, For Sale By Owner or builder without using us, then you agree to pay us a fee of $150/ hour for our time, effort and services. This agreement expires one year from today’s date and is applicable only within this area. _______________________________________ _______________________________________ Buyer’s Signature Date Buyer’s Signature Date _______________________________________ Buyer Representative’s Signature Date WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

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Important Decisions in Buying Getting Pre‐Approved It is extremely important that you connect with a reputable and honest lender. We can recommend lenders who have earned our trust and with whom we’ve had good experi‐ ence in the past. The lender will review your financial position to determine the price most suited to your ability to pay and your comfort level. Together, we can select the loan program that best meets your needs. The pre‐approval process will help you in the following ways: ∙You will know in advance what your payments will be. ∙You won’t waste time considering homes that don’t meet your criteria. ∙You can select the best loan packages without being under pressure. There are many options and programs to choose from in today’s market. Your lender will explain the al‐ ternatives to help you select the one best suited for you. ∙Sellers will find your offer to purchase more favorable if they know in advance of your ability to secure financing. This will make your offer more competitive if you are in com‐ petition with other offers. Most listing agents require a pre‐approval letter to accom‐ pany all purchase agreements. This is a requirement if you are purchasing a short sale or foreclosure. ∙You’ll have an estimate of your closing costs, and we will explain them to you in detail. ∙You’ll have peace of mind. Pre‐Qualification vs. Pre‐Approval: There is a Difference! Pre‐qualification is the step before pre‐approval. This means that the lender has pulled your credit, you have filled out a basic application and based on the lenders experience, they can tell you what you pre‐qualify to purchase. A seller can be leery of that letter as most know it is not full credit pre‐approval. Best Piece of Advise Take the pre‐qualification one step further and get a full loan approval. This is the best approach! To see my list of lenders with whom I work and trust, visit the following link: budurl.com/CommonVendors. Copyright © 2008 West Austin Properties, Inc.

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Important Decisions in Buying Understanding Title Insurance What is Title Insurance? A Title Insurance Policy is a guarantee by a title company that a thorough investigation of the title to the property has been conducted and that you have been notified of any outstanding claims to the property. The title insurance company reports any defects in the title in the form of a Title Commitment so that these matters can be correct (to download an example Title Commitment click the link, budurl.com/ExTitleCommit). It is important that you know of all claims on the property and have them resolved and declared removed prior to you taking title to the property. The Title Commitment will carefully detail what items of encumbrance are not covered by the policy. You can either get these items resolved or bow out of the transaction. Title Insurance covers matters that occurred before the policy’s effective date but were discovered later. Your policy will detail what is covered, what is not covered and the effective date. Title insurance is issued by the title company when they are certain the property is free from all liens, encumbrances, interest, etc. and the insurance guarantees such. This is so the title can be legally transferred to the buyer to be used as security for the lender’s funds. This is why title insurance is re‐ quired by the lender. Your lender has an interest in knowing that you and the lender are the only par‐ ties with claims to the property. The title insurance company thoroughly searches the public records to uncover any unpaid taxes, mortgages, judgments against previous owners, easements and other court actions or recorded docu‐ ments that can affect title to the real estate. The insurance also provides protection against any de‐ fect in the public record such as forgery, similar names, errors in the records, etc. and protects against any undiscovered or unrecorded claims that may arise in the future. When title insurance is issued, the title‐insurance company accepts the responsibility for any and all claims on the property prior to your purchase if they do not find the claim or call it to you attention prior to your purchase of the property. That responsibility includes defending your title in court, if necessary (at their expense). Or bearing the cost of settling the claim (if it proves valid) in order to perfect your title and keep you in possession of your property. Unlike other forms of insurance, the original premium is your only cost as long as you or your heirs own the property. There are no annual payments required to keep your Owner’s Title Policy in force. Title insurance protects you twice—it notifies you of claims against the property and insures you against any future claims on hidden items.

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Important Decisions in Buying Why Title Insurance is so Important! To understand why a title search is so important, you must understand the nature of real estate. Real estate has always been considered a person’s most valuable possession. It is so basic a form of wealth that many special laws have been enacted to protect ownership of land and the buildings that stand on the land. The owner who is selling the property has extremely strong rights, as do his/her family and heirs. Also, there may be others who have “rights” in the property you are going to buy. These may be governmental bodies, contractors or any other individuals who have perfectly proper unpaid claims against the property. Unscrupulous owners may have taken out a second mortgage on the home prior to closing. Anyone who has such a claim in the property you are buying is, in a sense, a part‐owner. The property may be sold to you without the knowledge of other parties who have claims against the property. Without a title check conducted by the title‐insurance company, you know nothing about such claims at the time you buy. All such claims remain attached to the real estate you are purchasing and not to the previous owners. The title company will notify you of all liens, encumbrances and interests in the property so that these can be resolved by the current owners prior to the sale. Proof of a “good” ti‐ tle—a title free of any liens, encumbrances or interests—is important because otherwise you are li‐ able for the claims. Title‐insurance policies are standard. Owner’s policies usually do not cover one or more of the follow‐ ing matters (often referred to as “Standard Exceptions”), unless an additional premium is paid and/or extra investigative work or a survey is done and the necessary evidence is furnished to the title com‐ pany. When the evidence is furnished and the insurance coverage is given, this is frequently referred to as “Extended Coverage.” The Standard Exceptions are: • Claims of people who turn out to be living in the house (such as prior owner’s tenants or someone living without knowledge of your property) if their presence there isn’t a matter of public record. • Boundary‐line disputes. • Easements or claims of easements not shown by public records. • Unrecorded mechanic’s liens (claims against the property by unpaid home‐improvement contractors). • Take or special assessments left off the public record. Other important exclusions from coverage include zoning, environmental‐protection laws, matters arising after the effective date of the policy and matters created, suffered or assumed by the insured.

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Preparing to Buy: The Financing Process

Preparing to Buy‐The Financing Process Loan Application Checklist Your Closing Costs ‐Who Pays for What at Closing? ‐Worksheet for Calculation

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

West Austin Properties Page 37 Home Buyer’s Guide

Preparing to Buy—The Financing Process Loan Application Checklist General □ Picture ID with social security number of borrower and co‐borrowers. □ Application fee. □ Name and complete address of all landlords for the past two years. □ Income verification as follows: □ Employment history for the past two years including names, addresses, phone numbers and length of time with each company. □ Copies of your most recent pay stubs and W‐2 forms (past two years). □ Verification of other imcome (social security, child support, retirement, etc.) □ If self‐emploed, you need copies of the past two years’ signed tax returns, including all schedules and a signed profit‐loss statement for the current year. Retiress need tax returns for the past two years. □ If you have rental‐property, bring a copy of all lease agreements. Assets □ Copies of all bank and credit union statements for the past three months. □ Copies of all stock/bond certificates and/or the past three statements from all investment and reitrement accounts. □ Prepare a list of household items and their values. □ Copies of title documents for all automobiles, boats, motorcycles, etc. □ Face Amount, monthly premiums and cash values of all life insurance policies. (Cash value may be used for clos‐ ing costs or down payments. You need documentation from the carrier indicating cash value.) Creditors □ Credit card account numbers, current balances and monthly payments. □ Installment loans (car, student, etc.). Same details for credit cards. □ Mortgage loans (property addresses, lenders and lenders’ addresses, account numbers, monthly payments and balances owed on all properties presently owned or sold within the last two years). Bring proof of sale of prop‐ erties sold. □ Child‐care expenses/support (name, address and phone number of provider). Other □ Bankruptcy: Bring discharge and schedule of creditors. □ Adverse credit: Bring letters of explanation. □ Divorce: Bring divorce decrees, property settlements, quit‐claim deeds, modifications, etc, for all divorces for yourself and spouse. □ VA only: Brin Form DD214 and Certificates of Eligibility. □ Retirees: Bring retirement and/or social security award letter. Copyright © 2008 West Austin Properties, Inc.

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West Austin Properties Page 38 Home Buyer’s Guide

Your Closing Costs—Worksheet for Calculation Who Pays for What at Closing? The seller can normally be expected to pay for the following ♦ Real Estate Commission. ♦ Owner’s title‐insurance premiums. ♦ Half of the escrow fee (except for VA loans, where the seller pays 100%). ♦ Payoff of all loans in seller’s name. ♦ Fees, re‐conveyance fees and prepayment penalties. ♦ Home warranty according to the contract, if any. ♦ Any judgments, tax liens, etc. against the seller. ♦ Recording fees to clear all documents of record against the seller. ♦ Tax pro‐ration. This is for any unpaid taxes at the time of transfer of title. ♦ Any unpaid homeowner‐association dues. ♦ Any assessments according to the contract. ♦ Any and all delinquent taxes per the contract. ♦ New approval of well, septic and as‐built survey (if required, as negotiated in contract.). ♦ Half of the document‐preparation fee (unless VA or FHA loan; then the seller pays 100%) The buyer can normally be expected to pay for the following ♦ Lender’s title‐policy premium. ♦ Half of escrow fee (unless you are a veteran and getting a VA loan; then the seller pays 100%). ♦ Recording charges for all documents in buyers’ names. ♦ All new loan charges (except those required of the seller by the lender). ♦ Interest on a new loan from date of funding to 30 days prior to first payment date. ♦ Assumption/change‐of‐records fees for takeover of existing loan. ♦ Home warranty according to contract. ♦ Fire‐insurance premium for the first year. ♦ Appraisal. ♦ Re‐inspection fee with appraiser or home inspector (as negotiated in contract). ♦ Home inspection. ♦ Reserve account for taxes and insurance. ♦ Flood‐certification fee. There are some mandatory costs ♦ Both FHA and VA require that the seller must pay for document preparation, tax services, warehousing and loan‐review fee (if any). ♦ VA: 100% of escrow closing fee. Copyright © 2008 West Austin Properties, Inc.

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West Austin Properties Page 39 Home Buyer’s Guide

Your Closing Costs—Worksheet for Calculation

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West Austin Properties

West Austin Properties Company Profile Meet The West Austin Properties Group Complimentary Services Testimonials & References

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

West Austin Properties Page 43 Home Buyer’s Guide

Company Profile

WEST AUSTIN PROPERTIES www.WestAustin.com

Established in 1974, West Austin Properties is a full‐service real estate company specializing in marketing and selling fine homes in Austin and the surrounding hill and lake country. Our associates are highly experienced, full‐time residential real estate agents dedicated to ensuring that our clients have the best experience possible buying or selling a home. State‐of‐the‐art equipment and the latest in technological support allow our associates to give their clients extraordinary service in a rapidly changing market. In addition to our agents’ high level of experience and extensive training, commitment contributes greatly to the success of our company. We are dedicated to your success and in enhancing the excellent reputation of West Austin Properties. We are proud that over 90% of our business is generated through repeat or referral business from past clients. From the moment you come into contact with West Austin Properties, our professionalism, positive attitude and sincere desire to be of service will provide you assurance that you have chosen the premier residential real estate company in Austin to service your needs. Affiliation

Global Owner, LLC

“All real estate is local… but not all buyers are.” ‐Angela Eliopoulos

www.GlobalOwner.com Broker/Owner Global Owner,LLC To better serve our clients, West Austin Properties has formed a strategic affiliation with Global Owner, a highly‐specialized International Real Estate Consulting company. As all corners of our world become more accessible each day our living, working, vacationing and investment choices grow exponentially. People are now moving to other countries almost as readily as they relocate to other cities. This affiliation is designed to help our buyers purchase property anywhere in the world, as well as market our listings to an international audience.

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West Austin Properties Page 44 Home Buyer’s Guide

Meet the Team

Laura Duggan is the owner and broker of West Austin Properties, a second generation real estate firm in Austin, Texas. As a third‐generation native with 30 years of experience, I am uniquely prepared to represent both buyers and sellers in the purchase or sale of a home in any price range. Doing relocation work is also a passion and connecting clients and their families to meet every need whether it is a special academic setting or finding a job for a spouse. My team makes the process seamless. While I specialize in luxury and waterfront properties, I also enjoy helping people buy and sell homes of all sizes and price ranges in the Austin area. I have a strong net‐ work of real estate friends all over the world, so I also refer clients and friends when they are seeking property almost anywhere. My husband, Brad, and I have been married for 27 years and have two fabulous, grown daughters, Kerry and Katy. We really enjoy any time that we can all get together. Patrick Birdsong began working in the real estate business at a very early age. Growing up in his father’s office in his hometown of Lake Jackson, Texas, he learned the practice of giving clients highly personalized service built one re‐ ferral at a time; caring about clients as if they were family. Patrick is the first of two second‐generation Realtors in the Birdsong family. Patrick is a graduate of the University of Texas and during his time there he be‐ gan working with Laura Duggan, broker‐owner of West Austin Properties learning everything there is to know about Austin and Central Texas from a third‐generation Native Austinite. He also gained valued knowledge about the business of real estate, rounding out a first‐class, hands‐on style of education. Since then, Laura and Patrick have become business and marketing partners. He has also con‐ tinued to purse his real estate education by becoming an Accredited Buyer Representative, a Certified Luxury Home Marketing Specialist and Transnational Referral Certified.

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West Austin Properties Page 45 Home Buyer’s Guide

Credentials Laura W. Duggan, CIPS, CLHMS, CRB, CRS Personal Data Third‐generation Austinite and native Texan Married 28 years to husband, Brad; two children, Kerry and Katy Professional Designations Bachelor of Science with Honors ‐ University of Texas; Education Masters ‐ University of Texas; Education Administration ABR‐ Accredited Buyer Representative CRB ‐ Certified Residential Brokerage Manager (2003 National President) CRS ‐ Certified Residential Specialist GRI‐ Graduate, REALTOR Institute CIPS‐ Certified International Property Specialist CLHMS‐ Certified Luxury Home Marketing Specialist, Guild Member Professional Qualifications and Affiliations Texas Real Estate Broker 2003 Board of Directors, National Association of REALTORS Active member, Texas Association of REALTORS Active member, Austin, Dallas and Houston Boards of REALTORS Active member, Austin‐Central Texas Realty Information Service; Houston MLS, Dallas MLS Active member, Council of Residential Specialists Active member, Women’s Council of REALTORS 2003 National President, Council of Real Estate Brokerage Managers Top Real Estate Women in Texas, Vogue Magazine, January, 2003 Texas Real Estate Super Agents, Texas Monthly, March, 2005 Best Marketing 2006, Council of Residential Specialists, February, 2006 Top Sales Team, January‐June, 2007, Capital City Sotheby’s International Realty 2009 Star Power Star Business Experience March, 1979‐October 1991 Vice‐President, West Austin Properties October, 1991‐July, 1992 Vice‐President, Keller Williams Realty July, 1992 to Present President and Broker/Owner, West Austin Properties and Global Owner Texas Community Involvement Member, Helping Hand Society Member, Leadership Austin Alumni Life Member, Texas Exes Alumni Association

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West Austin Properties Page 46 Home Buyer’s Guide

Credentials Patrick D. Birdsong, CLHMS, ABR, TRC Personal Data Second‐Generation Realtor® Professional Designations The University of Texas at Austin: B.A in Liberal Arts Minor in Business Foundations ABR‐ Accredited Buyer Representative CLHMS – Certified Luxury Home Marketing Specialist, Guild Member TRC – Transnational Referral Certified CRS Candidate Professional Qualifications and Affiliations Texas Real Estate Salesperson – License # 0516961 National Association of Realtors®, NAR Active Member, Austin Board of Realtors®, ABOR Active Member, Austin‐Central Texas Realty Information Service, ACTRIS Active Member, Texas Association of Realtors – International Committee Member 2009 Active Member, The Institute for Luxury Home Marketing, ILHM Active Member, Council of Residential Specialists, CRS & Austin Chapter of CRS Active Member, Real Estate Buyer’s Agent Council, REBAC Active Member, International Consortium of Real Estate Associations, ICREA Active Member, The International Real Estate Federation, FIABCI & Founding member, FIABCI – Austin Chapter Committee Chair, ABOR Political Action Committee, ABOR‐PAC Best Marketing 2006, Council of Residential Specialists, February, 2006 Top Sales Team, 2007‐2008, Capital City Sotheby’s International Realty Member Affiliate, Association of Mexican Professional Realtors, AMPI Attendee, Howard Brinton Star Power Seminars 2003‐2006, 2008 Business Experience October 2008‐Present Partner/Realtor, West Austin Properties/Global Owner Texas September 2006‐2008 Consultant, Platinum Sales Systems March 2007 ‐September 2008 Real Estate associate, Capital City Sotheby’s International Realty May 2002‐February 2007 Real Estate associate, West Austin Properties May 1998‐January 2002 Office Assistant, Birdsong Real Estate Community Involvement Life member, Texas Exes Alumni Association Active Member, Downtown Austin Neighborhood Association Active Member, Young Men’s Business League Active Member, Capital City Toastmaster’s International Treasurer, Alumni Board of Delta Sigma Phi Fraternity Copyright © 2008 West Austin Properties, Inc.

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West Austin Properties Page 47 Home Buyer’s Guide

Complimentary Services The following is a list of complimentary services that our company can provide to welcome you to Austin! Transportation to and from the airport. Transportation arrangements during your visit. Hotel reservations and/or recommendations for long‐term temporary lodging. Customized Relocation Guidebook filled with Austin and real estate information. Everything you always wanted to know about Austin but didn’t think to ask! Orientation and familiarization tour including schools, religious centers, shopping, restaurants and local attractions. Exclusive buyer representation available at no cost to purchaser. Home buying and rental counseling on local real estate customs and procedures, closing costs, inspections and the like. Assistance with financing programs and loan pre‐approval to give you an edge in negotiations and save you time from contract to closing. Photo tours of neighborhood homes‐‐complete with addresses, prices and amenities. Daily automated e‐mail of listings that meet your criteria. Referral services to related professionals on spouse employment, title and escrow services, insurance and marketing assistance for your current home. List of favorite area restaurants, movie theaters, jogging trails and other recreational opportunities to enjoy during your stay. Reservations for special events or recreational activities too! GPS Navigation to help you tour Austin during your free time. Moving service referral and savings.

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Testimonials & References Clients say… I have worked with Laura and Patrick on several different properties over the course of the last 10 years. Their wealth of knowledge, professionalism, attitude, and energy puts them in a class of their own. I recommend anyone moving to or within the city of Austin to work with them on finding their next home. ...Adam and Jeannette Chibib Thanks Laura and Patrick for selling our home in record time. You made each step easy and we got top dollar. On a scale of one to ten, you rank 13! ...Todd and Susan Shade My house had been on the market for six months prior to my listing it with Laura and Patrick, but thanks to her marketing techniques and advice and her accurate pricing, the house sold in less than two weeks. I also appreciated the professional way she handled the negotiation process. I highly recommend The Duggan Group at West Austin Properties. ...Alice Burns Rutledge Agents who consistently refer her business say... Laura is the consummate real estate professional ‐ very attentive to her clients' needs and extremely knowledgeable about her market. But her knowledge goes far beyond Austin, Texas. Laura stays con‐ nected with the regional, national and global real estate market conditions, and stays involved with the industry to benefit her clients. ...Brad Hanks, Real Estate Coach and Consultant Laura is the broker/owner of West Austin Properties and we really hit it off when we met in Scotts‐ dale a couple years ago. I think you'll be very comfortable with her, she's the consummate profes‐ sional and really knows the Austin market. ...Michael Moore, TTR Sotheby's International Realty It is a joy and a professional relief to refer my Dallas clients that are looking for a home in Austin to Laura Duggan. I care very much that my clients would be handled professionally by an expert on the Austin market that will truly focus on their needs. Laura always keeps me informed of their home search. And every time I get a call from my clients raving about the care Laura took and the wonder‐ ful home they found. That’s results I can depend on! ...Linda McMahon, Sr. VP Briggs‐Freeman Real Estate Copyright © 2008 West Austin Properties, Inc.

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Other Important Parts of Buying a Home

WEST AUSTIN PROPERTIES 901 S Mopac, Bldg. II, Suite 150 ● Austin, TX 78746 Direct (512) 345‐1252 ● Fax (866) 456‐3622 ● Email homes@westaustin.com

West Austin Properties Page 51 Home Buyer’s Guide

Helpful Tips on Finding Your Home Viewing Homes After your initial counseling session (either via email, phone or face‐to‐face interview), we will have a good idea of your wants, needs, price range and desired location and will enter your requirements in the Multiple Listing Service (MLS). From the many listings in inventory, we will print a list of homes tailored just for you. We will make arrangements to show you those homes that meet your criteria and that you express interest in. As you walk through the homes, feel free to open cabinets and closets. Most often, the sellers will be absent, but should they be present, they will understand your need to examine the home carefully. When a home appeals to you, make notes. It is easy to forget details. Often there will be information at the home and we will give you a copy of the MLS information on the home you are viewing. Don’t be surprised if the first home you see is the perfect one for you, and don’t be discouraged if none of those you visit the first day are what you want. We are committed to finding the house that you will call home and we will work diligently until you find it. Usually, we will be able to find the home of your dreams rather quickly from a selection of three to five homes that best fit the desires you expressed. During the Home Search… We will ♦ Discuss the benefits and drawbacks of each home in relation to your specific needs. ♦ Keep you informed on a regular basis. ♦ Check the MLS database and with other brokers daily for new listings that meet your criteria. ♦ Keep you up to date on changing financial conditions that may affect the housing market. ♦ Be available to answer your questions or to offer assistance regarding your home purchase. ♦ Discuss market trends and values relative to properties that may be of interest to you. ♦ Show you new homes as well as pre‐owned homes if you desire. ♦ Assist you with homes offered by the sellers’ themselves as For Sale By Owner (FSBO) listings. A homeowner who is trying to sell his/her home themselves is usually doing so in hopes of saving the commission. Many times a homeowner will work with an agent, even though his home is not listed, if the agent introduces the buyer to the property. If you should see a FSBO and want the advantages of our services, please let us contact the owner and set the appointment. As members of the MLS, we can show you any property. If you should see a home advertised in any media or a sign in a yard, call us so we can research the property and provide you with the details. If you want to view the home, we’d be happy to make an appointment!

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West Austin Properties Page 52 Home Buyer’s Guide

Important Points About Home Inspections After Finding Your Home The Home Inspection It’s easy to make sure that the home you’ve chosen is a smart buy. By having a home inspection, the home’s vital systems are checked. A home inspection allows you to purchase your home with confi‐ dence. We will help you schedule an inspection after you have chosen the home you like. We recom‐ mend the following minimum standards when choosing an inspector: 1. Membership in ASHI (American Society of Home Inspectors) and adherence to its Standards of Practice and Code of Ethics. 2. Written report at the time of inspection. To View an example Inspection Report click on the link, budurl.com/ExInspectReport. Your inspection report should include the following: ♦ Foundations and structures. ♦ Exterior siding, windows and doors. ♦ Exterior walls, windows and doors; porches, decks and balconies; garage. ♦ Roof—roof type and material, condition of gutters and downspouts. ♦ Interior plumbing system. ♦ Hot‐and‐cold water systems, the waste system and sewage disposal, water pressure and flow, and hot water equipment. ♦ Electrical system—type of service, the number of circuits, type of protection, outlet grounding and the load balance. ♦ Central heating and air conditioning system, energy source, type of cooling equipment, capacity and distribution. ♦ Interior walls, ceilings, floors, windows and doors. ♦ Stairways, cabinets and countertops. ♦ Attic. ♦ Structural, insulation and ventilation information. ♦ Fireplace, chimney, damper and masonry. ♦ Garage—doors, walls, floor and opener. ♦ Appliances—includes a wide range of built‐in and other home appliances, smoke detectors and television/cable hookups. ♦ Lot and landscaping. ♦ Ground slope away from foundation, condition of walks, steps and driveway. Other Inspectors may or may not need to be hired for specialty items ♦ Termites—presence of or conditions conducive to termites. ♦ Septic System. ♦ Well Water Supply. Copyright © 2008 West Austin Properties, Inc.

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West Austin Properties Page 53 Home Buyer’s Guide

Moving Preparation Checklist Moving Timeline and Checklist One month before your move □ Arrange for moving your furniture and personal belongings either by hiring a moving company or renting a truck. Get estimates from several moving companies or truck‐rental companies and be sure to obtain a hand truck (appliance dolly) if you’re moving yourself. □ Gather moving supplies: boxes, tape, rope and anything else you might need. □ Plan your travel itinerary and make transportation and lodging reservations in advance if you are driving to your new home. (Leave a copy with a friend or relative.) □ Some moving expenses are tax deductible, so you will want to save your moving‐expense receipts (if the move is employment‐related) for tax deductions, including meals, lodging and gasoline. Re‐ cord expenses incurred during your house‐hunting trips. □ Develop a plan for packing, such as packing last the things you use the most. □ Notify others of your new address: post office, charge accounts, subscriptions, relatives and friends, national and alumni organizations, church, mail order clubs, firms with which you have time payments and your past employer to make sure you receive W‐2 forms and retirement‐ account information. Save you old address labels to speed up filling out change‐of‐address forms for your new address. □ Notify federal and state taxing authorities or any governmental agency necessary. Two weeks before your move □ Notify and get refunds for your present utilities: gas, electric, water, cable and phone. Arrange for services at your new address. (Visit this website for list of utilities, budurl.com/LocalUtilities.) □ Have your car serviced if you are driving a long distance to your new home. □ Recruit people to help you on moving day. □ Arrange for someone to take care of your pets and children during the move. □ Confirm moving company or rental‐truck arrangements. One day before your move □ Keep moving materials separate so they don’t get packed until you are finished. □ Pick up rental truck if you are moving yourself. □ Fill your car up with gas and check oil and tires. For Additional Moving‐Checklist Items, Visit this website budurl.com/MovingPrepChecklist. Including Tips on : ♦ Packing ♦ Moving with Children ♦ Travel Fun and Games for Children ♦ Moving Your Pets ♦ Moving Your House Plants Copyright © 2008 West Austin Properties, Inc.

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West Austin Properties Page 54 Home Buyer’s Guide

Links of Interest, Downloadable Documents, etc. In order to keep this document as short as possible, we have decided not to include many of the documents common to a real estate transaction—contracts, disclosures, etc. This does not mean that they are not important. We highly recommend viewing these materials. Visit any of these links and it will take you to a page to easily view or download the document.

Contracts, Addenda and Disclosures Example Information About Brokerage Services Cover Letter (this is a service that sets us apart) Offer Contract Third Party Financing Addendum Seller’s Disclosure

budurl.com/IaBS budurl.com/ExCoverLetter budurl.com/ExResContact budurl.com/Ex3rdPartyFinance budurl.com/ExSellersDisc

Links found throughout this guide Our Website Our Blog Affiliate Website Designations that make a Difference Vendors Commonly Used in a Real Estate Transaction Preferred Vendors List Local Utility Companies (Electric, Water, Cable, etc.) Example Title Commitment Example Inspection Report Moving Preparation Checklist

Glossary of Terms

www.WestAustin.com www.TheHeartofAustin.com www.GlobalOwner.com budurl.com/Designations budurl.com/CommonVendors budurl.com/PreferredVendors budurl.com/LocalUtilities budurl.com/ExTitleCommit budurl.com/ExInspectReport budurl.com/MovingPrepChecklist

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