Austin Home Buyer's Guide

GUIDE TO BUYING A HOME IN AUSTIN

ELEVEN OAKS R E A LT Y

Thank you for allowing us to join you on your home buying journey. We’re excited to get started and hope you are too.

We’ve compiled this information to assist you through the process, but we don’t believe books and forms are a substitute for client service.

While you’re reading this, should you find yourself with questions, please don’t hesitate to reach out.

Sincerely, Your Eleven Oaks Realty Team

Roadmap to

Home Buying

Meet Your Eleven Oaks Realty Buying Specialist

Formalize Your Relationship with Eleven Oaks Realty

Conduct a Proactive Home Search

Identify Target Neighborhoods

Decide What You're Looking For

Select the Right Home

Make Offer

Negotiate

Inspect

Review Disclosures

Negotiate Repairs

Close Escrow

Obtain Loan Approval

Sign Agreement

Eleven Oaks Realty | www.AustinRealEstateHomesBlog.com | (512) 827-8323

Move In

Step #1: Meet Your Eleven Oaks Realty Buyer Specialist

Who We Are Eleven Oaks Realty is a family owned and operated brokerage firm based in Austin, Texas. With $200MM in transactions and over 60 years of combined experience, we’ve seen virtually everything the market has to offer. We are a team of neighborhood experts who pride themselves on delivering concierge-level service.

Meet our leadership team and you’ll understand what makes us different than any other firm in the market today.

Leadership Team Raymond Stoklosa – CRS, ABR, e-Pro Chairman and Managing Broker Raymond has been a respected authority in residential real estate since 1978. Having sold more than $150 million worth of real estate, in a variety of high-intensity markets, he possesses a noteworthy portfolio of success.

A former real estate instructor, Raymond brings a passion for education to the real estate process. With an uncompromising attention to detail, he counsels clients to a well-informed business decision. He takes particular pride in assertively negotiating for the client’s best interests.

“Real estate has changed a lot in my 35+ years, but there are some things that will never change. My clients know that they have a knowledgeable, competent negotiator working on their behalf to advance their interests. It’s this relentless pursuit of the client’s interests that we’ve worked hard to instill in all of the Realtors at Eleven Oaks Realty.”

Rebecca Williamson – CRS, ABR, SFR Chief Operating Officer Rebecca brings a passion for customer-service to the leadership team.

Having worked first in the frantic San Francisco real estate market, and relocated to Austin, she has seen first-hand the difficulties that buyers can face in hot markets like Austin.

Because of that, she has founded her success on a commitment to personalized service. Clients appreciate her dedication to not only the success of their transaction, but their very peace of mind. She is particularly adept at creating bridges to make home buying and relocation as seamless as possible.

“Buying a home locally or from afar is a stressful experience. There’s nothing worse than being left in the dark when it comes to one of your biggest decisions. That’s why I work hard to show my clients that I am just as dedicated to their home purchase as they are. We’re in constant communication so they can rest assured that their transaction is proceeding smoothly.”

Chris Williamson – CNE, ABR Chief Revenue Officer Chris began his career in 2003 in his hometown of Atlanta, Georgia and since then, has acquired a broad base of knowledge and experience in both residential sales and mortgage financing. He brings this unique combination of skills to the Eleven Oaks Realty leadership team as well as his clients – whom he helps navigate the complex transactional process in today’s ever-changing real estate market.

If you are looking to sell, there are few REALTORS® more conscientious and diligent than Chris.

As a contributing author of AustinRealEstateHomesBlog.com, he is one of the most creative agents in Austin when it comes to new, innovative marketing tactics. He’s committed to helping clients quickly sell their homes for top dollar. All the while, his reassuring demeanor and calm “can-do” attitude makes him a perfect advisor for first-time home buyers and sellers alike.

“Selling a house shouldn’t have to be a hassle. Our program generates buzz and publicity for the listing from the day it hits the market until the day it closes. We make sure to take advantage of the flurry of activity that happens when your home hits the market and coach our sellers to know what they can do to showcase their home in the best light.”

Client & Expert Testimonials A 5-star service promise

Raymond, Rebecca, and Chris took very good care of us from beginning to end (we will gladly do business with them in the future again). From their home buying class where we learned the important basics, the fun house hunt adventures, the very informative daily emails from the MLS on new homes available, the excellent advice, education, and experience they shared with us, and finally leading us to a perfect condo which was right under our noses and they celebrated with us by uncorking champagne for us! Their team’s dedication and service is out of this world! You will not find a team, and most importantly a family, who will treat you like their own!

- Ali

The team was in constant contact with us via email, phone and in person. We never felt like we were left with questions and they are always available to put in extra time to explain anything that is unclear to us. (We spent multiple hours going through the contract, line by line, so we felt comfortable about what we were doing). Looking back, buying our first home was easier than it should be. We’ve learned so much about buying a home. We are busy professionals with little time to shop on our own. Being able to do a lot of correspondence and shopping via internet was definitely a life saver.

- John & Carmen Eleven Oaks Realty was more than I could ask for! As first time home buyers, we had very little knowledge of the process, but Rebecca, Raymond, and Chris really took the time to educate us every step of the way. They stayed on top of all the minute details for us, while keeping us informed at the same time. They pretty much took care of everything! I have heard people referring to buying a home as a stressful event, but this experience has made home buying seem like a cake walk.

I feel lucky that I was able to find them for our first home purchase. I cannot recommend them enough, and will definitely be using them again when it's time - Sutton & Joab to buy a new house.

“...ask about the newest wrinkle in the real estate business the buyer’s broker...instead of representing the seller, they will work exclusively for you. That means they agree not to disclose confidential details to the seller that could affect your negotiations.”

“Buyer’s Agent...This is your best choice. A buyer’s agent has a fiduciary duty of utmost care, integrity, honesty, and loyalty to you. By selecting this option, your real estate professional rejects any legal duty of care to the seller...”

-- Smart Money: The Wall Street Journal Magazine of Personal Business

-- ”How To Buy A Home In California” NOLO Press

What We Do: Benefits of Buyer Agency

Similarly to how a seller can hire an exclusive listing agent to sell their property, buyers are also entitled to advocacy services. A buyer’s agent is an exclusive advocate for a home buyer regardless of which property they purchase. A buyer’s agent offers a full suite of helpful tools to assist with the process – going far beyond just writing the contract. Most importantly, their duty is to you – the buyer.

What’s in it For You? Best Value – Our Commission is Paid by the Seller The real estate commission is paid by the seller and included in the purchase price. The amount of commission is negotiated between the seller and the listing broker as part of their listing agreement.

It is the listing broker who then determines what commission will be paid to the buyer’s agent. The listing broker will stipulate in the MLS database the amount of commission that will be paid to the buyer’s agent responsible for the actual closing of the sale. The real estate industry and the MLS rules state that an agent must show the home to the buyer & write the contract to earn the commission.

So the buyer incurs no additional out-of-pocket costs for real estate commission when using a buyer’s agent since the full commission is paid regardless. With a buyer’s agent though, you have someone to work for your best interest only- not the seller’s.

Better Business Deal – No Conflict of Interest We assertively negotiate to get the lowest price

and best terms possible, so you’ll get more for your money. Since we only represent you, we’ll always put your interests first - no balancing, maximizing or compromising.

Time Savings – We Do the Legwork When you view homes, they will be pre-screened so you won’t waste your time previewing unsuitable homes you can’t afford or don’t match your purchase criteria. Additionally, you gain access to our home search technology, which notifies you as soon as a property matching your needs hits the market.

First-Rate Home Buying Education As they say in Texas, this isn’t our first rodeo.

Whether or not it’s yours, we’re here to answer all your questions and make sure each document is fully explained so you can make an informed purchase decision. We don’t rush you through to closing. Rather, we make sure you truly understand your transaction and are comfortable with the end result.

Your Representation Choices Before you commit to representation, we’d encourage you to read the statement explaining the representation options for buyers and sellers, tenants and landlords created by the Texas Real Estate Commission (TREC).

10-10-11 Approved by the Texas Real Estate Commission for Voluntary Use Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords.

Information About Brokerage Services

B

efore working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you.

A broker is obligated by law to treat you honestly.

intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:

IF THE BROKER REPRESENTS THE OWNER: The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written - listing agreement, or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent.

(4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property.

IF THE BROKER REPRESENTS THE BUYER: The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.

IF THE BROKER ACTS AS AN INTERMEDIARY: A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an

(1) shall treat all parties honestly; (2) may not disclose that the owner will accept a price less that the asking price unless authorized in writing to do so by the owner; (3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and

With the parties’ consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.

If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.

Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensee’s records.

Buyer, Seller, Landlord or Tenant

Date

Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 , 512-936-3000 (http://www.trec.texas.gov)

Step #2 Formalize Relationship with Eleven Oaks Realty

Easy Exit Buyer Agreement This agreement may be cancelled at any time with written notification by either party to the other party.

As your real estate professional, I (we) with Eleven Oaks Realty commit to: • Use our best efforts to locate a home that best suits your acquisition criteria as we understand it until you find a home to buy or tell us to stop looking.

• Provide market data that helps enhance your understanding of the current value of homes selling in the area.

• Commit our time and resources to further your home buying objectives while incurring our own expenses.

• Assist you in other ways that a real estate broker typically performs for a Buyer/Client.

Eleven Oaks Realty, by ________________________________________

Date _____________________

As the Buyer/Client, you agree to: • Candidly describe what you like or dislike about homes and neighborhoods you look at.

• Tell me when you want to look at a home listed by another broker, builder or For Sale by Owner.

• Be forthright if your plans change.

• Work with Eleven Oaks Realty exclusively until we find the right home unless this agreement is otherwise cancelled.

• At all times acknowledge to others that Eleven Oaks Realty is my exclusive agent.

As consideration for services as my exclusive agent, Eleven Oaks Realty may seek and obtain compensation from the seller.

Receipt of a copy of the Information about Brokerage Services brochure is acknowledged. ___________________________________________ ________________________________________________ Signature Signature

Step #3: Obtain Loan Approval

Find a Loan, then Find a Home In today’s fiercely competitive real estate market, home buyers are wise to obtain a genuine loan pre-approval (“pre-approval”) from a reputable lender before searching for a home. This loan commitment is a written promise from a lender to provide a loan up to a specified amount at a specific interest rate and duration, based on verification of the buyer’s credit worthiness and subject to an acceptable appraisal and title report. It suggests to a seller that you are ready, willing and able to purchase their home & is a strong indicator of whether or not you are a serious buyer.

Advantage of Loan Pre-Approval - Verifies the purchase price you can afford - Prepares you to make an offer on the property you wish to purchase - Expedites the buying process - Indicates to a seller that you are credit-worthy and financially prepared to purchase a home

Requirements for Pre-Approval - Completed loan application - W-2 forms and federal tax returns from the past two years - Pay stubs for the most recent 30 days - Two months of financial asset statements - Credit Report

Financial Information Reviewed in the Pre-Approval Process Cash for Closing – to ensure that you can finance the closing Credit Rating - as measured by FICO score Credit – to evaluate your credit standing based on the size of the loan Income – to certify that you can afford mortgage payments according to your income Debt - to determine impact of long-term debt obligations

It is critical to understand how the loan process works and to work with a loan professional that will educate you and help you determine the best loan product that fits your needs. Below is a list of different loan products. This is not to serve as a comprehensive list and some of the loan products may or may not be available to you. These as well as any other available options should be discussed with your loan professional.

Conventional Financing Buy and Repair Financing (FHA 203k etc.)

VA Financing State programs and/or down payment assistance programs FHA Financing Rural Development/USDA loans Additionally, it is important to work with a reputable loan professional. Below is a list of some loan professionals that our clients have used in the past and provided outstanding customer service. In many cases, we’ve used them for our own transactions. This is not a comprehensive list and there may be other loan professionals online.

Dominik Kilpatrick CMG Financial (512) 538-4966 dkilpatrick@cmgfi.com

Sherri Eckert Prime Lending (512) 293-0587 sherri@primelending.com

Matt Guley United Lending (512) 422-9788 matt.guley@ulmtg.com

Chad Bowman United Lending, VA Loans (512) 646-0800 chad@chadbowman.com

Carson Vaughn AmeriPro Funding (512) 439-7555 carson@ameriprofunding.com

Ian Craig UFCU Credit Union (512) 997-4621 ICraig@ufcu.org

Note: If you are like many of our clients, you may qualify for a loan amount in excess of your comfort zone. Knowing the maximum amount you can borrow will help you determine your absolute maximum purchase price. Then, you decide how much you want to spend for a home.

What to Ask When Loan Shopping Be sure to verify if the quoted loan interest rate reflects payment of points. A loan quote should include an interest rate, points charged and loan term.

Many loan programs allow you to receive a discounted interest rate by paying points or origination fees. One point equals 1% of the loan amount. The more points you can or wish to pay, the more you can discount your rate. Paying points is not a requirement; it’s just an option lenders offer to accommodate the immediate or long-term monthly payment concerns of mortgage customers.

List of Loan Costs The following costs may vary according to loan amount and loan program.

Interim Interest – Interest accrued on the mortgage for the days remaining in the month Origination Fee – A fee paid at the time the mortgage application is processed. Points – Each point is a fee equal to 1% of the mortgage amount.

Private Mortgage Insurance (PMI) – A premium paid by the buyer to insure the lender if the buyer is borrowing more than 80% of the appraised value of the home.

Tax and Insurance Escrows (Impounds) – Lender required funds deposited by the buyer into an escrow account, to be used by the bank to pay the next year’s taxes and insurance.

Appraisal Fee – A fee for appraising the value of the property.

Lender’s Attorney’s Fee – A fee paid to the lender’s attorney for reviewing the title to the property, resolving any title problems, coordinating closing, typing the bank papers, attending the closing, dispersing the funds at closing, & ensuring the documents are accurate & properly recorded.

Credit Report Fee – A fee for investigating the borrower’s credit rating.

Homeowner’s Insurance Policy – An insurance policy listing the lender as the loss payee. The buyer is required to bring a paid receipt for this policy to the closing. Cost will vary according to type of coverage and insurance company.

Recording Fee – A fee paid to the county clerk’s office for mortgage documentation.

Document Preparation Fee - A fee to prepare loan documents Lender’s Title Insurance – A one-time charge to the buyer for insurance that guarantees compensation if, for any reason, the title should prove to be defective (e.g., if the previous owner had a tax lien on the property).

IMPORTANT: Loan fees vary. Your Lender should provide you with a Good Faith Estimate (GFE) of your costs related to the loan. Be sure to review it carefully.

Do’s and Don’t’s of a Smooth Loan Approval Don’t’s Don’t make a major purchase (e.g. car, boat, furs, jewelry) Don’t apply for a new credit card (even if you seem pre-approved) Don’t open a new credit card Don’t transfer balances from one account to another Don’t pay charge offs without discussing it with us Do’s first Don’t pay off collections without discussing it with us Do continue making your loan payments first Do stay current on all existing accounts Don’t buy any furniture Do keep working at your present employer Don’t close any charge accounts Do keep your same insurance company Don’t change bank accounts Do continue living at your current residence Don’t max out or over charge your credit card acDo continue to sue your credit as normal counts Do call us if you have any questions Don’t consolidate your debt into 1 or 2 credit card accounts Don’t take out a new loan Don’t start any home improvement projects Don’t finance any elective medical procedures Don’t open a new cellular phone account Don’t join a new fitness club Don’t pay off any loans or credit cards without first discussing with your lender

Factors That Affect Your Fico Score The type of loan and interest rate offered you by the Lender is largely determined by your FICO score.

FICO® credit scores range between 300 and 850, with scores above 640 considered to be the minimum for obtaining most mortgages. The following factors affect your score:

1. Your payment history.

Did you pay your credit card obligations on time? If you paid late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe.

If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history.

In general, the longer you have had accounts opened, the better. The average consumer’s oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp. You may want to think twice before closing accounts you’ve had for a long time.

4. How much new credit you have.

New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use.

Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your FICO credit score, visit www.MyFICO.com as well as speak to a professional lender.

It is not advisable to contact creditors or collection agencies without first consulting with a professional lender who can guide you through the process. To obtain your free credit report allowed from each bureau each year, go to www.AnnualCreditReport.com. The three different credit bureaus and their contact information are listed below.

1-877-322-8228 www.equifaxcom

1-800-493-2392 www.transunion.com

1-888-397-3742 www.experian.com

Step #4: Decide What You’re Looking For

Buying a home is a lifestyle decision. The choices you make will directly affect how much you enjoy living in the home and how much you can sell it for when you are ready to do so. It’s helpful to create a mental picture of your new home to help narrow down your options. The questions below are designed to help you consider your options and help our team make more informed recommendations to expand your search profile.

The Basics What do you most want to change about your current housing situation?

What would prevent you from buying?

How long do you expect to live in this home?

Do you expect the size of your household to grow?

How soon do you want to move?

What tradeoffs are you willing to make?

What priority do you give to purchasing a home?

How will your life change if you don’t find a home?

What price are you willing to pay to get these?

The Neighborhood

The House Itself

What neighborhood characteristics are essential?

How important is the school district?

Which neighborhoods do you prefer?

Which of these neighborhoods can you afford?

Are you willing to live in the neighborhoods you can afford?

What features do you most desire in a home?

Which characteristics and features are not acceptable, even if all other factors are?

What three factors are considered your “must-haves”?

How large does the house need to be to fit your family, today and in the future?

Factors Impacting Your Home Buying Decision Your buying decision will in large part be driven by personal financial limitations. For any given price, there are only a limited number of factors impacting your decision:

1) Location 2) School Quality 3) Size & Style 4) Condition 5) Risk What is the Most Important Factor to Your Home Buying Decision?

Ranking your tradeoffs can help you determine where you should expand your search options:

Most

<>

Least

PRICE 1 2 3 4 5

LOCATION 1 2 3 4 5 SIZE & STYLE 1 2 3 4 5 CONDITION 1 2 3 4 5 SCHOOL QUALITY

1 2 3 4 5

RISK 1 2 3 4 5 We also remind our clients to trust their gut. Your new home often feels like your new home from the moment you step inside.

Step #5: Identify Target Neighborhoods The location of your home will alter its resale value more than any other single factor. That’s why it’s important to pick a community that will enhance not only your lifestyle, but your investment’s value.

When looking for that right balance, we recommend researching the following factors:

+ General Location

Aerial Maps

View Traffic

Tools: Google Maps, Bing Maps, AustinRealEstateHomesBlog.com Maps

Community Amenities

Research community amenities & info

Tools: AustinRealEstateHomesBlog.com Neighborhood Guides, HOA Websites

Schools

Research school performance & school districts

Tools: GreatSchools.org, SchoolDigger.com, ChildrenatRisk.org

+ Convenience

Crime

Plan your commute

Find out what there is to do locally

Examine crime statistics

Tools: Google Maps with Traffic, WalkScore, Yelp

Tools: APD, County Sheriff

Still, all the research in the world can’t substitute for personal experience. We recommend that clients drive-through and get a feel for the area. If it feels right, get out of the car and walk around.

See what appeals to you and look for what you don’t like about the neighborhood. Make a practice commute run and visit some of the local restaurants and grocery stores.

There is a high correlation between neighborhood desirability and overall satisfaction with your home. If you are uncomfortable with the neighborhood, the house doesn’t matter. You cannot change the neighborhood or the street.

Step #6: Proactively Search You’ve probably heard the stories of Austin homes selling in under 24 hours with multiple offers. In such a competitive market, it’s critical to use the latest technology to make sure you are informed of the latest homes arriving on the market.

We want your home buying experience to be enjoyable and exciting, not tedious or excessively time consuming. That’s why we consult with you to construct a profile of the features, amenities, wants and needs you desire in a home.

Then, we load the profile into an automated priority search program. This program is linked to the most complete and up-to-date database of listed properties Throughout each day, we email a password-protected list of every new and updated property that matches your criteria in real time.

You’ll get the fullest details on every property listed for sale from every licensed real estate company complete with MLS #’s, price, street addresses, maps, driving directions, pictures, school and demographic information, virtual and audio tours.

Our search tool gives you access to all homes on the market from every real estate brokerage firm in Central Texas. This unique solution is available on a computer, tablet or smart phone.

Step #7: Select the Right Home We’re often asked by our clients about resale value. While we don’t have a crystal ball, there are five key factors that affect both your enjoyment and resale value.

Regardless of price you will probably never find a home with top scores in every category. For example, if you want to be located as near as possible to your job, you may have to lower your expectation about school quality (lower ratings) or crime (higher crime rates). If you desire the highest quality public schools or prefer a planned community with all its amenities, you may have to sacrifice convenience (longer commute).

We urge you to look beyond the four walls of the home and weigh the impact of these factors when buying your home. You can always make cosmetic changes to a house, but it’s generally not possible to change these characteristics post-purchase.

Incurable Defects or Design Flaws If you buy a home in a declining neighborhood, near an undesirable landmark, next to the railroad tracks, or in a flood plain, you would not expect to pay as much for it as you would another home that are not impacted by these adverse conditions. That being the case, you should expect to sell it for less than other homes, which are absent these same defects.

Similarly, a home with an inept design, such as, an undesirable architectural style (e.g. “A-Frame”), or a functionally obsolete house (e.g. 4 bedrooms & 1 bathroom), or home built on a steep lot with a shared driveway and tall, concrete retaining walls would be worth more if these characteristics were corrected. Any design element that lacks style, proportion or beauty will detract from value.

As you weigh your options with these homes, just remember that a home is only worth as much as someone is willing to pay for it.

Non-Conventional Type Homes Today’s real estate market offers different types of homes for sale. Every buyer is not right for every type of home. Purchasing some homes involves increased levels of risk. Ask yourself how much risk and uncertainty you’re ready to assume at this stage of your life.

Short Sale: Even when a seller agrees to the buyer’s offer, the bank still has to agree and the buyer may or may not ever be able to purchase the home, longer timelines and a lot of waiting, sellers don’t have funds to do repairs, must decide to invest money in an inspection upfront so that they know the condition of the property or risk waiting until the bank approves the contract, if ever.

REO / Bank Owned: Banks use their own contracts and addenda and they are not buyer friendly; most properties are sold ‘as is’ although there can be some banks who will negotiate closing costs and repairs; the buyer may have to move twice due to possible delays with the title work and transaction.

HUD Homes:

HUD promotes housing and insures mortgages VA Repo: through the Federal Housing Administration The Department of Veterans Affairs (VA) ac(FHA). When an FHA borrower or other HUD quires properties as a result of foreclosures on insured borrower fails to make their payments, VA guaranteed loans. The properties are listed the lender may foreclose. If the lender meets by local listing agents through the local MLS the requirements, HUD may take ownership You can view properties for sale at va.equator. from the lender and sell the house through their com. Buyers must submit offers through a real HUD home sales program. Only registered HUD estate professional and the homes are sold Real estate professionals can show, adver“As Is.” Vendee financing is available on most tise and submit offers on HUD homes. Homes of these homes and allows for very favorable are secured with a master key system. Offers down payment requirements and terms. For must be submitted by a HUD registered broker the most up to date information, see the webthrough their state marketing and management site www.VA.Equator.com electronic bidding system. Original contracts must be submitted within 48 hours after acOther programs to be aware of: ceptance with signatures in blue ink to HUD’s -Freddie Mac’s REO Program called HomeSteps marketing manager. at www.HomeSteps.com -Fannie Mae’s REO Program called HomePath at www.HomePath.com

Step #8: Make Offer Once you have found a home you wish to purchase, the next step is to submit your offer to the seller. Your Eleven Oaks Realty buyer’s agent will guide and counsel you in preparing your offer, which will be delivered to the seller’s agent and then to the seller.

Terms of an Offer Some of the key terms of the offer which you must decide on are issues like: Purchase Price - The amount of money that you wish to pay for the home.

Earnest Money - The amount of good faith money that is paid when entering into the contract.

Down Payment – The amount of cash you are prepared to invest in the purchase.

Loan Contingency - The Lender’s approval and funding of your loan Appraisal Contingency - Property appraises for the purchase price Personal Property – Movable items that are not fixtures may not be included in the purchase.

Survey - identifies location of boundaries, major improvements, fence lines, drives, encroachments, easements and other items on property.

Closing Date – The date upon which you would like to take the title to the property.

Option Period - A negotiable period of time allowing the buyer the right to cancel for any reason without penalty An accepted offer is not binding to either party until the contracts have been fully signed by both parties and delivered back to the parties.

Important Provisions in the Texas Real Estate Contract As-Is In Texas, unless otherwise stated in the contract all properties are purchased in their “as-is” present condition as of the date of the contract’s execution. In layman’s language, that means what you see is what you get.

A buyer who wants specific repairs completed at the seller’s expense must state so in the contract as part of the offer process. Without a written agreement so stating, the seller is under no obligation to make any repairs.

Unknown Damage or Defects Sellers often are not aware of the true condition of every system, component or appliance in their home. Prudent buyers should not rely only on the seller property condition disclosure to determine the actual condition of the property.

Due diligence is in order. Buyers are urged to have a property thoroughly inspected by licensed professionals. Certain inspections are considered essential: General Home, Pest and Foundation Inspections.

Buyers have the right to do any & all inspections they deem necessary during the escrow period.

The Option However, buyers may not have the right to cancel or negotiate seller paid repairs unless the contract includes a Termination-Option Fee provision. This is often referred to as “the option.”

Because of possible existence of unknown damage or defects, most buyers will choose to pay a termination-option fee in exchange for the right to terminate the contract for any reason whatsoever within a negotiated number of days.

During this termination-option period, an inspection can be performed, and if specific repairs are identified, the parties can negotiate to amend the contract to address these items, or the Buyer can terminate the contract.

Absent a termination-option agreement, the Buyer has no right to terminate or negotiate repair of unknown damage or defects discovery subsequent to acceptance of the Buyer’s offer.

What You Need to Know About the Option Period The standard Texas residential real estate contract contains a termination-option fee clause. Its inclusion is a matter of agreement and negotiable between the seller and buyer.

The Option Period is a period of time during which the buyer may acquire the right to terminate the contract for any reason without penalty by paying a fee to the seller.

The Texas Real Estate Option Period: • • • • • • • • • • • •

is at the beginning of the purchase contract period is an agreed-upon number of days between the buyer and the seller ( i.e. it is negotiable) requires the Buyer’s payment of a monetary fee to acquire the option right (i.e. negotiable) the option money is non-refundable is given directly to the seller (or seller’s agent) at the beginning of the contract, usually in the form of a personal check must be delivered within 3 days, regardless of business day or weekend should not be delivered to the Title Company can be extended by mutual agreement between the buyer and the seller, for an additional option payment ( also negotiable) is commonly 5-10 days, to allow time for the property to be inspected and for repair quotes to be obtained can be shorter, or longer – depending on the circumstances and requirements of the buyer and the seller During the option period the seller cannot sell the property to anyone.

Buyer may elect to cancel the transaction at any time prior to expiration of the option period without incurring a penalty

Electronic Signatures The Texas Uniform Electronic Transactions Act allows the use of electronic records and signatures in real estate transactions. Contracts may be signed using services like DocuSign and Digital Ink.

Manually signed, hard copies of contracts are no longer required, if the parties - buyer and seller agree to conduct a transaction through electronic communications.

To facilitate a smooth and efficient flow of the documentation necessary to conduct negotiations and create a binding contract, electronic service providers expedite the process.

Step #9: Negotiate We will assertively negotiate, on your behalf, in search of the best price and terms possible and continue to do so until an agreement is reached or you tell us to stop.

Once your offer is accepted…

The acceptance date of your contract starts a time clock during which many actions and events commence. Eleven Oaks Realty will guide and advise you every step of the way.

As soon as your offer is accepted, you will need to accomplish the following tasks: • • • • • • • • •

Deliver option money to seller or seller’s agent, if required by contract Deposit earnest money with title company Provide your loan officer or mortgage broker a copy of the fully signed contract Ask your loan officer whether you need to provide any other documentation Review the Seller’s Disclosures Examine survey Contact your insurance carrier to arrange homeowner’s insurance Verify important information such as the property taxes and school jurisdiction Order inspections you desire

Step #10: Sign Agreement

Step #11: Review Disclosures Disclosure is an important aspect of home buying. One or more of the following disclosures may be pertinent to your transaction. Review the applicable disclosures and ask questions should you be uncertain of the meaning or impact of their content.

Seller Property Condition Disclosure The seller’s disclosure-notice requirements in the Texas Property Code apply to sellers of residential property comprising “not more than one dwelling unit;” however, a seller must still disclose known material defects concerning the property.

Lead Paint Required for dwellings built before 1978. First you will receive a booklet: “Protect Your Family From Lead in Your Home,” then you will receive disclosure and other applicable documents from the seller before contracts are signed, preferably during negotiations. Receipt of this information is acknowledged by signing and dating the appropriate form.

MUD (Municipal Utility District) MUD is a political subdivision of the state that’s authorized by the Texas Commission on Environmental Quality to provide water, sewage, drainage, and other services within its boundaries. The seller is required by the Texas Water Code to provide notice to a buyer that the property is located within a MUD prior to the buyer entering into a sales contract. The notice must provide information regarding the tax rate, bonded indebtedness, and fees, if any, of the MUD.

FEMA Flood Zones Listing agents ask sellers if the property is in a designated flood zone and convey information to the agent working with buyers. This information is conveyed to prospective buyers once an active interest is shown in the property. If in doubt, Federal Emergency Management Agency (FEMA) maps are viewed. Please note: the FEMA maps show areas subject to the highest risk of flooding. They do not, however, identify smaller risk zones such as small streams, risks in rural areas or floods that exceed 100 year flood levels or storm drainage problems. Additional information and flood maps are available at www.fema.gov/business/nfip/mscjumppage.shtm.

Property Owner’s Assocation Property owner’s associations, sometimes called HOA’s, have rules and regulations members of their association (home owners) must follow. Membership in some property owner’s associations is mandatory for all home owners who owner property in a specific neighborhood. Other neighbohroods have voluntary associations and some have no associations. If the property you are buying is located in a mandatory or voluntary property owner’s association, we would highly recommend you review the documents as soon as you receive them. If you don’t understand something, ask. Most importantly, make sure you can live with all the rules the association lays out as they are enforceable.

Agency Disclosure Law As a home buyer, you have choices regarding the service and representation you receive when working with an agent.

Additional information a buyer should be aware of is to be found on the document entitled General Information and Notice to a Buyer, which will be provided by your Eleven Oaks Realty specialist.

Step #12: Inspect In Texas, home inspectors must be licensed by the Texas Real Estate Commission. It is very important to conduct a thorough inspection of your prospective home as soon as possible once your offer has been accepted. If you are purchasing a home that requires significant renovations, multiple inspections may be needed to assess the current condition of the property. Below are some helpful tips on how to get the most out of your inspections.

Attend the Inspection Schedule the inspections when you can be present, however inspections companies typically work business hours 8AM-5PM; M-F). You will learn a great deal about the house and be able to ask questions of the inspector to clarify areas of uncertainty. As you become familiar with your prospective new home, you’ll be better able to evaluate its present condition, and decide what repairs will be needed.

Read Inspection Reports Carefully When you get the report, read it carefully. If you have any questions, contact the inspector directly. Don’t be afraid to ask when you don’t understand something.

General Home Inspection We recommend starting with a general home inspector, who will act similarly to your primary care physician. They’ll take a general look at the house, point out areas of concern and recommend further evaluation if necessary. Often, the general home inspection is all you will need. But, sometimes you need a specialist to further evaluate certain areas of the home.

Other Inspections to Consider The following is a list of potential inspections you may wish to consider. Not every home needs every inspection on the list. Work with your Eleven Oaks Realty Buyer’s Specialist to determine which inspections are necessary for your home.

Pest and Termite – Another high priority inspection, a pest and termite inspection should be performed for the presence of all forms of wood-destructive insects in the home and outbuildings.

The inspection report should contain a certificate of non-infestation, or information detailing existing damage and recommended treatment.

Foundation - This inspection will assess settlement issues. Given the expansive soil conditions in central Texas,a foundation inspection is prudent if any signs of movement are apparent.

Septic and Leach Fields – A visual inspection of the septic system or dye test should be performed by a licensed septic inspector. Since septic systems require routine maintenance, be sure to find out when the system was last pumped out and its condition at that time.

Engineering – This inspection will assess the major structural elements of the home, outbuildings, and pool, as well as the heating, air conditioning, plumbing, and electrical systems. Asbestos – This mineral fiber was once used for insulation and fire protection.

Asbestos - Fibers released into the air may pose a health hazard. Asbestos containing materials in good condition, such as that in ceiling tiles, may not need to be removed, but instead covered and sealed. Any work performed on asbestos must be done by a trained and licensed contractor.

Carbon Monoxide – This odorless, colorless, and tasteless gas can be fatal if inhaled at sufficient levels. Carbon monoxide in the home is produced from fuel-burning sources such as gas, oil, or wood-fired heating systems. Each home is required by law to have at least one operable carbon monoxide detector on the lowest bedroom level. Compliance will be affirmed at the closing.

FEMA Flood Zone – The Federal Emergency Management Agency (FEMA) has generated maps based on flood risk assessments. Information on your area, including local maps and rates, is available at www.floodsmart.gov.

Lead Paint – Paint chips or dust from deteriorating lead paint are toxic and can cause lead poisoning when inhaled or ingested. If the home was built before 1978, the seller must complete a lead paint disclosure form, which will be signed by the buyer acknowledging receipt of the disclosure. A lead disclosure booklet endorsed by the EPA will also be provided to both parties.

Radon – While rare in the Austin metropolitan area, this invisible, odorless and slightly radioactive gas can seep into a house from soil and rock below the home’s foundation. Prolonged exposure to high levels of radon can pose a health hazard. In most cases, if radon is detected, steps can be taken to remedy the problem.

Smoke Detector – Confirmation of functioning smoke detectors and compliance with local regulations will be provided by the seller.

Water & Wells – A laboratory analysis will test the quality of the water. This is especially important for homes that have well water. Another test may be performed to determine the capacity and working condition of the well when existing.

Questions to Ask the Home Inspector Before you make your final buying decision, you should have the home inspected by a professional. An inspection can alert you to potential problems with a property and allow you to make an informed decision. Ask these questions to prospective home inspectors: 1. Will your inspection meet recognized standards?

Ask whether the inspection and the inspection report will meet all state requirements and comply with a well-recognized standard of practice and code of ethics, such as the one adopted by the American Society of Home Inspectors or the National Association of Home Inspectors. Customers can view each group’s standards of practice and code of ethics online at www.ashi.org or www. nahi.org. ASHI’s Web site also provides a database of state regulations.

2. Do you belong to a professional home inspector association?

There are many state and national associations for home inspectors, including the two groups mentioned above. Unfortunately, some groups give questionable credentials or certifications in return for nothing more than a fee. Insist on working with an inspector who is a member of a reputable, nonprofit trade organization.

3. How experienced are you?

Ask how long the inspector has been in the profession and how many inspections they’ve completed. They should provide customer referrals on request.

4. How do you keep your expertise up to date?

Inspectors’ commitment to continuing education is a good measure of their professionalism and service. Advanced knowledge is especially important in cases in which a home is older or includes unique elements requiring additional or updated training.

5. Do you focus on residential inspection?

Make sure the inspector has training and experience in the unique discipline of home inspection, which is very different from inspecting commercial buildings or a new construction home.

6. How long will the inspection take?

On average, an inspector working alone inspects a typical single-family house in two to three hours; anything significantly less may not be thorough.

7. What’s the cost?

Costs can vary dramatically, depending on your region, the size and age of the house, and the scope of services. The national average for single-family homes is about $320, but customers with large homes can expect to pay more. Customers should be wary of deals that seem too good to be true.

8. What type of inspection report do you provide?

Ask to see samples to determine whether you will understand the inspector’s reporting style.

Most inspectors provide their full detailed report complete with pictures within 24 hours of the inspection.

Step #13: Negotiate Repairs, if any, Consider Warranties In addition to negotiating repairs, you may also consider a home warranty.

A Home Warranty (aka Residential Service Contract) is a contract providing for the repair or replacement of certain systems or appliances that fail due to the normal use during the term of the contract.

The Home Warranty differs from insurance in that it does not insure against losses. The warranty covers only those items specified in the service contract that need repair or replacement due to normal use.

Standard coverage in Texas typically includes the plumbing, electrical system, heating and air conditioning systems, kitchen appliances, water heater and garage door opener.

In Texas, annual contract fees range from $370 to $400 for standard coverage. Most service providers do offer upgrades or optional coverage for additional fees.

Items such as swimming pools, spas, washers, dryers and refrigerators are usually optional.

Generally, a residential service provider charges a flat fee for a service request usually between $65 to $100 per request.

Note: They are not a comprehensive warranty; warranty companies cannot re-build your home for a few hundred dollars. Before buying, be sure to understand the limitations of the coverage. Every item in the home is not covered. Only those items specified in the contract are covered. Preexisting conditions, modifications and code upgrades often arenâ&#x20AC;&#x2122;t covered.

Step #14: Close Escrow At the closing, you complete the purchase of your new home. The title to the property is legally transferred from the seller to you, the buyer. For many people, close of escrow is a mysterious process, but it doesn’t have to be. A title company is tasked with the responsibility to manage this part of the transaction and generate documentation to transfer the rights of ownership from the seller to the buyer. An escrow officer will meet with you to answer your questions about the process and explain the documentation.

Who chooses the title services company?

Usually the party who pays for the title insurance policy pays for its costs. In Austin, it’s customary, but not mandatory, for the seller to pay for the Owner’s Title Insurance Policy. The Buyer pays for the Lender’s Title Insurance Policy.

Why do you need title insurance?

When you purchase a home, title insurance protects you from financial loss due to defects in real property ownership, including forged instruments, missing heirs, undisclosed but recorded liens, or adverse possession claims. Title insurance also pays for legal defense costs to protect your interests. In addition to the owner’s title policy, all mortgage lenders require that home buyers purchase title insurance in the amount of the mortgage.

Once all of the contingencies have been satisfied and loan documents are received by the title company, the title company will prepare a preliminary closing statement with information pertaining to your closing costs and payment instructions.

At closing, you will receive a settlement statement (e.g. HUD-1) and title insurance policy prepared by the title company as well as Loan Documents and a Truth in Lending Statement prepared by the lender..

Eleven Oaks Realty, in concert with your lender and escrow officer, will coordinate date, time, and location of your closing. We will attend the closing to answer any questions you may have about the real estate aspects of the transaction.

To facilitate a smooth close of escrow, plan on providing your closing officer with the following: Homeowner’s Insurance Information about your insurance carrier of choice including the name of the company and agent, telephone number and email address.

Certified Funds The Texas Department of Insurance requires certified funds at closing. Your closing cost must be in the form of a cashier’s check, certified check or wired funds. All checks should be made payable to the title company. No cash is accepted. The title company will provide an estimated closing statement prior to closing with the amount of your cost.

Wired Funds If you desire to fund your transaction electronically, wiring instructions will be provided by the title company upon request. Allow 72-hours for receipt of funds.

Identification An official photo ID (e.g. Driver’s License, Passport) must be shown to the closing officer to confirm your identity.

Reviewing the Documents If you wish to examine your loan documents prior to closing, please request that your lender provide documents to the title company at least one day early.

Matters of Special Attention Power of Attorney If you will not be present and intend to use a Power of Attorney, you must provide the original executed Power of Attorney to your closing officer prior to closing for approval and recording of the document. If you are getting a loan, the lender will need to prepare the power of attorney, so be sure to mention as early as possible that you will need a power of attorney. On the day of closing, the title company will need to reach you to verify that you are alive and well and have not revoked the Power of Attorney.

Mobile Notary Service If you are unable to physically attend the closing, you have the option of signing closing documents by mobile notary. The mobile notary can come to you, anywhere in the world, provided they know where you will be. Alert your escrow office as early in the process as possible so they can coordinate. Also, provide a contact phone number and email address in case the closing officer needs to reach you. You will need to sign papers in front of the mobile notary just as you would in front of the escrow officer.

Invoices All bills for inspections, repairs or other items to be paid at closing must be provided prior to closing.

Termite Certificate If required by your lender or by contract, please verify that the termite certificate has been received by the title officer.

Note: Be sure not to change any of your financials without checking with your lender first. This includes paying off credit cards or charging new items like new furniture and appliances!

Common Closing Costs

Youâ&#x20AC;&#x2122;ll likely be responsible for a variety of fees charged by third parties involved in the process.

Your lender must provide a good-faith estimate (GFE) of all settlement costs and the title company will prepare documents necessary to close the transaction.

Typically buyers (borrowers) pay all lender related fees and charges, as well as any fees incurred as part of the inspection process. Title and escrow related fees are usually allocated by custom subject to negotiation.

Typical Buyers’ Closing Costs Buyer’s Charges Loan Purchase Cash Purchase Buyer’s Down Payment

0-25% (or more)

100%

Appraisal Fee

$400-$800

N/A

Attorney’s Fee

$175-$250

$175-$250

Credit Report

$25-$50

N/A

Discount Points

0-2% Loan Amount

N/A

Escrow Fee

$250-$300

$250-$300

HOA Transfer Fee

$100-$700

$100-$700

Hazard Insurance 12 Month Premium ($400-$2,000+)

If Requested

Lender Required Impoounds

3-9 Months Insurance & Taxes N/A

Lender’s Title Policy (T19)

$175-$500

N/A

Origination Fee

0-2% of Loan Amount

N/A

Notary Service $125-$200 $125-$200 Recording Fee

$110-$150

$50-$75

Overnight Delivery Messenger

$450-$50

N/A

Survey $300-$600 If Requested Buyer’s Inspections

$350-$1,000

$350-$1,000

Owner’s Title Insurance Premium

0.50-1% Purchase Price

0.50-1% Purchase Price

Elevation Certificate $300-$500 $350-$500 *Not Required *Not Required

*Note: Closing costs in the above chart are merely estimates for budgeting purposes. All closing costs are negotiable and vary by lender and property.

Step #15: Move In You have found your new home, you and the seller have signed the contract, youâ&#x20AC;&#x2122;ve obtained final loan approval and your closing date has been set. Now itâ&#x20AC;&#x2122;s time to prepare for the biggest job of all - moving.

Getting started early will help things run a bit more smoothly. It can be quite overwhelming when you realize the amount of things youâ&#x20AC;&#x2122;ve accumulated over the years. To help keep some of the costs and hassles of moving to a minimum, it is a good idea to consider having a garage sale or even donating some items to charity. Here is a list of to-dos and the time frame in which you should consider completing them once you have contracted with the professional moving company of your choice.

2 Weeks before Moving Day Clean out closets and storage space, discard or sell any unnecessary possessions.

Make a game plan. Start compiling a list of items that can be boxed up early and items that need to wait for moving day.

Contact utility companies with date to start service.

1 Week before Moving Day Prepare moving essentials. Set aside important documents, personal items, prescription medications and other items that need to remain with you during the move.

Drain fuel from gas powered equipment Begin packing home decorations, unneeded kitchen items, clothing and linens.

2-3 Days before Moving Day Defrost freezer and empty ice maker Clean refrigerator, stovetop and oven Disassemble beds Moving Day Finish any remaining packing Change address on driverâ&#x20AC;&#x2122;s license, auto registration, bank accounts, credit cards, magazine subscriptions and post office.

Contact your childrenâ&#x20AC;&#x2122;s school and family doctor to prepare any records to be transferred.

Ready to Get Started with Your Home Search?

Home Buyer Hotline: (512) 827-8323 Prefer Email? info@11OaksRealty.com

Appendix

Glossary Real estate is like learning a whole new language! Below are terms you should know as you go through the real estate process.

Adjustable-Rate Mortgage - A mortgage with an interest rate that changes based on a specific index, after a predetermined number of years.

Amortization Schedule - A timetable showing the amount of each mortgage payment applied to interest and principal and the remaining balance after payment is made.

Appraisal- A qualified appraiser’s written analysis of the estimated value of a property.

Attorney’s Fees- If the lender requires an attorney to draw up any of the settlement documents, you may be charged a fee.

Capital Gains - The profit obtained from the sale of an asset, such as real estate.

Certificate of Title - A statement provided by a title company or attorney stating that the title to real estate is legally held by the current owner.

Closing Costs – Expenses incidental to a sale of real estate; such as loan fees, title fees, appraisal fees, attorney fees, etc.

Deed- The legal document conveying title to a property.

Earnest Money - Earnest money is a deposit paid to a seller to show you are serious about buying a house. If you buy the home, the earnest money is applied to your down payment. If not, the earnest money is returned, minus expenses, provided the contract allows.

Escrow Fees - Escrow involves having a third party hold funds and/or documents until you and the seller complete settlement. Money in the account may be used to pay taxes, insurance and other regular assessments as they fall due.

Good-Faith Estimate -GFE An estimate of closing costs associated with the purchase of your home.

Home Inspection- A thorough examination that evaluates the condition of a property.

Home Warranty - A guarantee for mechanical systems and appliances against repairs not covered by homeowners insurance.

Lock-In - A lender’s written guarantee of a specified interest rate if a mortgage is closed within a set period of time.

Loan Origination Fee - A lender will charge a fee for the cost of processing the loan.

Loan Discount Points - The largest of your settlement cost may be the points lenders require to make the yield on your loan more profitable. A point is one percent on your loan amount. Points are tax deductible if they are paid separately and not deducted from the loan amount.

Loan to Value - The ratio of the amount of a mortgage loan to the appraised value or sales price of the property mortgaged.

Mortgage Insurance - A contract that insures the lender against loss caused by a borrowerâ&#x20AC;&#x2122;s default on a mortgage.

PITI - Principal, Interest, Taxes and Insurance: four components of a monthly payment on mortgage loans.

Prime Rate - The interest rate that banks charge to their preferred customers.

Property Survey Fee- You may have to pay to have your lot surveyed, especially if there is a question about the boundaries.

Recording Fee - Since the title is changing hands, the transaction must be recorded with your city, county, or other appropriate branch of government.

Sales Contract - Known as a purchase agreement, the legal document that details the price and terms of the property sale between a seller and a buyer.

Settlement Statement - A document prepared by a broker, escrow company, or lender detailing the complete breakdown of the costs and disbursements in a real estate transaction.

Title Search - A check of public records to ensure that the seller is the legal owner of the property being sold and that there are no liens or other claims against the property.

Title Insurance - Insurance to guard against a faulty title search as well as hazards that might not be revealed in the search.

Truth in Lending - A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage.

Underwriting - The lenderâ&#x20AC;&#x2122;s process of evaluating a loan application to determine the risk of providing the applicant the requested funds.

Contract Concerning EQUAL HOUSING OPPORTUNITY

Page of 9

(Address of Property) PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)

4-28-2014

ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE) NOTICE: Not For Use For Condominium Transactions

1. PARTIES: The parties to this contract are (Seller) and (Buyer).

Seller agrees to sell and convey to Buyer and Buyer agrees to buy from Seller the Property defined below.

2. PROPERTY: The land, improvements and accessories are collectively referred to as the “Property”.

A. LAND: Lot Block , Addition, City of , County of , Texas, known as (address/zip code), or as described on attached exhibit.

B. IMPROVEMENTS: The house, garage and all other fixtures and improvements attached to the above-described real property, including without limitation, the following permanently installed and built-in items, if any: all equipment and appliances, valances, screens, shutters, awnings, wall-to-wall carpeting, mirrors, ceiling fans, attic fans, mail boxes, television antennas, mounts and brackets for televisions and speakers, heating and air-conditioning units, security and fire detection equipment, wiring, plumbing and lighting fixtures, chandeliers, water softener system, kitchen equipment, garage door openers, cleaning equipment, shrubbery, landscaping, outdoor cooking equipment, and all other property owned by Seller and attached to the above described real property.

C. ACCESSORIES: The following described related accessories, if any: window air conditioning units, stove, fireplace screens, curtains and rods, blinds, window shades, draperies and rods, door keys, mailbox keys, above ground pool, swimming pool equipment and maintenance accessories, artificial fireplace logs, and controls for: (i) garage doors, (ii) entry gates, and (iii) other improvements and accessories.

D. EXCLUSIONS: The following improvements and accessories will be retained by Seller and must be removed prior to delivery of possession: .

3. SALES PRICE: A. Cash portion of Sales Price payable by Buyer at closing .............................. $ B. Sum of all financing described below (excluding any loan funding fee or mortgage insurance premium) ...................................................... $ C. Sales Price (Sum of A and B) ................................................................... $ 4. FINANCING (Not for use with reverse mortgage financing): The portion of Sales Price not payable in cash will be paid as follows: (Check applicable boxes below)  A.THIRD PARTY FINANCING: One or more third party mortgage loans in the total amount of $_______ (excluding any loan funding fee or mortgage insurance premium).

(1) Property Approval: If the Property does not satisfy the lenders' underwriting requirements for the loan(s) (including, but not limited to appraisal, insurability and lender required repairs), Buyer may terminate this contract by giving notice to Seller prior to closing and the earnest money will be refunded to Buyer.

(2) Credit Approval: (Check one box only)  (a) This contract is subject to Buyer being approved for the financing described in the attached Third Party Financing Addendum for Credit Approval.  (b) This contract is not subject to Buyer being approved for financing and does not involve FHA or VA financing.  B. ASSUMPTION: The assumption of the unpaid principal balance of one or more promissory notes described in the attached TREC Loan Assumption Addendum.  C. SELLER FINANCING: A promissory note from Buyer to Seller of $ , secured by vendor's and deed of trust liens, and containing the terms and conditions described in the attached TREC Seller Financing Addendum. If an owner policy of title insurance is furnished, Buyer shall furnish Seller with a mortgagee policy of title insurance.

Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

(Address of Property)

Page 2 of 9

4-28-2014

5. EARNEST MONEY: Upon execution of this contract by all parties, Buyer shall deposit $ as earnest money with , as escrow agent, at (address). Buyer shall deposit additional earnest money of $ with escrow agent within days after the effective date of this contract. If Buyer fails to deposit the earnest money as required by this contract, Buyer will be in default.

6. TITLE POLICY AND SURVEY: A. TITLE POLICY: Seller shall furnish to Buyer at  Seller’s  Buyer’s expense an owner policy of title insurance (Title Policy) issued by (Title Company) in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under the provisions of the Title Policy, subject to the promulgated exclusions (including existing building and zoning ordinances) and the following exceptions: (1) Restrictive covenants common to the platted subdivision in which the Property is located.

(2) The standard printed exception for standby fees, taxes and assessments.

(3) Liens created as part of the financing described in Paragraph 4.

(4) Utility easements created by the dedication deed or plat of the subdivision in which the Property is located.

(5) Reservations or exceptions otherwise permitted by this contract or as may be approved

by Buyer in writing.

(6) The standard printed exception as to marital rights.

(7) The standard printed exception as to waters, tidelands, beaches, streams, and related matters.

(8) The standard printed exception as to discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements: (i) will not be amended or deleted from the title policy; (ii) will be amended to read, "shortages in area" at the expense of Buyer Seller.

B. COMMITMENT: Within 20 days after the Title Company receives a copy of this contract, Seller shall furnish to Buyer a commitment for title insurance (Commitment) and, at Buyer's expense, legible copies of restrictive covenants and documents evidencing exceptions in the Commitment (Exception Documents) other than the standard printed exceptions. Seller authorizes the Title Company to deliver the Commitment and Exception Documents to Buyer at Buyer's address shown in Paragraph 21. If the Commitment and Exception Documents are not delivered to Buyer within the specified time, the time for delivery will be automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier. If, due to factors beyond Seller’s control, the Commitment and Exception Documents are not delivered within the time required, Buyer may terminate this contract and the earnest money will be refunded to Buyer.

C. SURVEY: The survey must be made by a registered professional land surveyor acceptable to the Title Company and Buyer’s lender(s). (Check one box only) (1) Within days after the effective date of this contract, Seller shall furnish to Buyer and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit). If Seller fails to furnish the existing survey or affidavit within the time prescribed, Buyer shall obtain a new survey at Seller's expense no later than 3 days prior to Closing Date. If the existing survey or affidavit is not acceptable to Title Company or Buyer's lender(s), Buyer shall obtain a new survey at Seller's Buyer's expense no later than 3 days prior to Closing Date. (2) Within days after the effective date of this contract, Buyer shall obtain a new survey at Buyer's expense. Buyer is deemed to receive the survey on the date of actual receipt or the date specified in this paragraph, whichever is earlier. (3) Within _ days after the effective date of this contract, Seller, at Seller's expense shall furnish a new survey to Buyer.

D. OBJECTIONS: Buyer may object in writing to defects, exceptions, or encumbrances to title: disclosed on the survey other than items 6A(1) through (7) above; disclosed in the Commitment other than items 6A(1) through (8) above; or which prohibit the following use or activity: .

Buyer must object the earlier of (i) the Closing Date or (ii) _ days after Buyer receives the Commitment, Exception Documents, and the survey. Buyer’s failure to object within the time allowed will constitute a waiver of Buyer’s right to object; except that the requirements in Schedule C of the Commitment are not waived by Buyer. Provided Seller is not obligated to incur any expense, Seller shall cure the timely objections of Buyer or any third party lender Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

(Address of Property)

Page 3 of 9

4-28-2014

within 15 days after Seller receives the objections and the Closing Date will be extended as necessary. If objections are not cured within such 15 day period, this contract will terminate and the earnest money will be refunded to Buyer unless Buyer waives the objections.

E. TITLE NOTICES: (1) ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering the Property examined by an attorney of Buyer’s selection, or Buyer should be furnished with or obtain a Title Policy. If a Title Policy is furnished, the Commitment should be promptly reviewed by an attorney of Buyer’s choice due to the time limitations on Buyer’s right to object.

(2) MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S): The Property is is not subject to mandatory membership in a property owners association(s). If the Property is subject to mandatory membership in a property owners association(s), Seller notifies Buyer under §5.012, Texas Property Code, that, as a purchaser of property in the residential community identified in Paragraph 2A in which the Property is located, you are obligated to be a member of the property owners association(s). Restrictive covenants governing the use and occupancy of the Property and all dedicatory instruments governing the establishment, maintenance, or operation of this residential community have been or will be recorded in the Real Property Records of the county in which the Property is located.

Copies of the restrictive covenants and dedicatory instruments may be obtained from the county clerk. You are obligated to pay assessments to the property owners association(s). The amount of the assessments is subject to change. Your failure to pay the assessments could result in enforcement of the association’s lien on and the foreclosure of the Property.

Section 207.003, Property Code, entitles an owner to receive copies of any document that governs the establishment, maintenance, or operation of a subdivision, including, but not limited to, restrictions, bylaws, rules and regulations, and a resale certificate from a property owners' association. A resale certificate contains information including, but not limited to, statements specifying the amount and frequency of regular assessments and the style and cause number of lawsuits to which the property owners' association is a party, other than lawsuits relating to unpaid ad valorem taxes of an individual member of the association. These documents must be made available to you by the property owners' association or the association's agent on your request.

If Buyer is concerned about these matters, the TREC promulgated Addendum for Property Subject to Mandatory Membership in a Property Owners Association(s) should be used.

(3) STATUTORY TAX DISTRICTS: If the Property is situated in a utility or other statutorily created district providing water, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fee of the district prior to final execution of this contract.

(4) TIDE WATERS: If the Property abuts the tidally influenced waters of the state, §33.135, Texas Natural Resources Code, requires a notice regarding coastal area property to be included in the contract. An addendum containing the notice promulgated by TREC or required by the parties must be used.

(5) ANNEXATION: If the Property is located outside the limits of a municipality, Seller notifies Buyer under §5.011, Texas Property Code, that the Property may now or later be included in the extraterritorial jurisdiction of a municipality and may now or later be subject to annexation by the municipality. Each municipality maintains a map that depicts its boundaries and extraterritorial jurisdiction. To determine if the Property is located within a municipality’s extraterritorial jurisdiction or is likely to be located within a municipality’s extraterritorial jurisdiction, contact all municipalities located in the general proximity of the Property for further information.

(6) PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE PROVIDER: Notice required by §13.257, Water Code: The real property, described in Paragraph 2, that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area. If your property is located in a certificated area there may be special costs or charges that you will be required to pay before you can receive water or sewer service. There may be a period required to construct lines or other facilities necessary to provide water or sewer service to your property. You are advised to determine if the property is in a certificated area and contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property. The undersigned Buyer hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in Paragraph 2 or at closing of purchase of the real property.

Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

(Address of Property)

Page 4 of 9

4-28-2014

(7) PUBLIC IMPROVEMENT DISTRICTS: If the Property is in a public improvement district, §5.014, Property Code, requires Seller to notify Buyer as follows: As a purchaser of this parcel of real property you are obligated to pay an assessment to a municipality or county for an improvement project undertaken by a public improvement district under Chapter 372, Local Government Code. The assessment may be due annually or in periodic installments. More information concerning the amount of the assessment and the due dates of that assessment may be obtained from the municipality or county levying the assessment. The amount of the assessments is subject to change. Your failure to pay the assessments could result in a lien on and the foreclosure of your property.

(8) TRANSFER FEES: If the Property is subject to a private transfer fee obligation, §5.205, Property Code, requires Seller to notify Buyer as follows: The private transfer fee obligation may be governed by Chapter 5, Subchapter G of the Texas Property Code.

(9) PROPANE GAS SYSTEM SERVICE AREA: If the Property is located in a propane gas system service area owned by a distribution system retailer, Seller must give Buyer written notice as required by §141.010, Texas Utilities Code. An addendum containing the notice approved by TREC or required by the parties should be used.

7. PROPERTY CONDITION: A. ACCESS, INSPECTIONS AND UTILITIES: Seller shall permit Buyer and Buyer’s agents access to the Property at reasonable times. Buyer may have the Property inspected by inspectors selected by Buyer and licensed by TREC or otherwise permitted by law to make inspections.

Seller at Seller's expense shall immediately cause existing utilities to be turned on and shall keep the utilities on during the time this contract is in effect.

B. SELLER'S DISCLOSURE NOTICE PURSUANT TO §5.008, TEXAS PROPERTY CODE (Notice): (Check one box only)  (1) Buyer has received the Notice.  (2) Buyer has not received the Notice. Within days after the effective date of this contract, Seller shall deliver the Notice to Buyer. If Buyer does not receive the Notice, Buyer may terminate this contract at any time prior to the closing and the earnest money will be refunded to Buyer. If Seller delivers the Notice, Buyer may terminate this contract for any reason within 7 days after Buyer receives the Notice or prior to the closing, whichever first occurs, and the earnest money will be refunded to Buyer.  (3)The Seller is not required to furnish the notice under the Texas Property Code.

C. SELLER’S DISCLOSURE OF LEAD-BASED PAINT AND LEAD-BASED PAINT HAZARDS is required by Federal law for a residential dwelling constructed prior to 1978.

D. ACCEPTANCE OF PROPERTY CONDITION: “As Is” means the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract. Buyer’s agreement to accept the Property As Is under Paragraph 7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any.

(Check one box only)  (1) Buyer accepts the Property As Is.  (2) Buyer accepts the Property As Is provided Seller, at Seller’s expense, shall complete the following specific repairs and treatments: .

(Do not insert general phrases, such as “subject to inspections” that do not identify specific repairs and treatments.)

E. LENDER REQUIRED REPAIRS AND TREATMENTS: Unless otherwise agreed in writing, neither party is obligated to pay for lender required repairs, which includes treatment for wood destroying insects. If the parties do not agree to pay for the lender required repairs or treatments, this contract will terminate and the earnest money will be refunded to Buyer. If the cost of lender required repairs and treatments exceeds 5% of the Sales Price, Buyer may terminate this contract and the earnest money will be refunded to Buyer.

F. COMPLETION OF REPAIRS AND TREATMENTS: Unless otherwise agreed in writing: (i) Seller shall complete all agreed repairs and treatments prior to the Closing Date; and (ii) all required permits must be obtained, and repairs and treatments must be performed by persons who are licensed to provide such repairs or treatments or, if no license is required by law, are commercially engaged in the trade of providing such repairs or treatments. At Buyer’s election, any transferable warranties received by Seller with respect to the repairs and treatments will be transferred to Buyer at Buyer’s expense. If Seller fails to complete any agreed repairs and treatments prior to the Closing Date, Buyer may exercise remedies under Paragraph 15 or extend the Closing Date up to 5 days if necessary for Seller to complete the repairs and treatments.

G. ENVIRONMENTAL MATTERS: Buyer is advised that the presence of wetlands, toxic substances, including asbestos and wastes or other environmental hazards, or the presence of a threatened or endangered species or its habitat may affect Buyer’s intended use of the Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

(Address of Property)

Page 5 of 9

4-28-2014

Property. If Buyer is concerned about these matters, an addendum promulgated by TREC or required by the parties should be used.

H. RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a residential service company licensed by TREC. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing for the cost of the residential service contract in an amount not exceeding $ . Buyer should review any residential service contract for the scope of coverage, exclusions and limitations. The purchase of a residential service contract is optional. Similar coverage may be purchased from various companies authorized to do business in Texas.

8. BROKERS' FEES: All obligations of the parties for payment of brokers’ fees are contained in separate written agreements.

9. CLOSING: A. The closing of the sale will be on or before , 20 , or within 7 days after objections made under Paragraph 6D have been cured or waived, whichever date is later (Closing Date). If either party fails to close the sale by the Closing Date, the nondefaulting party may exercise the remedies contained in Paragraph 15.

B. At closing: (1) Seller shall execute and deliver a general warranty deed conveying title to the Property to Buyer and showing no additional exceptions to those permitted in Paragraph 6 and furnish tax statements or certificates showing no delinquent taxes on the Property.

(2) Buyer shall pay the Sales Price in good funds acceptable to the escrow agent.

(3) Seller and Buyer shall execute and deliver any notices, statements, certificates, affidavits, releases, loan documents and other documents reasonably required for the closing of the sale and the issuance of the Title Policy.

(4) There will be no liens, assessments, or security interests against the Property which will not be satisfied out of the sales proceeds unless securing the payment of any loans assumed by Buyer and assumed loans will not be in default.

(5)If the Property is subject to a residential lease, Seller shall transfer security deposits (as defined under §92.102, Property Code), if any, to Buyer. In such an event, Buyer shall deliver to the tenant a signed statement acknowledging that the Buyer has received the security deposit and is responsible for the return of the security deposit, and specifying the exact dollar amount of the security deposit.

10.POSSESSION: A Buyer’s Possession: Seller shall deliver to Buyer possession of the Property in its present or required condition, ordinary wear and tear excepted: upon closing and funding according to a temporary residential lease form promulgated by TREC or other written lease required by the parties. Any possession by Buyer prior to closing or by Seller after closing which is not authorized by a written lease will establish a tenancy at sufferance relationship between the parties. Consult your insurance agent prior to change of ownership and possession because insurance coverage may be limited or terminated. The absence of a written lease or appropriate insurance coverage may expose the parties to economic loss.

B. Leases: (1)After the Effective Date, Seller may not execute any lease (including but not limited to mineral leases) or convey any interest in the Property without Buyer’s written consent.

(2) If the Property is subject to any lease to which Seller is a party, Seller shall deliver to Buyer copies of the lease(s) and any move-in condition form signed by the tenant within 7 days after the Effective Date of the contract.

11. SPECIAL PROVISIONS: (Insert only factual statements and business details applicable to the sale. TREC rules prohibit licensees from adding factual statements or business details for which a contract addendum, lease or other form has been promulgated by TREC for mandatory use.)

12. SETTLEMENT AND OTHER EXPENSES: A. The following expenses must be paid at or prior to closing: (1) Expenses payable by Seller (Seller's Expenses): (a) Releases of existing liens, including prepayment penalties and recording fees; release of Seller’s loan liability; tax statements or certificates; preparation of deed; one-half of escrow fee; and other expenses payable by Seller under this contract. (b) Seller shall also pay an amount not to exceed $ to be applied in the Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

13.

14.

15.

16.

17.

(Address of Property)

Page 6 of 9

4-28-2014

following order: Buyer’s Expenses which Buyer is prohibited from paying by FHA, VA, Texas Veterans Land Board or other governmental loan programs, and then to other Buyer’s Expenses as allowed by the lender.

(2) Expenses payable by Buyer (Buyer's Expenses): Appraisal fees; loan application fees; adjusted origination charges; credit reports; preparation of loan documents; interest on the notes from date of disbursement to one month prior to dates of first monthly payments; recording fees; copies of easements and restrictions; loan title policy with endorsements required by lender; loan-related inspection fees; photos; amortization schedules; one-half of escrow fee; all prepaid items, including required premiums for flood and hazard insurance, reserve deposits for insurance, ad valorem taxes and special governmental assessments; final compliance inspection; courier fee; repair inspection; underwriting fee; wire transfer fee; expenses incident to any loan; Private Mortgage Insurance Premium (PMI), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the lender; and other expenses payable by Buyer under this contract.

B. If any expense exceeds an amount expressly stated in this contract for such expense to be paid by a party, that party may terminate this contract unless the other party agrees to pay such excess. Buyer may not pay charges and fees expressly prohibited by FHA, VA, Texas Veterans Land Board or other governmental loan program regulations.

PRORATIONS: Taxes for the current year, interest, maintenance fees, assessments, dues and rents will be prorated through the Closing Date. The tax proration may be calculated taking into consideration any change in exemptions that will affect the current year's taxes.

If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available. If taxes are not paid at or prior to closing, Buyer shall pay taxes for the current year.

CASUALTY LOSS: If any part of the Property is damaged or destroyed by fire or other casualty after the effective date of this contract, Seller shall restore the Property to its previous condition as soon as reasonably possible, but in any event by the Closing Date. If Seller fails to do so due to factors beyond Seller’s control, Buyer may (a) terminate this contract and the earnest money will be refunded to Buyer (b) extend the time for performance up to 15 days and the Closing Date will be extended as necessary or (c) accept the Property in its damaged condition with an assignment of insurance proceeds and receive credit from Seller at closing in the amount of the deductible under the insurance policy.

Seller’s obligations under this paragraph are independent of any other obligations of Seller under this contract.

DEFAULT: If Buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract. If Seller fails to comply with this contract, Seller will be in default and Buyer may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money, thereby releasing both parties from this contract.

MEDIATION: It is the policy of the State of Texas to encourage resolution of disputes through alternative dispute resolution procedures such as mediation. Any dispute between Seller and Buyer related to this contract which is not resolved through informal discussion will be submitted to a mutually acceptable mediation service or provider. The parties to the mediation shall bear the mediation costs equally. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction.

ATTORNEY'S FEES: A Buyer, Seller, Listing Broker, Other Broker, or escrow agent who prevails in any legal proceeding related to this contract is entitled to recover reasonable attorney’s fees and all costs of such proceeding.

18. ESCROW: A. ESCROW: The escrow agent is not (i) a party to this contract and does not have liability for the performance or nonperformance of any party to this contract, (ii) liable for interest on the earnest money and (iii) liable for the loss of any earnest money caused by the failure of any financial institution in which the earnest money has been deposited unless the financial institution is acting as escrow agent.

B. EXPENSES: At closing, the earnest money must be applied first to any cash down payment, then to Buyer's Expenses and any excess refunded to Buyer. If no closing occurs, escrow agent may: (i) require a written release of liability of the escrow agent from all parties, (ii) require payment of unpaid expenses incurred on behalf of a party, and (iii) only deduct from the earnest money the amount of unpaid expenses incurred on behalf of the party receiving the earnest money.

C. DEMAND: Upon termination of this contract, either party or the escrow agent may send a release of earnest money to each party and the parties shall execute counterparts of Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

Page 7 of 9

(Address of Property)

4-28-2014

the release and deliver same to the escrow agent. If either party fails to execute the release, either party may make a written demand to the escrow agent for the earnest money. If only one party makes written demand for the earnest money, escrow agent shall promptly provide a copy of the demand to the other party. If escrow agent does not receive written objection to the demand from the other party within 15 days, escrow agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money.

D. DAMAGES: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow agent within 7 days of receipt of the request will be liable to the other party for liquidated damages in an amount equal to the sum of: (i) three times the amount of the earnest money; (ii) the earnest money; (iii) reasonable attorney's fees; and (iv) all costs of suit.

E. NOTICES: Escrow agent's notices will be effective when sent in compliance with Paragraph 21. Notice of objection to the demand will be deemed effective upon receipt by escrow agent.

19. REPRESENTATIONS: All covenants, representations and warranties in this contract survive closing. If any representation of Seller in this contract is untrue on the Closing Date, Seller will be in default. Unless expressly prohibited by written agreement, Seller may continue to show the Property and receive, negotiate and accept back up offers.

20. FEDERAL TAX REQUIREMENTS: If Seller is a "foreign person,” as defined by applicable law, or if Seller fails to deliver an affidavit to Buyer that Seller is not a "foreign person,” then Buyer shall withhold from the sales proceeds an amount sufficient to comply with applicable tax law and deliver the same to the Internal Revenue Service together with appropriate tax forms. Internal Revenue Service regulations require filing written reports if currency in excess of specified amounts is received in the transaction.

21. NOTICES: All notices from one party to the other must be in writing and are effective when mailed to, hand-delivered at, or transmitted by facsimile or electronic transmission as follows: To Seller at:

To Buyer at: Telephone:

(

)

Facsimile:

(

)

E-mail:

Telephone:

(

)

Facsimile:

(

)

E-mail:

22. AGREEMENT OF PARTIES: This contract contains the entire agreement of the parties and cannot be changed except by their written agreement. Addenda which are a part of this contract are (Check all applicable boxes):  Third Party Financing Addendum for Credit  Environmental Assessment, Threatened or Endangered Species and Wetlands Approval Addendum  Seller Financing Addendum  Seller’s Temporary Residential Lease  Addendum for Property Subject to  Short Sale Addendum Mandatory Membership in a Property Owners Association  Addendum for Property Located Seaward  Buyer’s Temporary Residential Lease of the Gulf Intracoastal Waterway

 

Loan Assumption Addendum



Addendum for Seller's Disclosure of Information on Lead-based Paint and Leadbased Paint Hazards as Required by Federal Law



Addendum for Reservation of Oil, Gas and Other Minerals



Addendum for Property in a Propane Gas System Service Area

 

Addendum for "Back-Up" Contract



Other (list):

Addendum for Sale of Other Property by Buyer

Addendum for Coastal Area Property

Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

Page 8 of 9

(Address of Property)

4-28-2014

23. TERMINATION OPTION: For nominal consideration, the receipt of which is hereby acknowledged by Seller, and Buyer's agreement to pay Seller $ (Option Fee) within 3 days after the effective date of this contract, Seller grants Buyer the unrestricted right to terminate this contract by giving notice of termination to Seller within days after the effective date of this contract (Option Period). If no dollar amount is stated as the Option Fee or if Buyer fails to pay the Option Fee to Seller within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract.

If Buyer gives notice of termination within the time prescribed, the Option Fee will not be refunded; however, any earnest money will be refunded to Buyer. The Option Fee ď ąwill ď ąwill not be credited to the Sales Price at closing. Time is of the essence for this paragraph and strict compliance with the time for performance is required.

24. CONSULT AN ATTORNEY BEFORE SIGNING: TREC rules prohibit real estate licensees from giving legal advice. READ THIS CONTRACT CAREFULLY.

Buyer's Attorney is:

Seller's Attorney is:

Telephone: (

)

Telephone: (

)

(

)

Facsimile:

(

)

Facsimile: E-mail:

E-mail:

EXECUTED the day of , 20 (BROKER: FILL IN THE DATE OF FINAL ACCEPTANCE.)

Buyer

Seller

Buyer

Seller

(EFFECTIVE DATE).

The form of this contract has been approved by the Texas Real Estate Commission. TREC forms are intended for use only by tr ained real estate licensees. No representation is made as to the legal validity or adequacy of any provision in any specific transactions. It is not intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188, (512) 936-3000 (http://www.trec.texas.gov) TREC NO. 20-12. This form replaces TREC NO. 20-11.

Initialed for identification by Buyer TAR 1601

and Seller

TREC NO. 20-12

Contract Concerning

Page 9 of 9

(Address of Property)

4-28-2014

BROKER INFORMATION (Print name(s) only. Do not sign) Other Broker Firm represents

License No.

 Buyer only as Buyer’s agent  Seller as Listing Broker’s subagent

Listing Broker Firm represents

License No.

 Seller and Buyer as an intermediary  Seller only as Seller’s agent

Name of Associate’s Licensed Supervisor

Telephone

Name of Associate’s Licensed Supervisor

Telephone

Associate’s Name

Telephone

Listing Associate’s Name

Telephone

Listing Broker’s Office Address

Facsimile

Other Broker's Address

Facsimile

City

State

Zip

Associate’s Email Address

City

State

Zip

Listing Associate’s Email Address Selling Associate’s Name

Telephone

Name of Selling Associate’s Licensed Supervisor

Telephone

Selling Associate’s Office Address City

Facsimile State

Zip

Selling Associate’s Email Address

Listing Broker has agreed to pay Other Broker of the total sales price when the Listing Broker’s fee is received. Escrow agent is authorized and directed to pay other Broker from Listing Broker’s fee at closing.

OPTION FEE RECEIPT Receipt of $

(Option Fee) in the form of

Seller or Listing Broker

is acknowledged.

Date

CONTRACT AND EARNEST MONEY RECEIPT Receipt of Contract and is acknowledged.

$

Earnest Money in the form of

Escrow Agent:

Date:

By:

Email Address

Telephone (

Address City

Initialed for identification by Buyer TAR 1601

State

Zip

and Seller

Facsimile: (

) )

TREC NO. 20-12

Print Form 2-10-2014 EQUAL HOUSING OPPORTUNITY

PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)

THIRD PARTY FINANCING ADDENDUM FOR CREDIT APPROVAL (Not for use with Reverse Mortgage Financing) TO CONTRACT CONCERNING THE PROPERTY AT (Street Address and City)

Buyer shall apply promptly for all financing described below and make every reasonable effort to obtain credit approval for the financing (Credit Approval). Buyer shall furnish all information and documents required by lender for Credit Approval. Credit Approval will be deemed to have been obtained when (1) the terms of the loan(s) described below are available and (2) lender determines that Buyer has satisfied all of lender's requirements related to Buyer's assets, income and credit history. If Buyer cannot obtain Credit Approval, Buyer may give written notice to Seller within ____ days after the effective date of this contract and this contract will terminate and the earnest money will be refunded to Buyer. If Buyer does not give such notice within the time required, this contract will no longer be subject to Credit Approval. Time is of the essence for this paragraph and strict compliance with the time for performance is required.

NOTE: Credit Approval does not include approval of lender's underwriting requirements for the Property, as specified in Paragraph 4.A.(1) of the contract.

Each note must be secured by vendor’s and deed of trust liens.

CHECK APPLICABLE BOXES:

 A.

CONVENTIONAL FINANCING:  (1) A first mortgage loan in the principal amount of $ (excluding any financed PMI premium), due in full in year(s), with interest not to exceed % per annum for the first year(s) of the loan with Adjusted Origination Charges as shown on Buyer’s Good Faith Estimate for the loan not to exceed % of the loan.  (2) A second mortgage loan in the principal amount of $ (excluding any financed PMI premium), due in full in year(s), with interest not to exceed % per annum for the first year(s) of the loan with Adjusted Origination Charges as shown on Buyer’s Good Faith Estimate for the loan not to exceed % of the loan.  B. TEXAS VETERANS LOAN: A loan(s) from the Texas Veterans Land Board of $ for a period in the total amount of years at the interest rate established by the Texas Veterans Land Board.  C. FHA INSURED FINANCING: A Section FHA insured loan of not less than $ (excluding any financed MIP), amortizable monthly for not less than years, with interest not to exceed % per annum for the first year(s) of the loan with Adjusted Origination Charges as shown on Buyer’s Good Faith Estimate for the loan not to exceed % of the loan. As required by HUD-FHA, if FHA valuation is unknown, "It is expressly agreed that, notwithstanding any other provision of this contract, the purchaser (Buyer) shall not be obligated to complete the purchase of the Property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise unless the purchaser (Buyer) has been given in accordance with HUD/FHA or VA requirements a written statement issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct Endorsement Lender setting forth the appraised value of the Property of not less than $ . The purchaser (Buyer) shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the Initialed for identification by Buyer

and Seller

TREC NO. 40-6 TAR 1901

Third Party Financing Condition Addendum Concerning

Page 2 of 2

2-10-2014

(Address of Property)

maximum mortgage the Department of Housing and Urban Development will insure. HUD does not warrant the value or the condition of the Property. The purchaser (Buyer) should satisfy himself/herself that the price and the condition of the Property are acceptable."

 D. VA GUARANTEED FINANCING: A VA guaranteed loan of not less than $

(excluding any financed Funding Fee), amortizable monthly for not less than years, with interest not to exceed % per annum for the first year(s) of the loan with Adjusted Origination Charges as shown on Buyer’s Good Faith Estimate for the loan not to exceed % of the loan.

VA NOTICE TO BUYER: "It is expressly agreed that, notwithstanding any other provisions of this contract, the Buyer shall not incur any penalty by forfeiture of earnest money or otherwise or be obligated to complete the purchase of the Property described herein, if the contract purchase price or cost exceeds the reasonable value of the Property established by the Department of Veterans Affairs. The Buyer shall, however, have the privilege and option of proceeding with the consummation of this contract without regard to the amount of the reasonable value established by the Department of Veterans Affairs."

If Buyer elects to complete the purchase at an amount in excess of the reasonable value established by VA, Buyer shall pay such excess amount in cash from a source which Buyer agrees to disclose to the VA and which Buyer represents will not be from borrowed funds except as approved by VA. If VA reasonable value of the Property is less than the Sales Price, Seller may reduce the Sales Price to an amount equal to the VA reasonable value and the sale will be closed at the lower Sales Price with proportionate adjustments to the down payment and the loan amount.



E.USDA GUARANTEED FINANCING: A USDA-guaranteed loan of not less than $ (excluding any financed Funding Fee), amortizable monthly for not less than years, with interest not to exceed % per annum for the first year(s) of the loan with Adjusted Origination Charges as shown on Buyer’s Good Faith Estimate for the loan not to exceed % of the loan.

Buyer hereby authorizes any lender to furnish to the Seller or Buyer or their representatives information relating only to the status of Credit Approval of Buyer.

Buyer

Seller

Buyer

Seller

This form has been approved by the Texas Real Estate Commission for use with similarly approved or promulgated contract forms. Such approval relates to this form only. TREC forms are intended for use only by trained real estate licensees. No representation is made as to the legal validity or adequacy of any provision in any specific transactions. It is not intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188, (512) 936-3000 (http://www.trec.texas.gov) TREC No. 40-6. This form replaces TREC No. 40-5.

TREC NO. 40-6 TAR 1901

APPROVED BY THE TEXAS REAL ESTATE COMMISSION (TREC) FOR VOLUNTARY USE

10-10-11

EQUAL HOUSING OPPORTUNITY

NON-REALTY ITEMS ADDENDUM TO CONTRACT CONCERNING THE PROPERTY AT (Address of Property)

A.

For an additional sum of $ and other and good valuable consideration, Seller shall convey to Buyer at closing the following personal property (specify each item carefully, include description, model numbers, serial numbers, location, and other information):

B.

Seller represents and warrants that Seller owns the personal property described in Paragraph A free and clear of all encumbrances.

C.

Seller does not warrant or guarantee the condition or future performance of the personal property conveyed by this document.

Buyer

Seller

Buyer

Seller

This form has been approved by the Texas Real Estate Commission for voluntary use by its licensees. Copies of TREC rules governing real estate brokers, salesperson and real estate inspectors are available at nominal cost from TREC. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188, 512-936-3000 (http://www.trec.texas.gov)

TREC NO. OP-M

Eleven Oaks Realty (512) 827-8323 info@11OaksRealty.com AustinRealEstateHomesBlog.com TREC #: 614417