RE/MAX Buyer's Guide

OUR STANDARD OF CARE FOR HOMEBUYERS

At RE/MAX Sun Properties, we want your homebuying experience to be one of the most satisfying business transactions you’ll ever enjoy. We offer a highly experienced and effective team of Associates who have an average of over 25 years in the business, backed up by one of the most experienced management teams. Together, this group of proven experts is available to assist in any situation.

When buying real estate, a professional real estate agent can be the difference between a great investment and a disappointing experience. Our Associates provide many useful services and can assist you in a variety of ways, subject to your needs. They have resources and strategies for nearly every situation. Your RE/MAX agent will not only help you achieve the success you desire, but they can also help you save hundreds, thousands or tens of thousands of dollars during your transaction. In a real estate purchase, the seller and buyer may each have agents. Sometimes, under certain circumstances, the same agent or agents of a brokerage may work for both the buyer and the seller, known as Limited Dual Agency. The following information addresses the various types of agency relationships that are available and will help you decide which relationship you want to have with a real estate agent. It will also give you useful information about the various services our Associates can provide to you in your homebuying experience, and it will help explain how real estate agents are paid.

OUR STANDARD OF CARE FOR HOMEBUYERS

REAL ESTATE AGENCY EXPLAINED:

To begin, it’s helpful to understand that the terms “Agent” and “Broker” are often used interchangeably. However, for the purposes of this discussion, the Broker is considered the company (in this case, RE/MAX Sun Properties) for the party or parties, and the Sales Associate is the individual employed by the Broker and properly licensed by the State of Arizona to assist buyers and sellers.

BUYER’S BROKER: This is the Agent, other than the Seller’s Agent, acting on behalf of the Buyer to purchase a home. In these situations, the Buyer’s Agent is not representing the Seller, even if the Buyer’s Agent is receiving compensation for services rendered, either in full or in part, from the Seller or through the Seller’s Broker:

A. A Buyer’s Broker has the fiduciary duties of loyalty, obedience, disclosure, confidentiality, and accounting in dealings with the Buyer. The Buyer Broker protects and promotes the interests of the Buyer.

B. Other potential Buyers represented by Broker may consider, make offers on, or acquire an interest in the same or similar properties as the Buyer is seeking.

SELLER’S BROKER: A Broker under a listing agreement with the Seller acts as the Broker for the Seller only:

A. A Seller’s Broker has the fiduciary duties of loyalty, obedience, disclosure, confidentiality, and accounting in dealings with the Seller. The Seller’s Broker protects the interests of the Seller.

B. In addition, other potential Sellers represented by Broker may list properties that are similar to the property that Seller is selling.

OUR STANDARD OF CARE FOR HOMEBUYERS

BROKER REPRESENTING BOTH SELLER AND BUYER (LIMITED DUAL REPRESENTATION):

In Arizona, it is legally permissible for an Agent or firm to represent you and the Seller at the same time. This “Limited Dual Representation” relationship usually occurs when you become interested in a property listed with our firm. If this occurs and you have not already agreed to a dual representation relationship, your Buyer’s Agent will ask you to review and sign an Agency Disclosure and Election Form, a separate agreement permitting him or her to act as Agent for both you and the Seller. It may be difficult for a Dual Agent to advance the interests of both the Buyer and Seller. Nevertheless, a dual Agent must treat Buyers and Sellers fairly and equally.

In these situations, the Broker, acting through its licensee(s), represents both the Buyer and the Seller, with limitations of the duties owed to the Buyer and the Seller:

A. The broker will not, without written authorization, disclose to the other party that the Seller will accept a price or terms other than what is stated in the listing or that the Buyer will accept a price or terms other than offered.

B. There will be conflicts in the duties of loyalty, obedience, disclosure and confidentiality. Disclosure of confidential information may be made only with written authorization.

BUYER BROKER EXCLUSIVE EMPLOYMENT AGREEMENTS:

In a highly competitive market, more and more savvy Buyers are realizing the benefits of an exclusive Buyer-Broker Agreement. In this arrangement, the Agent is contractually committed to finding a property based upon the Buyers stated expectations and the Buyer agrees to be committed to the Buyer’s Broker. In a competitive market with low inventory, this will give the Buyer one more advantage in finding the right home at the right price!

Prior to signing an Agency Disclosure and Election Form or Buyer Broker Compensation Agreement, make sure you clearly understand it’s meaning. Your Agent will have suggestions how they represent you in a transaction with a Builder, For Sale By Owner or in a variety of situations.

OUR STANDARD OF CARE FOR HOMEBUYERS

SERVICES YOU CAN EXPECT FROM YOUR RE/MAX SUN PROPERTIES BUYER’S BROKER WHEN ENTERING INTO A BUYER BROKER EXCLUSIVE COMPENSATION AGREEMENT:

LOCAL MARKET EXPERTISE:

• Provide area knowledge and market information regarding neighborhood characteristics, schools, solar orientations, construction details and much more.

IDENTIFY SUITABLE PROSPECTS:

• Identify appropriate homes that suit your criteria.

• Facilitate an online search after an in-depth interview with you.

• Seek out properties that are not yet on the market by reaching out to other agents in our network.

• Your Agent can also assist you when working with a Home Builder, For Sale By Owner or various other situations.

CONDUCT PROPERTY TOURS:

• Provide relevant information about property boundaries, taxes, HOA information and home features.

• Your agent will have gate and home access so that your tours are efficiently timed.

• Agents may also provide an online viewing of a property when a Buyer is out of state!

• Schedule properties to be toured.

THOROUGH MARKET ANALYSIS:

• Provide active, pending and sold comparable properties and analysis.

• Provide current analysis of the overall market.

• Provide history of the property and past MLS listings.

• Share knowledge of the neighborhood.

• Provide property disclosures.

OUR STANDARD OF CARE FOR HOMEBUYERS

EXPERT NEGOTIATION SKILLS:

• Provide experienced, expert negotiation and strategies for obtaining properties in a competitive market.

• Identify hot buttons like Seller’s needs, timing strategies and negotiation tactics.

• Protect your interests by proactively anticipating and addressing potential transaction complications.

GUIDANCE THROUGHOUT DUE DILIGENCE AND INSPECTION PERIOD

• Provide recommendations for professional inspectors, and vendors for in-depth inspections of various components, including pool, roof, A/C, termites, appliances, and more.

• Monitoring of Due Diligence timelines and response criteria.

• Information to help you understand costs for identified items in the Buyers Inspection.

• Professional guidance to develop strategies for requesting items on the Buyers Inspection Notice.

GUIDANCE THROUGH THE ESCROW PROCESS:

• Suggestions for Lenders, Appraisers, Title/Escrow Companies.

• Monitoring of key deadlines and conditions of your contract.

• Guidance in understanding HOA information.

• Suggestions for effective Home Warranties.

COORDINATE CLOSING:

• Coordination with escrow and Lender.

• Provide move-in information including utilities and HOA information, mail delivery and more.

• Coordinate final walk-through and re-inspection of discovered items.

• Provide an orientation to your new neighborhood.

• Provide resources for movers, pool companies, landscapers, housekeepers, pest control and more.

THE HOME BUYING PROCESS

You will finalize your loan, review documents and discuss the findings of the home inspection. Your Agent will help you manage this entire process, and will provide solutions to overcome any challenges.

DETAILS

Your Agent will coordinate the Lender as well as the Title and Escrow company that will ensure you have good title and all monies are accounted for.

OFFER ACCEPTED

You’re on your way. Next, we'll recommend inspection companies and vendors to help you fully understand all the issues of the home.

ALMOST THERE!

Schedule a final walk-through. Have all loan documents and funds to escrow 3-days prior to close. Let’s talk utilities, mail service, moving & home service vendors!

Discuss the best way to be represented in this tight market. Buyer Broker Agreement? Limited Dual Representation (if you’re interested in a RE/MAX Sun Properties listing.)

MEET WITH AGENT

Either online or in-person, it helps to have a face-to-face discussion and for us to get to know you and your desires for your

Whether you’re paying cash or financing, there are strategies to making a competitive offer. Let us recommend a local Lender who knows the ropes and can place you in the best light possible!

SEARCH FOR HOMES

The fun part!

Your Agent will schedule showings and help you find the perfect home.

In most cases, the contract provides you with a timeline to obtain financing, as well as time to inspect the physical condition of the home. Your real estate professional will inform you of all your rights and responsibilities related to the contract

LET’S TALK STRATEGY

In a competitive market, there are ways to make your offer more attractive!

ANALYSIS

Your Agent will provide comprehensive market analysis, history of the property, HOA and other details to help you set a price and terms.

Not all real estate websites are the same! Your Agent has tools and systems to ensure you see every available home that meets your criteria, along with detailed information you need to narrow your search.

REAL ESTATE TERMINOLOGY

ADJUSTABLE RATE MORTGAGE (ARM)

The interest rate is tied to a financial index, making the monthly mortgage payment go up or down over time.

ANNUAL PERCENTAGE RATE (APR)

The annual rate of interest charged to borrowers and paid to investors. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan.

APPRAISAL

A report highlighting the estimated value of the property completed by a qualified third party. This is typically done for the benefit of the Buyer or the Buyer’s Lender to ensure the property is worth the purchase price.

ASSOCIATION FEE/HOA FEE

In addition to a mortgage, certain housing communities such as townhomes have a monthly fee associated with maintaining the common areas and amenities.

BALLOON MORTGAGE

A mortgage in which a large portion of the borrowed principal is repaid in a single payment at the end of the loan period.

CLOSING

When the new title to the property is officially recorded by the County Recorder’s Office and ownership of the property transfers to the new Buyer.

CLOSING COSTS

The Buyer and Seller have expenses associated with the transaction other than that of the actual cost of the home. For example, the Buyer has a variety of fees due for obtaining a new loan and the Seller must pay commission to both Agents.

CLOSING DISCLOSURE

A form that provides the final details about the mortgage loan. It includes loan terms, projected monthly payments, and how much the extra fees will be.

COLLATERAL

Something of value (in this case, your home) that is held to ensure repayment of a mortgage or loan.

COMMISSION

A percent of the sale price of the home or a fixed fee that is paid to Agents and their brokerage firms. In a residential transaction, the Seller usually pays the commission to both the Buying and Listing Agents, yet the Buyer may also pay the fee directly to the brokerage firm representing the Buyer.

COMPARABLES

Homes in the area of interest that have recently sold that have similar features.

CONTINGENCIES

Conditions which must be met in order to close. Contingencies are typically tied to a date, referred to as a deadline. If the contingency is not satisfied, the contract may be canceled.

REAL ESTATE TERMINOLOGY

COUNTEROFFER

The response from the Seller in regard to an offer or from the Buyer in response to a Seller’s counter offer.

DEBT-TO-INCOME RATIO

A Lender will evaluate whether a Borrower’s income is sufficient to handle their payments on existing debts plus their new mortgage payments.

DOWN PAYMENT

A percent of the cost of the property that is paid up front as a function of qualifying for the mortgage.

EARNEST MONEY

The deposit made from the Buyer to the Seller when submitting an offer. This deposit is typically held in trust by a third party, for instance an Escrow Company. Upon closing, the money will generally be applied to the down payment or closing costs.

ESCROW

This term has multiple meanings; earnest money is typically held by a third party until closing in “escrow”. It can also be referred to as the time period from when the contract is written and accepted by the Seller to when the home sale actually closes.

EQUITY

The difference in the market value of a home versus what is owed on the home.

FHA

A mortgage that is financed through a private lender and insured by the Federal Housing Administration, often requiring a lower down payment and income to qualify.

FIXED RATE

The interest rate will remain the same for the entire life of the mortgage.

HOME EQUITY LINE OF CREDIT

A loan or line of credit that your Lender may offer using the equity in your home.

HOME INSPECTION

The process in which a professional inspects the Seller’s home for issues that may not be readily apparent, and then creates a report for the Buyer to review.

HOME PROTECTION PLAN

A one-year service that covers the cost of repairs or replacements to items covered in the plan (such as stoves, dishwashers, A/C, heaters, etc.).

HYBRID

A loan that starts with a fixed rate period, then converts to an adjustable rate.

MORTGAGE INSURANCE

Insurance written in connection with a mortgage loan that protects the Lender in the event the Borrower cannot repay their loan. This is usually not required if the Borrower has 20% or more for the down payment.

REAL ESTATE TERMINOLOGY

MORTGAGE NOTE

A promise to pay a sum of money at a standard interest rate during a specific term that is secured by a mortgage.

MULTIPLE LISTING SERVICE (MLS)

This refers to a national list of properties that are available for sale through REALTORs. Not all real estate agents are REALTORs, but all REALTOR members must subscribe to a Code of Ethics as prescribed by the National Association of Realtors. These are the most reliable sources to receive up-to-date listing information.

PRE-APPROVAL

The process in which a lender makes an initial evaluation of how much money a Buyer might be qualified to borrow based on the preliminary financial information provided. This gives the Seller more confidence in the Buyer’s ability to close escrow, but is not a guarantee that the loan will be approved.

PRINCIPAL

The underlying amount of the loan which is actually borrowed.

PROPERTY TAXES

These are the taxes that are collected by the city, town, county, and state government entities. Sometimes they are included in the total monthly mortgage payment paid to the Lender and sometimes they are paid directly by the home owner.

REO

Real estate owned properties or foreclosed properties currently owned by a financial institution such as the bank that made the loan to the previous owner.

REVERSE MORTGAGE

This is specifically for seniors and it allows them to convert the equity in their home to cash.

SHORT SALE

A situation when the Seller’s Lender is willing to accept an offer and allows the sale to be completed for an amount less than the mortgage amount owed by the Seller.

TITLE

The interest one holds in the ownership of real property. This ownership is normally evidenced by a deed.

UNDERWRITING

The process in which the potential home Buyer is evaluated for their financial lender for their ability to obtain and repay a loan. This is normally includes a credit check and an appraisal of the property.

VA LOAN

Special no-down-payment loans that are available to Americans who have served in the Armed Forces. These loans are issued by private lenders and are guaranteed by the Department of Veterans Affairs.

HOUSE HUNTING CHECK LIST

NOTES ABOUT THE

ADDITIONAL