Property of Cherie Miller & Associates 2011

You are about to begin an exciting journey into selling your home. Cherie Miller & Associates, Pioneertown Realty, Morongo Valley Realty, Joshua Tree Realty, and 29 Palms Realty are here, not only to see that you sell your home at the best possible price but also to help you through the process.

This booklet will explain the particulars of selling your home. You will find it useful to familiarize yourself with the various documents and procedures you will encounter during the selling process.

Please review the material. Feel free to contact us with any questions you may have. If you require further information on your specific situation, please contact listing agent or escrow officer.

Please note that some pages in this guide include information for the buyer. This information will help you better understand the entire process of buying/selling real estate.

Visit us on the web at: www.cheriemiller.com • www.pioneertownrealty.com • www.morongovalleyrealty.com

www.joshuatreerealty.info • www.29palmsrealty.com

We wish you the best of luck in this exciting endeavor!

Information contained in this booklet deemed reliable but not guaranteed

Tips for the SellerLet your home smilea welcome to buyers

1. First impressions are lasting. The frontdoor greets the prospect. Make sure it isfresh, clean, and attractive. Keep lawnstrimmed and edged and the yard freeof refuse.

2. Decorate for a quick sale. Faded walls andworn woodwork reduce appeal. Why tellthe prospect how your home could look,when you can show them by redecorating?A quicker sale at a higher price will result.An investment in new kitchen wallpaperwill pay dividends.

3. Let the sun shine in. Open draperies andblinds and let the prospect see howcheerful your home can be. (Dark roomsdo not appeal).

4. Fix that faucet! Dripping water discolorssinks and suggests faulty plumbing.

5. Repairs can make a difference. Looseknobs, sticking doors and windows,warped cabinet drawers, and otherminor flaws detract from a home’s value.Have them fixed.

6. From top to bottom: Display the full valueof your attic and other utility space byremoving all unnecessary articles.

7. Safety first. Keep stairways clear. Avoidcluttered appearances and possibleinjuries.

8. Make closets look bigger. Neat well-ordered closets show that space is ample.

9. Bathrooms help sell homes. Check andrepair caulking in bathtubs and showers.Make these rooms sparkle.

10. Arrange bedrooms neatly. Remove excessfurniture. Use attractive bedspreads andfreshly laundered curtains.

11. Can you see the light? Illumination is likea welcome sign. The potential buyer willfeel the glowing warmth when you turn onall your lights for an evening inspection.

12. Three’s a crowd. Avoid having too manypeople present during inspections. Thepotential buyers will feel like an intruderand will hurry through the house.

13. Music is mellow. But not when showing ahouse. Turn off the radio or television. Letthe salesperson and buyers talk, free ofdisturbances.

14. Pets underfoot? Keep them out of the way- preferably out of the house.

15. Silence is golden. Be courteous but don’tforce conversation with the potentialbuyers. They want to inspect your house,not pay a social call.

16. Be it ever so humble: Never apologize forthe appearance of your home. After all, ithas been lived in. Let the trainedsalesperson answer any objections. Thisis their job.

17. In the background: The salespersonknows the buyer’s requirements and canbetter emphasize the features of yourhome when you don’t tag along. You willbe called if needed.

18. Why put the cart before the horse? Tryingto dispose of furniture and furnishings tothe potential buyers before they havepurchased the house often loses a sale.

19. A word to the wise: Let the real estateagents discuss price, terms, possession,and other factors with the customer. Theyare eminently qualified to bringnegotiations to a favorable conclusion.

20. Use your agent. Show your home toprospective buyers only by appointmentthrough your agent. Your cooperation willbe appreciated and will help close the salemore quickly.

Sure-Fire Selling Strategies

Synopsis

Selling your house in a

slow market may be

difficult, but knowing a

few tricks of the trade

and being realistic

about pricing can help

make the sale

Every seller dreams of listing in a market thick with buyers, and getting a full-priceoffer immediately from a pre-approved buyer willing to waive a home inspectionand close at the seller’s convenience.The reality is far from that, especially in a sluggish market where houses canlanguish for months. Market forces can’t be controlled, but often the reason housesdon’t sell is because they’re overpriced – and that’s something you can control.Aftersprucing up your house, the best sales strategy involves being realistic about thevalue of your property and finding ways to entice buyers beyond curb appeal.

Pulling Out the StopsTry these tactics to speed your sale:

A comprehensive home inspection combined with a home warranty reassuresbuyers that the property is in good condition and that certain repairs will becovered by insurance. Make copies of these documents for buyers to take away.

Decoratingallowance

STRATEGY RATIONALE

Lease option

Seller Financing

Closing Costs

Pre-Sale inspectionand warranty

TIPS: Remember, the longer your home is on the market, the lesslikely you are to get a full-price offer. Don’t hesitate to take stepsquickly after the first month goes by. If you make major repairs or offerincentives, schedule another open house to renew enthusiasm for theproperty.Good agents should keep you informed about what they are doing tomarket your home. If your agent has not been doing this, ask for adetailed report.

Listen to FeedbackIf your home has been on the market for several months with no offers, it’s time tomeet with your agent and discuss the situation. Before you meet, ask your agentto get feedback from other agents who have shown your home. Correct any recurringissues. If the consensus is that your home isn’t selling because of price, reducethe price as soon as possible.

A Sign of the TimesSignage may seemstraightforward, butit’s one of your mostimportant sales tools.The sale sign shouldbe two-sided, easy toread, and in excellentcondition (a damagedsign can lower curbappeal). If yourneighborhood is full ofwalkers, add a box ofsales brochures. Youmay have to put upwith everyone know-ing your sales price,but word of mouth canbe very effectiveadvertising, especiallyif your area isdesirable. If you addincentives such as ahome warranty, postthat on the sign aswell.

Offer an appropriate allowance (for re-carpeting, wallpapering, or painting) to abuyer who likes everything but your taste in decor.

This allows a buyer to rent the property for a period of time with an option to buy.A percentage of the rent is set aside as the buyer’s down payment, while youuse the remainder to cover your mortgage. To increase the likelihood of a sale,put at least 30 percent of the rent toward a down payment.

Seller financing is most advantageous if you have substantial equity in theproperty. Options include buying down the mortgage rate, putting funds inescrow to cover several months of mortgage payments, and carrying back asecond mortgage to help a buyer cover a down payment. Before you offerfinancial assistant to a buyer, consult your agent and real estate attorney, andmake sure the buyer is creditworthy.

You can offer to cover nonrecurring closing costs, such as prepaid interestcharges or the first year of property taxes. Paying points is an attractiveincentive that you an also use as a tax deduction. Most lenders limit the amountof closing costs you can pay, but this can make a difference for cash-shortbuyers.

1. When do I get my sale proceeds?On the date of recording, your escrow officer will have your proceeds available foryour review. At the time of signing, you may request that your escrow officer eithercut you a check for your proceeds or wire the funds directly into your bank account.

2. Why do I have to pay interest on my loan pay-off past the date ofrecording?Your lender continues to accrue interest to the date that they post your loan asbeing paid in full. This could be one or two days from the date your escrow officersends your pay-off check via overnight delivery or wire transfer.

3. When do I get a refund from my impound account?After your escrow officer sends your pay-off check to your existing lender, you canexpect to get your impound account back directly from your lender within 30-60 days.If you have any questions after that time, we suggest calling your lender.

4. When do I cancel homeowner’s/fire insurance?Please do not cancel your insurance until you have received your sale proceeds.

5. Why does my escrow officer require that I complete a 1099 form?A 1099 form is the reporting form adopted by the IRS for submitting the informationrequired by law. Under guidelines established by the IRS, sellers of real propertyare required to have their sales price reported on the 1099 form.

6. What is a Statement of Information?Statements of Information provide title companies with the information they need todistinguish the buyers and sellers of real property from others with similar names.After identifying the true buyers and sellers, title companies may disregard thejudgments, liens, or other matters on the public records under similar names.

7. I don’t understand tax pro-rations. How do they work?Taxes are based on a fiscal year from July 1 to June 30 from the time you execute alldocuments to sell your property. The escrow officer will explain this to you in greaterdetail at the time of signing.

8. What will I need to bring with me to the Title Company when I go to sign mypapers?If you need money to close your escrow, you will need to bring your cashier’s check,payable to the Title Company (if the amount was given to you previously). Bring avalid driver’s license, California ID card, valid passport, or military ID.

9. What do I do if I’m an out-of-state seller and selling property in California?Immediately contact your real estate agent or your escrow officer – this can be atime-consuming process.

10. What is a Deed of Reconveyance?A Deed of Reconveyance is a recordable document issued by your previous lenderin conjunction with the pay-off of your loan. This document is recorded at thecounty recorder’s office and shows that the mortgage in your name has beenreleased from the property and paid in full.

Top 10 Seller’s Questions

A good book to investin is House Selling forDummies by EricTyson and Ray Brown

Real estatetransactions arecomplicated and canbe confusing.Cherie Miller &Associates, JoshuaTree Realty, and 29Palms Realty will behappy to answer anyquestions that youmay have.

What to do if Your Home Isn’t Selling

A good book to investin is House Selling forDummies by EricTyson and Ray Brown

How long is too long? It’s not anexact science, but there are somehelpful indicators. In a dry market, asales period of six months to oneyear isn’t unusual. Look at recentsales reports of similar homesnearby to determine a reasonableselling interval. In a hot seller’smarket, a house that hasn’t soldwithin one month indicates aproblem. In either case, there areseveral steps you can take beforeputting up the white flag.

Ten tips to improve your selling karma:

1. Videotape your house, inside andout, and watch the tape as if you werea prospective buyer. Is the lawnweedy or the garden bare? Is your homeuncluttered and spotlessly scrubbed?Sparkling clean houses sell faster thanthose that look too lived-in or shown anabundance of the owner’s personality.

2. Take a second look at your listingprice. Visit open houses in yourneighborhood. Are similar homespriced lower? Selling prices may havedropped since your first comparativemarket analysis. In a hot market, if youhaven’t sold your home within onemonth, chances are good that you’veoverpriced it. If you do lower your askingprice consider a figure slightly belowthose of other comparable homes if youare interested in a speedy sale.

3. Do whatever it takes to be away fromyour home during showings andopen houses. The presence of sellersmakes it difficult for prospective buyersto take their time or talk openly with theirpartner and agent. Leave some treatsout to make potential buyers morecomfortable: beverages, nuts, cookies– anything that won’t lose freshness orbe too messy.

4. Ask your listing agent to talk tobuyer agents in his or her firm whohave shown your home. Thefeedback from their clients can guideyou in making home repairs, toningdown your decor, making landscapingimprovements, and the like.

5. Hold an open house on a weeknight.Competition is lower, and you’ll attractthe interest of buyers who can’t makeweekend appointments because ofother commitments.

SynopsisWhether you’re in abone-dry market or asizzling sellingseason, if you haven’treceived any offers onyour home, you’reprobably facing thequestion of whether totake it off the market.A house that goes toolong without sellingbegins to appear“stale” and canactually damage yourfuture chances of asale.

Choose yourselling season.If you can afford to doso, re-list during amore dependableselling season. Afterwarming up in latewinter, the markettypically starts to peakfrom the ides of April(yep, tax seasonmakes a difference)until June, whenlonger days andsplashes of gardencolor make homeslook their best. Insummer, the marketslows to a crawl,followed by a secondpeak from Septemberto Thanksgiving. Fromthen until January, themarket tends to be ascold as a Midwesternwinter, but it can alsobe advantageous tolist while thecompetition issleeping. Research thetrends in your area: ifyou live near a winterresort, for example,winter may be thesavviest time to sell.

6. Take out some extra newspaper adsor print up flyers, even if your agentis doing a good job with promotions.Look for out-of-the-ordinary places toadvertise, such as trade magazines,company newsletters, and otheralternative resources. You can evenoffer perks to buyers, such as a cashbonus or a season ski pass.

7. Neutralize your color scheme. Mostbuyers prefer pale, neutral colors thatmake it easier to imagine a new homeas their own. Houses with whiteexteriors are the highest sellers; forinteriors, try whites, off-whites, or palegrays.

8. If you’ve had offers but youconsidered them too “lowball,” tryreadjusting your sights. Determinethe lowest price you find acceptableand consider anything more as icing onthe cake. In a long-standing dry marketyou may even have to sell at a loss, soit’s important to take every offerseriously. You don’t want to alienate apotential buyer who has solid financingbecause you’ve set your sightsunrealistically high.

9. Is your listing agent giving yourhouse adequate attention? If not,start by having a candid talk. If there’sno change, discuss the problem withthe firm’s broker. As a last resort, waituntil your listing agreement expires andfind an agent with a proven track recordin your area. On the other hand, if youhave a fabulous agent but the marketis underwater, consider offering anincreased commission or a bonus foryour listing agent as an extra incentive.If you do sweeten the pot for your agent,amend your listing contract to reflect thechange and be sure it’s added to theMultiple Listing Service (MLS) book –buyer agents will also be inspired togive your house extra attention.

10. Re-list your house to give it a kick-start. When it was listed on the MLS,it was assigned a number reflecting thedate and year of the listing. By now itmay appear outdated to buyer agents;re-listing will provide you with a newnumber. Check into the policies of yourlocal MLS. You may need to make achange to qualify for re-listing, such astemporarily taking your home off themarket, or adjusting its price.

Home Improvements

If you have ever done a home improvement orthought about doing a remodel, one question youshould ask yourself is “How much of the cost will Iget back when I sell?” The chart below is reprintedfrom Remodeling Contractor, a Chicago-basedmagazine which serves the remodeling industry. Forpurposes of the study, it was assumed that the 14remodeling projects below were undertaken bysomeone who owns a 17-year-old, single-level ranchhome, with 1600 square feet of living space. Thisaverage American home is supposed to be locatedin a mid-west suburban area and it is valued at$90,000 before improvements. Obviously, thisaverage home is not typical of a Southern Californiaaverage home. However, the percentages give someestimate of the relative importance each project hason resale.

HOW MUCH HOME IMPROVEMENTS ACTUALLYADD TO A HOME’S RESALE VALUE

The column headed average contains the averagecost of each project as estimated by remodelingcontractors. Resale is the value of the improvementby realtors. Finance is the amount a savings andloan company estimated the improvement would addto the value of the home. The percentage values arethe increase or loss the homeowner would realizeupon selling. Average % is simply the average ofResale and Finance percentages.

Notice that the majority of the cost of theimprovements will not be recovered when the houseis sold.

Remember though that resale is just one of theconsiderations you should take into account whenyou make decisions about remodeling. Insulation willpay for itself by reducing your heating/cooling costs.A deck or swimming pool project should beundertaken primarily for the pleasure you hope it willadd to your life.

Project Average Resale $ % Finance $ % Average %

Add Fireplace $3,250 $4,000 123% $4,225 130% 126%

Add Full Bath $7,300 $8,000 110% $9,500 130% 120%

Add Greenhouse $13,500 $12,000 89% $14,850 110% 99%

Minor Kitchen Remodel $6,700 $6,000 90% $5,700 85% 87%

Siding/Insulation $6,000 $6,000 100% $4,200 70% 85%

Major Kitchen Remodel $18,000 $16,000 89% $12,600 70% 79%

Add Insulation $1,200 $1,000 83% $900 75% 79%

New Roofing $3,400 $2,700 80% $2,550 75% 77%

Add Skylight $2,800 $2,100 75% $2,250 80% 77%

Add Wood Deck $4,800 $3,500 73% $3,100 65% 69%

Windows/Doors $9,750 $7,000 72% $6,350 65% 68%

Add Room $28,000 $20,000 71% $18,200 65% 68%

Remodel Bath $6,200 $4,650 75% $3,700 60% 67%

Add Pool $19,000 $6,100 32% $5,700 30# 31%

WHO NEEDS ESCROW?

You do ... if you are buying or selling a house, business, income property,mobile home, or if you are involved in any other transaction which may requirethe transfer of documents or funds.

WHAT IS ESCROW?

It is an agreement in which a buyer and seller appoint an impartial third party tohold funds and/or documents. For example, in a real estate transaction, anescrow officer would hold the seller’s deed and the buyer’s funds.

WHAT DOES AN ESCROW OFFICER DO?The escrow officer acts for all parties to the escrow. They hold such documentsas deeds, bills of sale, releases, and any special reports needed and have thenecessary documents recorded. They act as the depository of money involvedin the transactions. They can see that taxes, fees, interest, and commissionsdue are paid, and they disburse funds in the correct amounts at the propertimes.

In an escrow transaction, an escrow officer makes sure your written instructionsare carried out before exchanging the funds and/or documents.

WHAT TRANSACTION TYPES NECESSITATE ESCROW?

Residential Sale TransactionsRefinancing a MortgageSale of Income and Commercial PropertySubdivisionsMobile Home SalesConstruction Loans

WHO PAYS THE ESCROW COSTS?

The escrow cost is a matter of agreement between the parties, as is thechoosing of the escrow company.

Title companies andEscrow companiesserve as an impartialthird party duringyour real estatetransaction.

Who Needs Escrow?

Escrow companies are generally heldliable if any instructions are violatedduring the course of an escrow. Nochanges may be made to any escrowinstructions if changing them would bedetrimental to any party involved. It ispossible to change instructions once anescrow has begun, but only by mutualagreement of the parties. Finally, allescrows have clearly defined time limits.If for some reason all instructions cannotbe carried out by the end of the time limit,all parties involved are entitled to thereturn of documents, fees, funds, andother related materials. They also maymutually agree to extend the time periodby changing the instructions.

The term ‘escrow’ has come to mean‘neutral protection’ for the seller, buyer,and lender. All parties involved in thetransfer of real property are impartiallyprotected during the transaction and areserviced by professionals intent onensuring a smooth, trouble-free sale.Look for an escrow company that clearlydefines its services and lists all fees andcharges up front.

Escrow is an indispensable necessity intoday’s marketplace. If you need furtherexplanations during the process, alwaysconsult your escrow officer. The escrowcompany is, indeed, a neutral third party,and its job is to make sure all saleconditions are met quickly and efficiently.

Ideally, you would ask your real estateagent to recommend two or three differentescrow companies and then go fromthere. In most cases, escrow companieswork together with the title insurancecompanies, so you select both an escrowcompany and a title company at the sametime.

The Escrow

This neutral third party acts as anintermediary between the buyer and theseller, and collects and remits funds asinstructed. Buyer’s funds are depositedwith the escrow company, which thenremits to the seller on the buyer’s behalf.In order to facilitate the transfer ofproperty from one owner to another, thebest escrow companies will:

• Prepare, review and/or revise escrowinstructions

• Determine the legal ownership andstatus of the property through a titlesearch

• Request a beneficiary’s statement ifa debt is to be assumed by the buyer

• Confirm that the new lender’sinstructions are met

• Confirm that the property meetsrequirements imposed by the lenderand/or buyer

• Ensure all legal documentation iscomplete, including the recording ofthe deed

• Comply with the time limits imposedin the instructions

• Close escrow when all instruction(buyer’s, seller’s, and lender’s) havebeen fulfilled

• Disburse funds as instructed,including all related fees (title fees,commission, payoff, etc.)

• Prepare a final statement for allconcerned parties

Banks, savings and loans, and titlecompanies, as well as independentescrow firms that are licensed by the stateto perform escrows in California. Theirrecords are open to inspection by aRegulatory Agency. In addition, escrowcompanies furnish the state with annualaudits of their books, and all escrow fundsmust be kept in a trust account. Thus, thestate helps ensure that all escrowcompanies are properly managed andtruly act as impartial third parties to anyreal-property transaction.

Simply stated, escrowis the involvement of animpartial third party in areal estate transaction.The basic concept ofescrow is to ensure thatboth the buyer andseller are protectedduring any real estatetransaction services.

You may have already heard phrases such as ‘the house fell out of escrow’ or‘we’re waiting for escrow to close’. So just what is escrow anyway? And whatdoes it mean to the homebuyer or seller?

Life of an Escrow

Order is opened atthe Escrow Company

Calendar Estimate Close of Escrow Date

Order payoffs

Receive payoffs

Prepare deed

Verify terms

Prepare Seller’sInstructions

Seller executesinstructions

and documents

Receive new loandocuments

Prepare any necessarydocuments

Order & receive newfire insurance

Prepare Buyer’sInstructions

Buyer executesinstructions and

documents

Deposit cashier’s checkfor balance of funds

Review File

Title Departmentmails out policies to

applicable parties

Send recordingpackage & policywrite up to Title

Department

Close escrow - prepare finalclosing statements, (RESPA),

checks, letters, etc.Dispense same.

Give Title Departmentapproval to record

Receive wire funds from lender

Prepare for Record

Recorder mails outdocuments to

applicable parties

Order Prelim

Examine prelim upon receipt

Follow thru with office notes(Statement of Identification,easement inspectons, etc.)

Order property inspection(if necessary)

Receive Statement of Identification& forward to Title Department

Obtain high liability approval

Send funding packageto lender

Buyer

Seller

Brokers

New Lender

Termite Company

Insurance CompanyAttend to post closing matters

Title InsuranceThis is an infortmation page from thebuyer’s packet:

Title insurance is a guarantee that you aregetting something for your money whenyou buy real property. Title insuranceguarantees that the ownership of theproperty you are buying is just as it’sstated in recorded documents.

Whenever you buy any real property, youexpect to acquire use of the property aswell as its ‘title’ or legal ownership. Youwant to be absolutely certain that theowner had clear title to it in the first placeand consequently was legally entitled tosell it to you. He might say that he ownsthe Brooklyn Bridge and you might wantto buy it from him on his terms. Unlessyou determine that he has clear title to itby securing a title insurance policy toprotect yourself, you will be giving himmoney for nothing, and he will have thelast laugh.

The property you are buying may have apast fraught with shady dealings,forgeries, divorce claims, or otherpeculiarities. There is no way you can beabsolutely certain that the sellers (or anyprevious sellers) ever held clear title to theproperty to transfer it over to you. Eventhough an owner has a deed and the rightto possess the land, he might not haveclear title because there may be a defector a cloud on it that even he does not knowabout. To protect yourself from suchclaims out of the past, you should securetitle insurance, something which isavailable in every state except Iowa foralmost every conceivable kind of interestin real property, including leaseholds,rights under a contract of sale, airspace,rights and easements, and mineral rights.

In addition, you must have title insuranceif you intend to borrow any money on yourproperty. Your lender, wanting to protectthe interest in the property that securestheir loan to you, will require a policy fortheir own protection to insure themselvesagainst any previous claims made on theproperty by legitimate claimants. You needa policy to protect yourself, too. You donot want to learn after the sale that youhave no rights to the property at all, andneither does your lender. They know thatyou will not repay the money they havelent you to buy a property unless you arelegally entitled to that property.

Synopsis

Donald is buying ahouse directly from anhonest, reputablefriend. He orders thePreliminary Report,which gives noevidence of titleproblems, so Donalddecides not to wasteany money on titleinsurance.

Donald’s friend may behonest and may havetold Donald everytinghe knows about thehouse, but what aboutthe previous owners?Did they have a validclaim to the property?

Many kinds of titledefects are so seriousthat they can render atitle unmarketable. It isthe title insurance youpurchase when youacquire real propertythat protects youagainst most of thesedefects.

But even if your real estate transaction isan all-cash deal, you should obtain titleinsurance. A grant deed by itself does notnecessarily give clear title to a property.

There may be outstanding claims andrights which cannot possibly bedetermined from the deed alone.

Title insurance protects the buyer andlender involved in a real propertytransaction against incompetent pastactions, clerical errors, someone who wasmentally incompetent having signed offan earlier deed, incorrect marital status,undisclosed heirs, improper interpretationof wills, signing by anyone withoutauthority, a minor’s signing, or a possibleforgery in the entire past chain of titlesignatures.

Remember that although you areprotected under your purchaseagreement against certain damages, onlythe seller is liable to you for thosedamages. Under a title insurance policy,the title company assumes that liability. Ifyou are not insured and you have toproceed with legal action against theseller for any defect in the title, you willhave to pay the legal expenses prior to ajudgment. Even if you do win a judgment,you might not be able to collect it, for youmight not be able to locate the seller orthe seller may not have the money to payyou. You could be left holding worthlesspaper. If, however, you have a titleinsurance policy, it could pay your legalcosts and provide you with coverage forany losses covered under the policy.

In summary, title insurance is essentialto you as a property buyer. Like othertypes of insurance policies, title insuranceaffords protection to the insured byguaranteeing that the insurer (the titleinsurance company) will reimburse theinsured for actual loss or damage ordamage under the conditions specified inthe policy. Unlike other insurance policies,title insurance insures against conditionsthat already exist, rather that againstthose which may or may not occur in thefuture.

Purpose of Title Insurance

A Title InsurancePolicy is a contractto indemnify thebuyer against loss ordamage occasionedby defects in the Titleas insured under thepolicy.

CLTA HOMEOWNER’S POLICY

This policy insures the owner (Buyer) of the property against defects that areascertained from the public records. It also provides protection against certain“off record” matters, such as Forgery, Capacity, and Competency. The CLTAHomeowner’s Policy covers such items:

• Ownership of the property• That there is access if the property abuts an open, public

dedicated street• Forgeries or failed conveyances in the chain of title• That the insured has a marketable interest in the real property

ALTA LENDER’S POLICY

This is an extended coverage policy that is required by all lenders. It insures thelender against loss or damage up to the policy limit, plus costs and attorneysfees. The ALTA Lenders Policy protects the lender from such items:

• Title being vested in a person other than the one shown in the policy.• Title defects• Liens and encumbrances• Lack of a right of access to the land• Marketability of title• Prior mechanics’ liens• Priority and validity of the lender’s lien on the property

UNLIKE other types of insurance (Life, Fire, Auto) that insure againstloss in the event of “FUTURE” happenings, Title Insurance protects theinsured against the possibility of loss resulting from a defect in the titlethat may have occurred in the “past.”

Title Insurance is written for a one-time premium. The protection continuesuntil the interest of the insured is conveyed or is transferred. Even when aninsured owner dies, his or her heirs remain protected under the terms of theTitle Insurance Policy.

Life of a Title Search

Your order is downloadedfrom escrow branch

Title Officer examines complete Search Package and writesPreliminary Report

Title Department begins title search

ComputerizedProperty Chains,

General Index,Sellers, Buyers

Searcherexamines

Title Chain &General Index

Tax/BondSearchesrequested

RequiredDocuments are

printed ordownloaded

EngineeringDepartment

preparesPlat Maps

Word Processing Department prepares Preliminary and entersinformation into Data Storage

Preliminary Report is emailed or delivered to Agents,Lenders, and Escrow Officers

New Docments/Demands & Statement of Informationsubmitted to Title Department

Escrow authorizes Recording

Documents recorded following day

Word Processing Department retrieves info from Data Storageand prepares Final Title Policies

Title Policies are mailed to Buyer and Lender

Title Officer enters Title Policy Info into Data Storage

Preliminary Title Report(See note on cover).

Preliminary ReportsAfter months of searching, you’ve finallyfound it - your dream home. But is itperfect? Will you be purchasing more thanjust a beautiful home? Will you also beacquiring liens placed on the property byprior owners? Have documents beenrecorded that will restrict your use of theproperty?

The preliminary report will provide you withthe opportunity, prior to purchase, toreview matters affecting your property,which will be excluded from coverageunder your title insurance policy unlessremoved or eliminated at the time of yourpurchase. To help you better understandthis often bewildering subject, theCalifornia Land Title Association hasanswered some of the questions mostcommonly asked about preliminaryreports.

What role does a preliminary reportplay in the real estate process?A preliminary report contains theconditions under which the title companywill issue a particular type of title insurancepolicy. The preliminary report lists (inadvance of purchase) title defects, liens,and encumbrances which would beexcluded from coverage if the requestedtitle insurance policy were to be issued asof the date of the preliminary report. Thereport may then be reviewed anddiscussed by the parties to a real estatetransaction and their agents. Thus, apreliminary report provides the opportunityto seek the removal of items referencedin the report which are objectionable to thebuyer prior to the purchase.

When and how is the preliminary reportproduced?Shortly after escrow is opened, an orderwill be placed, and the title company willbegin the process involved in producingthe report. This process calls for theassembly and review of certain recordedmatters relative to both the property andthe parties to the transaction. Examplesof recorded matters include a deed of trustrecorded against the property or a lienrecorded against the buyer or seller for

What is a prelimiaryreport?A preliminary report is areport prepared prior toissuing a policy of titleinsurance that showsthe ownership of aspecific parcel of land,together with the liensand encumbrancesthereon which will notbe covered under asubsequent titleinsurance policy.

an unpaid court award or unpaid taxes.These recorded matters are listednumerically as ‘exceptions’ in thepreliminary report. They will remainexceptions from title insurance coverageunless eliminated or released prior to thetransfer of title.

What should I look for when readingmy preliminary report?You will be interested, primarily, in theextent of your ownership rights. Thismeans you will want to review the owner-ship interest in the property you will bebuying as well as any claims, restrictions,or interests of other people involving theproperty. The report will note in astatement of vesting the degree, quantity,nature, and extent of the owner’s interestin the real property. The most commonform of interest is ‘fee simple’ or ‘fee’ whichis the highest type of interest an ownercan have in land. Liens, restrictions, andinterests of others that are being excludedfrom coverage will be listed numericallyas ‘exceptions’ in the preliminary report.These may be claims by creditors whohave liens or liens for payment of taxesor assessments. There may also berecorded restrictions, which have beenplaced in a prior deed or contained in whatare termed CC&R’s - covenants,conditions and restrictions. Finally, a priorowner may have given interests tosomeone which limit your use of theproperty. When you buy property you maynot wish to have these claims orrestrictions on your property. Instead, youmay want to clear the unwanted itemsprior to purchase, In addition to thelimitations noted above, a printed list ofstandard exceptions and exclusions listingitems not covered by your title insurancepolicy may be attached as an exhibit itemto your report. Unlike the numberedexclusions, which are specific to theproperty you are buying, these arestandard exceptions and exclusionsappearing in title insurance policies. Thereview of this section is important as it setsforth matters which will not be coveredunder your title insurance policy but whichyou may wish to investigate, such asgovernmental laws or regulationsgoverning building and zoning.

How do I go aboutclearing unwantedliens andencumbrances?You should carefully

review the preliminary

report. Should the title

to the property be

clouded, you and your

agents will work with

the seller and the

seller’s agents to clear

the unwanted liens and

encumbrances prior to

taking title.

Plan yourpartnershipIf you buy a house withpartners, it’s importantto set up a partnershipagreement that coversthese points:

• Who pays formaintenance andrepairs• Who handlespayment of propertytaxes, maintenance,and repairs• How much notice apartner must give inorder to sell• How other partnerscan buy out a partnerwho wants to sell• How to makedecisions and settle

disputes

Holding Title

Saving on Property TaxesProperty taxes are rising in many states andlocal jurisdictions, so make sure youunderstand your state’s tax system andknow how to monitor what you pay. Checkwith your local tax assessor for information.You can deduct property taxes from federaltaxes and from many state taxes, which canadd up to a significant tax advantage in someareas. Make sure that your property taxassessment is in line with comparablehomes in your area. If property values aredeclining, you may be paying too much. Hereare three ways to save:

Find out whether a portion of your home’svalue is exempt.This varies by state. Florida, for example,exempts $25,000 per home from taxes.

Synopsis

There’s more than oneway to take possessionof a piece of property,and each choice haslegal, tax and estate-planning implications.Take time to think abouthow you should taketitle on your home, andget expert advice if youneed it. Once you takepossession, it pays tomonitor your propertytaxes.

If you are elderly, a veteran, or disabled, findout if you’re entitled to a property tax break.This varies by state. Check with your localtax assessor or financial advisor.

Challenge your assessment if you thinkit’s wrong.To find out whether your assessment is toohigh, look at records of recent sales at theassessor’s office or online. As many as 50percent of taxpayers who appeal theirassessments get them cut and savehundreds of dollars in property taxes. Checkwith your local tax assessor about the bestprocedure to follow.

Content provided by Inman DeciSion Support. The manner of holding title has significant legal, tax, or estate-planning consequences in addition to those summarizedabove. ALWAYS consult your attorney and/or accountant to ensure you have considered all ramifications of this important decision.

Don’t wait to decide how you want to take title to the home you buy (see note on cover),especially if you make the purchase with another person. Your attention may be focusedon closing the deal and planning your move, but it’s important to take some time to consideryour new responsibilities as a homeowner. Start thinking about how you legally own yourhome. If you feel you need expert help to make this decision, consult a lawyer or financialadvisor.

Also known as ownershipin severalty; owner hassole right to use anddisposition of property

Significantly reduces taxliability in most cases;property passes to heirsthrough probate

Co-owners hold titleequally; both must agreeon use and disposition ofproperty

Upon death of co-owner,property passes tosurvivor(s) without goingthrough probate

Owners hold titleequally; both must agreeon use and disposition ofproperty

Tax liabilities and benefitsshared by both; upon spouse’sdeath, half of property goes tosurvivor and other half todesignated heir(s) throughprobate; if no heirs designated,it passes to survivor

Community property(available only toArizona, California,Idaho, Louisiana,Nevada, New Mexico,Texas, Washington andWisconsin residents)

Community propertywith right of survivorship(available in selectstates, effective inCalifornia July 1, 2001)

Owners hold titleequally; both mustagree on use anddisposition of property

Tax liabilities and benefitsshared by both; upon spouse’sdeath, property automaticallygoes to survivor, who becomessole owner

Tenancy in common

Co-owners hold title equallyor unequally; individual co-owner doesn’t need consentof others to use or dispose ofindividual interest

Tax liabilities and benefits applyto each individual; upon death ofco-owner, property passes todesignated heir(s) throughprobate

Partnership holds title;partnership sets parametersfor use and disposition ofproperty; partnership not liablefor individual circumstancesthat could affect title (such asbankruptcy)

Tax liabilities and benefits applyto partnership; upon death ofone partner, partnership interestpasses to designated heir(s),which could be partner(s)

Sole ownership

Joint tenancy

Partnership

Two or more homebuyers (marriedcouples andunrelated co-owners often taketitle this way)

TITLE OPTION LEGAL ISSUES CONSEQUENCES

Married homebuyers

Married homebuyers

Unrelated homebuyers who areconsidered co-owners(condominiumowners, forexample)

Unrelated homebuyers

Individual homebuyer

The Appraisal

WARNING:Why Appraisals go Awry

1. The appraiser has inadequateinformation about the property.

2. The appraiser is inexperienced orlacks adequate training.

Having an idea of what is involved inappraising a piece of property can greatlyhelp in maximizing the appraised value andavoiding costly details and re-inspections.The appraisal process consists of severalsteps. The following are the major steps inthe sequence normally followed byappraisers:

1. Research the subject property as tosize, bedrooms, year built, lot sizeand square footage.

2. Gather data on recent sales in thesubject property’s neighborhood. Theappraiser needs to locate at leastthree (and preferably more) similarsized homes that have sold andclosed escrow in the neighborhood.The homes need to be within closeproximity of the subject property andsold within the past six months. Thehomes are considered the compar-able properties or ‘comps’ forshort.

3. Field inspection consists of two parts:first, the inspection of the subjectproperty and second, the exteriorinspection of the comparableproperties which have been selectedto estimate the value of the subjectproperty.

The subject property inspection consists oftaking photographs of the street scene, frontof the home, and rear of the home whichmay include portions of the yard. Theappraiser will make an estimated value ofthe home. He will also draw a floor plan ofthe home while doing the inspection.The inspection of the comparable propertiesis limited to an exterior inspection. Forfeatures that cannot be seen from the street,the appraiser has reports from MultipleListing Service (MLS), California MarketData Cooperative (CMDC), county publicrecords and appraisal files along with othersources to help determine the condition andamenities of the comparables. After the fieldinspection has been completed, theappraiser must determine which comparableproperties most resemble the subjectproperty, making slight adjustments in valuefor any differences between them. Aftermaking required adjustments, the appraisermust go through the reconciliation processwith the three comparable properties todetermine a final estimated value. Thismethod of estimating value is called theDirect Sales Comparison Approach to Value,and it accounts for nearly all of theconsiderations in determining value ofsingle-family homes.It is important to consider that the appraiserwill be taking photographs of the street sceneand of the front of the subject property. Thestreet scene gives the lender an idea of the

SynopsisAn appraisal is a third-party estimate of thevalue of a piece ofproperty at a particularpoint in time. It canaffirm your offer priceor block yourtransaction entirely.Understand how realestate appraisals andappraisers work so youcan solve any problemsthat come up.

Find a GoodAppraiser

Ask your lender. If youchoose an approvedappraiser, you may nothave to pay for therequired appraisal whenyou apply for a loan.Several national appraisalorganizations can alsogive you names of localmember in goodstanding.

American Society ofAppraisers(800) 272-8258

Appraisal Institute(312) 335-4100

National Association ofReal Estate Appraisers(480) 948-8000

type of neighborhood in which the home islocated. The photograph of the front of thehome gives the lender an idea of itscondition and curb appeal. Finally, aphotograph of the back of the home andpart of the rear yard is taken.

Many homeowners do not take care of therear portion of their homes and back yards.For this reason, the rear photograph isrequired.In most cases (over 90 percent of the time),what you see in the condition of the exteriorof the home will be repeated almost exactlyin the interior.An appraiser will call in advance to set upthe appointment to inspect the home. At thattime, any information about the size of thehome, number of bedrooms, number ofbathrooms, pool, enclosed patio, etc.,should be supplied. The more that is knownabout the property prior to the inspection,the better the appraiser can focus onresearching the most similar comparables.

Boosting the AppraisalTo fight a lowball appraisal:Get a copy of the report. You cansuccessfully argue to raise the estimate ifyou show that the appraiser overlooked avaluable feature or failed to consider arecent comparable sale for a higher price.

Involve your loan representative. The lendercan override the estimate or order a newreport from another appraiser.

Renegotiate. A seller may accept less thanyou originally agreed to pay in order to avoidputting the house back on the market.

Increase your down payment. The lendermay overlook a low appraisal if you put moremoney down.

Quick TakeIf you have any questions about the valueof the house you bid on, add an appraisalcontingency to your purchase offer. Thisprovision stipulates that the property mustappraise for at least the purchase price youoffer. If the appraisal comes in lower, youcan back out of the deal or renegotiate theprice.

The InspectionWhat to Expect at the Inspection

The purchase contract will likely containprovisions allowing you variousinspections of the property. The purposeof these inspections is to educate youas to the physical condition of theproperty you are purchasing.While these inspections do not provideguarantees of the condition of theproperty, they do provide valuableinformation to you as a buyer. It isimportant to remember that yourpurchase contract may provide forwithdrawal from the contract if thesereports are unsatisfactory to you, butinspections should not be considered anopen door to renegotiation of thepurchase price.

Structural Pest Control Inspection

Often referred to as a ‘Termite Report’the Structural Pest Control is conductedby a licensed inspector. In addition toactual termite damage, the report willindicate any type of wood destroyingorganisms that may be present, includingfungi (sometimes called ‘dry rot’), whichgenerally results from excessivemoisture.

Section I - Conditions

Most pest reports classify conditions asSection I or Section II items. Section Iconditions are those which are ‘active’or currently causing damage to theproperty. Generally, Section I items needto be corrected before a conventionallender will make a loan on a home.

Section II - Conditions

Those items, which are not currentlycausing damage, but are likely to if leftunattended are Section II Conditions. Apossible Section II item is a plumbingleak where the moisture has not yetcaused fungus decay.

Who Pays?

Your purchase contract will specify whois responsible for the cost of theinspection and making these corrections.This is a negotiable item and should beconsidered carefully.

Home Warranty

Home protection plansare available forpurchase by the selleror buyer. Such plansmay provide additionalprotection of certainsystems andappliances in your newhome.

Physical Inspection

The Physical Inspection Clause in yourpurchase contract, when initialed by bothparties, allows you the right to have theproperty thoroughly inspected. This isusually done through a general homeinspection. While home inspectors arenot currently required to have a license,most are, or have been, generalcontractors. The inspection and theresulting report provide an overallassessment of the present condition ofthe property.

What is inspected?

The home inspection covers items suchas exterior siding, paint, flooring,appliances, water heater, furnace,electrical service, plumbing, and othervisible features of the property. This is ageneral inspection and will often call foradditional inspections by specific trades,such as roof and furnace inspections.

Further Inspections

If conditions warrant, the home inspectormay recommend a Structural EngineerReport. Such a report would identifystructural failures and detailrecommended corrections.

Geological Inspection

You may also elect to have a GeologicalInspection to educate yourself as to thesoil conditions at the home you arepurchasing. This inspection is performedby a geological engineer and involvesnot only physically inspecting theproperty but also researching pastgeological activity in the area. Theprimary purpose of a geologicalinspection is to determine the stabilityof the ground under and around thehome.

SynopsisThe sellers mustdisclose the knowncondition of theproperty to the buyer.

Full DisclosureCarefully read the RealEstate TransferDisclosure statement withyour real estate agent.

Full Disclosure

Full Disclosure - It’s the lawRecent legal decisions and new legislation provide that the seller has aresponsibility for revealing to you the true condition of the property. The concept ofselling a property ‘as is’ (with the buyer assuming all responsibility for determiningthe condition of the property) is not popular in the present marketplace. Thisinformation should be made available to the buyer as called for in the purchasecontract.

Charm or Irritant?Having lived in this property, the seller has become accustomed to the peculiarconditions that may have developed. But for the buyer, that peculiarity may be morethan a mere inconvenience. It may be an irritant that the buyer cannot tolerate. It isimportant for the seller to review the condition of the property with the real estateagent and take special note of any problems on the Disclosure Statement. CivilCode Section 1102 requires that the seller provide the buyer with a completed ‘RealEstate Transfer Disclosure Statement.’

All Systems Go

A basic assumption in every sale is that the house and systems in the house arefunctional. For example, the roof will hold out the rain and sun, the hot water heaterwill provide hot water, and the heater will provide heat. If it is known that any of thesystems do not function properly, such facts should be included in the purchaseagreement and acknowledged by the buyer.

As IsAn ‘as is’ purchase is perfectly acceptable as long as the buyer understands exactlywhat the ‘as is’ condition entails. Thus, it can be said in the purchase agreement thatthe buyer accepts the roof and the plumbing and the electrical system in theirpresent condition and acknowledges that they may have defects. Thisacknowledgement provides a defense for the seller if it is later claimed he did notdisclose the problems.

Environmental HazardsIt is required that the seller disclose any knowledge of environmental hazards inthe home or area, such as asbestos or pollutants. The buyer will be provided witha Real Estate Transfer Disclosure Statement filled out by the seller as to hisawareness or knowledge on this subject.

Just a TipEnvironmental Hazards: A Guide for Homeowners and Buyers is a handbookprepared by the California Department of Real Estate to inform you of varioustoxins and hazardous wastes and how to deal with them.

Proposition 90

Currently allows ahomebuyer age 55years or older totransfer their propertytax base from onecounty to another inthe following counties:

AlamedaKernLos AngelesModocOrangeSan DiegoSanta ClaraSan MateoVentura

Proposition 60

Allows a homebuyer age55 years or older totransfer their propertyfrom one property toanother within the sameparticipating county.

Property Taxes

Tax Calendar

January 1 - Assessment Date

Taxes become a lien at 12:01 a.m. but are not yet due and payable for the Fiscal TaxYear which starts July 1. Thereafter, title evidence must show taxes as a lien for thecoming Fiscal Tax Year.

February 1 - First Installment delinquent at 5:00 p.m.

March 1 - Taxes on Unsecured Roll Due

April 10 - Second Installment/ delinquent at 5:00 p.m.

10 percent penalty plus $10 administrative charge attaches. If April 10 falls on

a weekend or holiday, taxes are not delinquent until 5:00 p.m. the next business day.

April 15 - Last day to file for Veterans, Senior Citizens, or Homeowner’sExemptions. To be eligible for applicable exemptions, you must own and

occupy the property on March 1.

June 30 - Property tax may become defaulted

If you fail to pay either or both installments by 5:00 p.m., property tax becomesdefaulted and additional costs and penalties accrue. If June 30 falls on a weekend orholiday, taxes must be paid by 5:00 p.m. of the preceding business day.

July 1 - Beginning of Fiscal Year (July 1 to June 30 of the following year)

July 1 - Properties with delinquent taxes sold to State

July 1 - Owners to be informed of new values

July - First Monday - Assessment Appeals Board

July 30 - Last day to advise owners of new values

August - Sale numbers assigned for delinquent taxes

September - Tax rates set

October - End of month tax bills mailed

November 1 - First Installment Due (First installment - July 1 to December 31)

December 10 - First Installment becomes delinquent at 5 p.m.10 percent penalty added to taxes due. If December 1 falls on a weekend or holiday,taxes are not delinquent until 5 p.m. the next business day.

Supplemental Taxes

Date AmountAugust 1 .92September 1 .83October 1 .75November 1 .67December 1 .58January 1 .50February 1 .42March 1 .33April 1 .25May 1 .17June 1 .08

Supplemental taxes began in July 1983, butyou and your neighbors still may not knowwhat they are, what they do, or how theyaffect your property. To help you betterunderstand this confusing subject, theCalifornia Land Title Association hasanswered some of the questions mostcommonly asked about supplemental realproperty taxes.

When did this tax come into effect?The Supplemental Real Property Tax lawwas signed by the governor in July, 1983and is part of an ambitious drive to aidCalifornia’s schools. This property taxrevision is expected to produce over $300million per year in revenue for schools.

How will supplemental property taxesaffect me?If you don’t plan to buy new property orundertake new construction, this new taxwill not affect you. But, if you do wish to doeither of the two, you will be required to paya supplemental property tax which willbecome a lien against your property as ofthe date of ownership change or the dateof completion of new construction.

Can I pay my supplemental tax bill ininstallments?All supplemental taxes on the secured rollare payable in two equal installments. Thetaxes are due on the date the bill is mailedand are delinquent on specified datesdepending on the month the bill is mailedas follows:

1. If the bill is mailed within the months ofJuly through October, the firstinstallment shall become delinquent onDecember 10 of the same year. Thesecond installment shall becomedelinquent on April10 of the next year.

2. If the bill is mailed within the months ofNovember through June, the firstinstallment shall become delinquent onthe last day of the following month inwhich the bill is mailed. The secondinstallment shall become delinquent onthe last day of the fourth calendar monthfollowing the date the first installmentis delinquent.

When and how will I be billed?‘When’ is not easy to predict. You couldbe billed in as few as three weeks, or itcould take over six months. ‘When’ willdepend on the individual county and theworkload of the County Assessor, theCounty Controller/Auditor, and the County

The County Auditor finds

that the supplemental

property taxes on your

new home would be

$1,000 for a full year. The

change of ownership took

place on September 15th

with the effective date

being October 1st, the

supplemental property

taxes would, therefore, be

subject to a pro-ration

factor of .75 and your

supplemental tax would

be $750.

Tax Collector. The Assessor will appraiseyour property and advise you of the newsupplemental assessment amount. At thattime you will have the opportunity todiscuss your valuation, apply for aHomeowner’s Exemption, and learn aboutyour right to file an Assessment appeal.The County will then calculate the amountof the supplemental tax, and the TaxCollector will mail you your supplementaltax bill. The supplemental tax bill willidentify (among other things) the followinginformation: the amount of thesupplemental tax and the date on whichthe taxes will be delinquent.

How will the amount of my bill bedetermined?A formula is used to determine your taxbill. The total supplement will be proratedbased on the number of months remaininguntil the end of the tax year, June 30.

Can you give me an idea of how theprobation factor works?The supplemental tax becomes effectiveon the first day of the month following themonth in which the change of ownershipor completion of the constructionoccurred. If the effective date is July 1,then the following table of factors is usedto compute the supplemental assessmenton the current tax roll:

Real estatetransactions arecomplicated and canbe confusing. CherieMiller & Associateswill be happy toanswer anyquestions that youmay have.

Speed up the Closing

How to Speed up the Closing of Your Next Escrow

To help speed up the closing of an escrow, the following things arenecessary to the escrow should be furnished at the outset:

1. Correct legal description of the property. (Call your Escrow

Company for a legal description before you go into escrow.)

2. Correct street address - re: number, avenue, drive, street, etc.

3. Full names of parties involved in the escrow. (Initials are not

enough. Also, if a married couple is involved, the first name of the

wife, as well as the husband, is essential.)

4. Complete Social Security Number(s)

5. Information as to how the buyer(s) want to take title.

6. Names of all lien holders, both mortgage companies and private

parties.

7. Terms of new encumbrances or terms of existing encumbrances.

8. Fire insurance information - new policy or assuming existing

policy.

9. Current tax bill for pro-ration purposes.

10. Rental statement - list of tenants, their rental amounts, and any

security deposits.

AFTER YOUR ESCROW IS OPEN

1. When calling your escrow office, have your escrow number and buyer

and/or seller’s names.

2. Keep your escrow officer informed on any matters that may affect

your closing.

3. The listing salesperson will take care of the termite report.

4. The selling salesperson will take care of the insurance policy with the

buyers.

The more information you make available to your escrow officer,the smoother your escrow will go and the sooner it will close.

Know before you close. It’s Official. The CFPB’s TILA-RESPA Integrated Disclosure rule implementation is official!Use this checklist to prepare for your transactions written on or after October 3, 2015.

When opening escrow, be sure to provide your escrow officer with the following:

q Fully executed copy of the Purchase Contract with complete property address including zip code, include property profile if available. q All amendments, counter offers, addendums.q Completed TERM SHEET.q Earnest money.q Statement of Information for buyer(s).q Statement of Information for sellers(s). q Existing loan information.q Direct who is to receive electronic copies of all documents such as preliminary report, CC&R’s etc.q Let your escrow officer know immediately if the seller is a non-resident as additional disclosures may be required.q If seller or buyer is a corporation, submit the Articles of Incorporation, bylaws, and a corporate resolution authorizing the sale or purchase of the subject property.q If the seller or buyer is a partnership, submit a copy of the partnership agreement and a copy of the recorded statement/certificate of partnership.q If the seller or buyer is a trust entity, submit a copy of the trust agreement and a signed verification of trustee.q If you plan to go out of the country and in need of a Power of Attorney, please notify your escrow officer immediately.

Within first 10 days of escrow: q Order all inspections.q If corrective work is required, provide information to your escrow officer as to who is paying the fee.q Follow-up with the buyer(s) to make sure that they have submitted all documents that their lender requires.q Review the Preliminary Title Report carefully.q Educate the buyer(s) on the importance of “Homeowner’s Title Policy.”q Inform your escrow officer of any changes in contract.q Let your escrow officer know how your buyer(s) are taking title on the property.q Constant Communicate between all parties is KEY TO A SMOOTH CLOSING!

3 days prior to loan documents: According to the consumer Financial Protection Bureau’s final rule, the creditor must deliver the Closing Disclosure to the consumer at least three business days prior to the date of consummation of the transaction of Nov. 24, 2015.

10 days before Closing: q Ensure all amendments and exhibits are provided to lender.q Provide any additional amendments to contract.q Ensure all seller-paid closing costs are in place and have NO changes.q Ensure Home Warranty is in place.q Verify with escrow officer on all funds needed for closing.q Carefully review pre-audit settlement statement.q Conduct client walk-through.

What to expect at Signing Appointment (Consummation Date)?q Expect to sign loan documents at the escrow company one or two business days before closing date.q If funds are required to close, be prepared to bring a cashier’s check 24 hours before recording. or wire transfer the same day as closing.q Have a valid photo ID available at signing, acceptable ID includes: Driver’s License, State ID, Passport, or Green Card.

Moving ChecklistBefore you Move

Address Changeq Post Office - Give forwarding addressq Charge Accounts - Credit Cardsq Subscriptions - Notice requires several weeksq Friends and Relatives

Bankq Transfer funds - arrange check cashing

in new cityq Arrange credit references

Insuranceq Notify company of new location for coveragesq Lifeq Healthq Fireq Auto

Utility Companiesq Gas, light, water, telephone, fuel, garbageq Get refunds on any deposits made

Delivery Serviceq Laundryq Newspaper

Medical, Dental, Prescriptionsq Ask doctor and dentist for referralsq Transfer needed prescriptionsq Eyeglasses q X-raysq Obtain birth recordsq Obtain medical records

Petsq Ask about regulations for licensesq Tagsq Vaccinations

And don’t forget to:q Empty freezer; plan use of foodsq Defrost freezer and clean refrigerator.

Place charcoal inside to dispel odors.q Have appliances serviced for movingq Make arrangements for TV and Antennaq Clean rugs or clothing before moving; have them

moving-wrappedq Check with your moving counselor; insurance

coverage, packing and unpacking labor, arrivalday, various shipping papers, method and time ofexpected payment.

q Plan for special care needs of infants or pets

Moving Day

q Carry enough cash or traveler’s checks to covercost of moving services and expenses until youmake banking connections in your new city

q Carry jewelry and documents yourselfq Plan for transporting pets; they are poor traveling

companions if unhappyq Carry traveler’s checks for quick, available funds

q Let a close friend or relative know the route andschedule you will travel including overnight stops;use him or her as message headquarters

q Double check closets, drawers, and shelves tobe sure they are empty

q Leave all old keys needed by new tenant orowner with your real estate agent or neighbor

And at your New Address

q Obtain certified check or cashiers checknecessary for closing real estate transaction

q Check on service of telephone, gas, electricity,water, and garbage

q Check pilot light on stove, hot water heater,and furnace

q Have appliances checkedq Ask mail carrier for mail he or she may be holding

for your arrivalq Have new address recorded on driver’s licenseq Visit city offices and register for voting

q Register car within five days after arrival in state,or a penalty may have to be paid when gettingnew license plates

q Obtain inspection’s sticker and transfer motorclub membership

q Apply for state driver’s licenseq Register family in new place of worshipq Register children in schoolq Arrange for medical servicesq Doctorq Dentistq Veterinarian

Important Numbers

So Cal Edison 800-655-4555

Verizon 800-Verizon

United States PostalService 800-275-8777

DMV 800-777-0133

Voter Registration 800-345-8683

Real Estate Dictionary

AAdjustable Rate Mortgage (ARM) - A mortgage withan interest rate that changes over time in line withmovements in the index. ARMs are also referred to asadjustable mortgage loans (AMLs) or variable ratemortgages (VRMs).

Adjustment Period-The length of time betweeninterest rate changes on an ARM. For example, a loanwith an adjustment period of one year is called a one-year ARM, which means that the interest rate canchange once a year.

Affidavit - A sworn statement in writing.

Amortization - Repayment of a loan in equalinstallments of principal and interest, rather thaninterest only payments.

Annual Percentage Rate (APR) - The total financecharge (interest, loan fees, points) expressed as apercentage of the loan amount.

Assessment - The imposition of a tax, charge or levy,usually according to established rates.

Assessor - A public official who evaluates propertyfor the purpose of taxation.

Assumption of Mortgage - A buyer’s agreement toassume the liability under an existing note that issecured by a mortgage or deed of trust. The lendermust approve the buyer in order to release the originalborrower (usually the seller) from liability.

BBalloon Payment - A lump sum principal payment dueat the end of some mortgages or other long-term loans.

Binder - Sometimes known as an offer to purchase oran earnest money deposit request. A binder is theacknowledgment of a deposit along with a brief writtenagreement to enter into a contract for the sale of realestate.

CCap - The limit on how much an interest rate or monthlypayment can change, either at each adjustment or overthe life of the mortgage.

CC&R’s (Covenants, Conditions and Restrictions)- A document that controls the use, requirements andrestrictions of a property.

Certificate of Reasonable Value (CRV) _ A documentthat establishes the maximum value and loan amountfor a VA guaranteed mortgage.

Chain of Title - A term applied to the past series oftransactions and documents affecting the title to aparticular parcel of land.

Closing Statement - The financial disclosurestatement that accounts for all of the funds receivedand expected at the closing, including deposits fortaxes, hazard insurance, and mortgage insurance.

Condominium - A form of real estate ownership inwhich the owner receives title to a particular unit andhas a proportionate interest in certain common areas.The unit itself is generally a separately owned spacewhose interior surfaces (walls, floors, ceilings) serveas boundaries.

Contingency - A condition that must be satisfied beforea contract is binding. For instance, a sales contractmay be contingent upon the buyer obtaining financing.

Conversion Clause - A provision in some ARMs thatenables the buyer to change an ARM to a fixed-rateloan, usually after the first adjustment period. The newfixed rate is generally set at the prevailing interest ratefor fixed-rate mortgages. This conversion feature maycost extra.

Conveyance - An instrument by which title istransferred; a deed. Also, the act of transferring title.

Cooperative - A form of multiple ownership in which acorporation or business trust entity holds title toproperty and grants occupancy rights to shareholdersby means or proprietary leases or similararrangements.

Finance charge - The total cost a borrower must pay,directly or indirectly, to obtain credit according toRegulation Z.

GGraduated payment mortgage - A residentialmortgage with monthly payments that start at a lowlevel and increase at a predetermined time.

Grantee - A person who acquires an interest in landby deed, grant, or other written instrument.

Grantor - A person, who, by a written instrument,transfers to another an interest in land.

GRI (Graduate Realtors Institute) - A professionaldesignation granted to a member by the NationalAssociation of Realtors® who has successfullycompleted three courses covering law, finance andprinciples of real estate.

HHome Inspection Report - A qualified inspector’sreport on a property’s overall condition. The reportusually includes an evaluation of both the structureand mechanical systems.

Home warranty plan - Protection against failure ofmechanical systems within the property.

HUD 1 - A form settlement (closing) statement requiredby the U.S. Department of Housing and UrbanDevelopment (HUD) in which federally relatedmortgages are being made on residential properties.It is a balance sheet showing the source of funds andthe distribution of funds in connection with the purchaseand/or mortgaging of residential property.

IImprovements - Those additions to raw lands tendingto increase value, such as buildings, streets, sewer,etc.

Indemnify - To make payment for a loss.

Real Estate Dictionary

CCRB (Certified Residential Broker) - To be certified,a broker must be a member of the National Associationof Realtors®, have five years experience as a licensedbroker, and have completed five required ResidentialDivision courses.

DDeed - A written document by which the ownership ofland is transferred from one person to another.

Due-on-Sale Clause - An acceleration clause thatrequires full payment of a mortgage or deed of trustwhen the secured property changes ownership.

EEarnest Money - The portion of the down paymentdelivered to the seller or escrow officer by the buyerwith a written offer as evidence of good faith.

Easement - An interest in land owned by another thatentitles its holder to a specific limited use, such aslaying a sewer, putting up electric power lines, orcrossing the property.

Encumbrance - A lien, liability or charge upon a parcelof land.

Escrow - A procedure in which a third party acts as astakeholder for both the buyer and the seller, carryingout both parties’ instructions and assumingresponsibility for handling all of the paperwork anddistribution of funds.

FFee Simple - An estate in which the owner hasunrestricted power to dispose of the property as hewishes, including leaving by will or inheritance. It isthe greatest interest a person can have in real estate.

Federal National Mortgage Association (FNMA) -Popularly known as Fannie Mae, a privately ownedcorporation created by Congress to support thesecondary mortgage market. It purchases and sellsresidential mortgages insured by FHA or guaranteedby the VA, as well as conventional home mortgages.

FHA loan - A loan insured by the Insuring Office of theDepartment of Housing and Urban Development; theFederal Housing Administration.

Real Estate Dictionary

IIndex - A measure of interest rate changes used todetermine changes in an ARM’s interest rate over theterm of the loan.

Ingress - The right to enter a tract of land. Often usedinterchangeably with ‘access.’

JJoint Tenancy - An equal undivided ownership ofproperty by two or more persons. Upon death of anyowner, the survivors take the decedent’s interest inthe property.

Judgment - A decree of a court. In practice this is thelien or charge upon the lands of a debtor resulting fromthe Court’s award of money to a creditor.

LLender’s Policy - A form of title insurance policy whichinsures the validity, enforceability, and priority of alender’s lien. This form does not provide protectionfor the owner.

Lien - A legal hold or claim on a property as securityfor a debt or charge.

Loan Commitment - A written promise to make a loanfor a specified amount on specified terms.

Loan-to-Value Ratio - The relationship between theamount of the mortgage and the appraised value ofthe property, expressed as a percentage of theappraised value.

Lot - A part of a subdivision or block having fixedboundaries ascertainable by reference to a plat orsurvey.

MMargin - The number of percentage points the lenderadds to the index rate to calculate the ARM interestrate at each adjustment.

Mechanic’s Lien - A lien allowed by statute tocontractors, laborers, and material suppliers onbuildings or other structures upon which work has beenperformed or materials supplied.

Metes and Bounds - A description of land by coursesand distances.

Mortgage Life Insurance - A type of term lifeinsurance often bought by mortgagors. The coveragedecreases as the mortgage balance declines. If theborrower dies while the policy is in force, the debt isautomatically covered by insurance proceeds.

NNegative Amortization - Negative amortization occurswhen monthly payments fail to cover the interest cost.The interest that is not covered is added to the unpaidbalance, which means that even after severalpayments, one could owe more than one did at thebeginning of the loan. Negative amortizations can occurwhen an ARM has a payment cap that results inmonthly payments that are not high enough to coverthe interest.

Note - The instrument evidencing the indebtednesssecured by a security instrument such as a mortgageor deed of trust.

OOrigination Fee - A fee or charge for work involved inevaluating, preparing and submitting a proposedmortgage loan. The fee is limited to 1 percentfor FHA and VA loans.

Ownership - The right to possess and use property tothe exclusion of others.

PPITI - Principal, interest, taxes, and insurance

Planned Unit Development (PUD) - A zoningdesignation for property developed at the same orslightly greater overall density than conventionaldevelopment, sometimes with improvements clusteredbetween open, commonareas. Uses may be residential, commercial orindustrial.

Point - An amount equal to 1 percent of the principalamount of the investment note. The lender assessesloan discount points at closing to increase the yieldon the mortgage to a position competitive with othertypes of investments.

T

Tenancy in Common - A type of joint ownership ofproperty by two or more persons with no right ofsurvivorship.

Title - The evidence of right which a person has to theownership and possession of land. Commonlyconsidered as a history of rights.

Title Insurance Policy - A policy that protects thebuyer, mortgagee, or other party against losses.

Tract - A particular parcel of land.

Trust - A property right held by one as a fiduciary forthe benefit of another.

Trustee - A person holding property in trust as afiduciary for the benefit of another.

VVA loan - A loan that is partially guaranteed by theVeteran’s Administration and made by a private lender.

Variable Rate Mortgage - A loan in which the interestrate fluctuates with the cost of funds or some otherindex.

Vendor - A seller of real property under land contract.

Vest - To pass to a person an immediate right orinterest.

Vestee - A non-legal term used by title insurers toindicate the owner of real property in a policy or report.

W

Warranty - A promise by the grantor of real propertythat he or she is the owner and will be responsible tothe buyer if title is other than represented.

Will - A written document providing for the distributionof property owned by a person after his or her death.

Real Estate Dictionary

PPolicy - A written contract of title insurance.

Power of Attorney - An instrument authorizing anotherto act on one’s behalf as his or her agent or attorney.

Power of Sale - A clause in a will, mortgage, deed oftrust, or trust agreement authorizing the sale or transferof land in accordance with the term of the clause.

Prepayment Penalty - A fee charged to a mortgagorwho pays a loan before it is due. This is not allowedfor FHA or VA loans.

Private Mortgage Insurance (PMI) - Insurancewritten by a private company protecting the lenderagainst loss if the borrower defaults on the mortgage.

Purchase Contract - A written document in which thepurchaser agrees to buy certain real estate and theseller agrees to sell under stated terms and conditions.Also called a sales contract or sales agreement,earnest / nest money contract, or agreement for sale.

RReal Property - Land, together with fixtures,improvements and appurtenances.

Realtor® - A real estate broker or associate active ina local real estate board affiliated with the NationalAssociation of Realtors®.

Regulation Z - The set of rules governing consumerlending issued by the Federal Reserve Board ofGovernors in accordance with the ConsumerProtection Act.

Right-of-Way - The right which one has to pass acrossthe lands of another. An easement.

SSet Back Lines - Those lines which delineate therequired distances for the location of structures inrelation to the perimeter of the property.

Survey - The process of measuring land to determineits size, location, and physical description and theresulting drawing or map.

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Lic. #01005011