BUYER’S GUIDE

A Complete Guide To The Home-Buying Process

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You are about to embark on the exciting journey of finding your ideal home. Whether it is your first home or your tenth home, a retirement home, or an investment property, the home-buying experience should be fun and exciting. Purchasing a home is an important decision and for most people, the largest financial purchase of their life. In fact, most people only choose a few homes in their lifetime. This Buyers Guide will make sure that you are well equipped and informed with up-to-date information for your big decision. Use its reference pages, note pages and agency explanations, as an invaluable guide on your home-buying journey. We suggest you keep this packet with you during your home-buying process. There are pages that contain important phone numbers, dates, and areas for notes to help you stay organized.

Barbara Radke

WELCOMEWELCOME

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Inside The Home Buyers Guide

About Us

The Buying Process

Your Credit & Loan

Finding A Home

Offer & Escrow

Moving & Packing

Glossary

Welcome

About Keller Williams

About the Radke Team

What Every Buyer Should Know

The Home-Buying Process

88 Types of Turbulence

Understanding Agency.: Who Works For Whom

The Advantages of a Buyer Agency Agreement

The Road Map to Your New Home

Home Search Criteria

Your Credit Score

Pre-Qualification and Pre-Approval

How Much Can You Afford?

Loan Application Checklist

Do’s & Don'ts In the Loan Process

The Neighborhood

The Home Tour

Contract-To-Close Flow Chart

Making an Offer

Behind the Scenes : What Happens Next?

Timeline & Transaction Information

Home Warranty Protection

Home Inspection

Contract Checklist

Real Estate “Closing”

Explanation of Closing Costs

Moving

Packing Checklist

Moving Checklist

Helping Children Cope With Moving

Transferring / Cancelling Utilities

Glossary

Table of ContentsTable of Contents

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About Keller WilliamsAbout Keller Williams

Often, we judge the caliber of people by the company they keep – this is why we would like you to

know a little bit about Keller Williams® Realty and our office within the Keller Williams® system.

Keller Williams® Realty was founded in Austin, Texas in 1983 with the specific premise that buyers

and sellers deserve the best service for their real estate needs. For more than 17 years, that

founding premise has been a major factor in the continued growth of Keller Williams® across

North America. Two visionaries lead Keller Williams® Realty – Gary Keller, founder and Chairman

of the Board, and Mo Anderson, Chief Executive Officer.

Because each Keller Williams® Market Center has grown within its respective community, Keller

Williams® real estate agents have intimate knowledge of each community's character, mood, and

growth potential. Due to the fact that the majority of Keller Williams® Associates live in the

communities and neighborhoods they serve, they are eager and capable of tackling unique

challenges that families encounter when selecting new homes.

At Team Radke, we are Real Estate Consultants. We are not agents or salespeople. What this

means is that we build fiduciary relationships with our clients. A fiduciary is someone who

represents your best interests.

We are a profit sharing company where associates are in partnership relationships with the

owners; this means that everyone at Keller Williams® Realty wants your home to sell because

everyone benefits.

The Keller Williams® culture is based upon a belief system that is summed up by this acronym:

WI4C2TS:

Win-Win……………...or no deal

Integrity………………do the right thing

Commitment…………in all things

Communication……..seek first to understand

Creativity ..…………..ideas before results

Customers……………always come first

Teamwork ...…………together everyone achieves more

Trust…………………..begins with honesty

Success ……………….results through people

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Trusted, Experienced, Respected As your preferred Real Estate Team, we deliver a dedicated consulting approach with the highest standards of personalized real estate service to each client we work with. Our many years of extensive residential real estate experience and targeted search approach will make the process of buying or selling your home easy for you!

Barbara Radke Barbara enjoyed a very successful sales career for over fifteen years in the office products sales industry where she was a regional manager for an International Writing Instrument Manufacturer. With a move into the Real Estate profession, Barbara obtained her CRS, E-Pro, CDPE, and SRES designations. Barbara has served as the Chairperson of the Rules and Compliance committee for the Conejo Valley Association of Realtors (CSMAR) and currently serves on the Grievance and Pro-Standards Committee. She is also a member of the CSMAR Real Estate Association enabling greater exposure for the listing of your

property. She provides piece of mind to clients when they know they have chosen to work with a REALTOR® committed to using the Internet with skill, integrity, and professionalism. Communication is a key element to having a successful transaction. Barbara prides herself on her communication with both her clients and vendors, and the relationships she has developed with other agents in the Real Estate Industry. Barbara was named the Top Listing Individual and Top Sales Individual in 2006. In 2007 and 2008, Barbara was one of the top 3 producers in the company. In 2010, Barbara earned the #1 award for individual agent of the Keller Williams® Westlake Village Market Center. As a partner, she is ranked as the #3 Realtor in the California Central Southern Region. In addition, she served on the Associate Leadership Council for the past four years.

Brittany Copsey Brittany’s years of working with entrepreneurs, business owners, realtors and forward-thinkers developed her skills in vision development, project management, marketing and effective systems implementation. After working in marketing and advertising for over five years Brittany took her rare clarity of vision that discovers unexplored avenues for leveraging individuals expertise effectively to grow their business and began applying it to Real Estate.

In 2011 Brittany joined the Conejo Valley Association of Realtors (CSMAR) as well as The Radke Agency. Brittany possesses the unique ability to see the big-picture view, gained during her travels and experiences living abroad, combined with a laser focus on organizing and details. Her successes include managing the development and publishing of an international magazine, organizing and event-planning for non-profit organizations and creating and producing information products. When applied to the marketing of our clients homes and helping the team manage the life of an es-crow, the skills she takes away from each of these experiences is Invaluable.

About The Radke AgencyAbout The Radke Agency

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With vision, integrity and passion, our team is committed to serving our clients by providing ongoing education, clear communication, and creative solutions in order to achieve a quality experience.

Building “ClientS For Life” is how we measure our success.

HEATHER CASE

Heather joined the Radke Agency after a successful sales career in the film

and television industries. She previously handled international film sales

for a Hollywood based film production company, where she frequented

film festivals to conduct business with major film distributors throughout

the world. Heather also worked for CBS Television in San Francisco, where

she represented both local and national advertising accounts and aided in

the production of various television and digital advertising campaigns.

After she and her family relocated back to her hometown of Westlake

Village, Heather made the move into real estate and has thoroughly enjoyed the process of

helping families and individuals find their dream homes. She became a licensed Realtor in

2014 and joined the Conejo Valley Association of Realtors (CSMAR).

Jennifer McMichael Jennifer’s strong interpersonal, communication and liaison skills allowed her to enjoy a successful career as an Executive Assistant to senior staff for over 15 years. As the right hand to business owners and high level executives, Jennifer’s commitment to excellence, efficiency and unwavering work ethic served to be invaluable. When returning to California in 2009, Jennifer decided to apply her skillful administrative skills to a new industry by joining The Radke Agency.

She became licensed in 2014.

Jennifer’s unique ability to grow positive relationships with clients and colleagues alike make her an instrumental member of our team. Her strong desire to help others and the pride she takes in her work are evident. From start to finish, Jennifer is dedicated to ensuring each transaction is handled with the same professionalism and quality. Her cheerful demeanor and attention to detail help the team remain client focused and clients are assured that they are supported through every step of what is often the

About The Radke AgencyAbout The Radke Agency

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Property taxes and qualified interests can be deductible on an individual’s federal income tax return. *

Often a home is the largest asset an individual has and is considered one of the most valuable investments available.

A portion of each amortized mortgage payment goes to the principal which is an investment.

A home is one of the few investments that you can enjoy by living in it.

We can usually show you any home whether it is listed with a company, a builder, or even a For Sale By Owner home.

Working through us to purchase a For Sale By Owner home can be very advantageous because someone is looking out for your best interest.

*Consult with a tax professional for details

What Every Buyer ShouldWhat Every Buyer Should Know Before PurchasingKnow Before Purchasing

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Your Loan Professional will provide you with a list of items you will need to complete your loan application so you’ll be prepared. (We have included a sample for you in the next section).

A homeowner can exclude up to $500,000 of capital gain tax if married and filing jointly or up to $250,000 if single or filing separately. The home must have been the taxpayer’s principal residence for the previous two years.*

Beginning May \07, 1997, there is no longer a requirement to purchase another home more expensive than the one sold. Homeowners are free to buy up or down with no tax consequences assuming their gain is less than the allowable amounts.*

It is important to have a Real Estate professional who is familiar with the neighborhood(s) where you want to live.

It is important to have a clear understanding who your Real Estate professional is representing in the transaction.

It is important to have a Real Estate professional who tells you upfront what they will do to keep you informed.

It is important to have a Real Estate professional who will provide you with the highest level of service and advice.

*Please contact a tax/financial professional for advice specific to you.

What Every Buyer ShouldWhat Every Buyer Should Know Before PurchasingKnow Before Purchasing

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Find a Realtor You Can Trust

Analyze Your Needs in a Consultation

Obtain Financial Pre-Qualification and pre-Approval

Select Properties

View Properties

Write an offer to Purchase

Negotiate and Counteroffer

Accept the Contract

Contact Title

Update Financial Info on the Mortgage Application

Secure Underwriting

Obtain Full Loan Approval

Remove Contingencies

Sign Loan Documents

Wire in Balance of Down Payment & Closing Costs

Close on the Property

GET THE KEYS!!

Earnest Money Deposit (Goes Toward Down Payment)

InspectionTitle

Verifications Appraisal

Conditions

Title Exam & Title Insurance

Credit ReportLoan Approval

THE HOME-BUYING PROCESS

Money Up Front:

Earnest Money (Usually 3% of sale price)

Inspection Fee

Appraisal

Credit Report

This is an overview to

help you understand the

home buying process.

Title Report s

Escrow Orders NHD, HOA and City Report Open Escrow

Inspections & Review Reports/Disclosures

Loan Conditions

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Things That Might Go Things That Might Go Wrong During A TransactionWrong During A Transaction

THE BUYER/BORROWER: 1. Does not tell the truth on loan application.

2. Has recent late payments on credit report.

3. Finds out about additional debt after loan

application.

4. Borrower loses job.

5. Coborrower loses job.

6. Income verification lower than what was

stated on loan application.

7. Overtime income not allowed by

underwriter for qualifying.

8. Applicant makes large purchase on credit

before closing.

9. Illness, injury, divorce or other financial

setback during escrow.

10. Lacks motivation.

11. Gift donor changes mind.

12. Cannot locate divorce decree.

13. Cannot locate petition or discharge of

bankruptcy.

14. Cannot locate tax returns.

15. Cannot locate bank statements.

16. Difficulty in obtaining verification of rent.

17. Interest rate increases and borrower no

longer qualifies.

18. Loan program changes with higher rates,

points and fees.

19. Child support not disclosed on application.

20. Bankruptcy/Short Sale within the last 2 yrs.

21. Mortgage payment is double the previous

housing payment.

22. Borrower/coborrower does not have steady

two-year employment history.

23. Borrower brings in handwritten pay stubs.

24. Borrower switches to job with a probation

period.

25. Borrower switches from job with salary to

100% commission income.

26. Borrower/coborrower/seller dies.

27. Buyer is too picky about property in price

range they can afford.

28. Buyer has a foreclosure on their record.

29. Veterans DD214 form not available.

30. Buyer comes up short of money at closing.

31. Buyer does not properly “paper trail” addi-

tional money that comes from gifts, loans,

or money not “seasoned” in bank account

32. Buyer does not bring cashier’s check to title

company for closing costs and down

payment.

THE SELLER 33. Loses motivation to sell (job transfer does

not go through, reconciles marriage, etc.).

34. Cannot find a suitable replacement

property.

35. Will not allow appraiser inside home.

36. Will not allow inspectors inside home in a

timely manner.

37. Removes property from the premises the

buyer believed was included.

38. Cannot clear up liens – is short on cash to

close.

39. Did not own 100% of property as previously

disclosed.

40. Encounters problems getting partners’

signatures.

41. Leaves town without giving anyone Power

of Attorney.

42. Delays the projected move-out date.

43. Did not complete the repairs agreed to in

contract.

44. Seller’s home goes into foreclosure during

escrow.

45. Misrepresents information about home and

neighborhood.

46. Does not disclose all hidden or unknown

defects and they are subsequently

discovered.

THE REALTOR(S) 47. Has no client control over buyers or sellers.

48. Delays access to property for inspection

and appraisals.

49. Does not get completed paperwork to the

Lender in time.

50. Inexperienced in this type of property

transaction.

51. Takes unexpected time off during

transaction and can’t be reached.

52. Misleads other parties to the transaction –

has huge ego.

53. Does not do sufficient homework on their

clients or the property and wastes every-

one’s time.

THE LENDER(S) 54. Does not properly prequalify the borrower.

55. Wants property repaired prior to closing.

56. The market raises rates, points or costs.

57. Borrower does not qualify because of a late

addition of information.

58. Lender requires a last minute second

appraisal or other documents.

59. Lender loses a form or misplaces entire file.

60. Lender doesn’t simultaneously ask for all

needed information.

61. Lender doesn’t fund loan in time for close.

THE PROPERTY 62. County will not approve septic system or

well.

63. Termite report reveals substantial damage

and seller is not willing to fix.

64. Home was misrepresented as to size and

condition.

65. Home is destroyed prior to closing.

66. Home is not structurally sound.

67. Home is uninsurable for homeowner’s

insurance.

68. Property incorrectly zoned.

69. Portion of home sits on neighbor's property.

70. Unique home and comparable properties

for appraisal difficult to find.

THE ESCROW/TITLE COMPANY 71. Fails to notify lender/agents of unsigned or

unreturned documents.

72. Fails to obtain information from

beneficiaries, lien holders, insurance

companies or Lenders in a timely manner.

73. Lets principals leave town without getting

all necessary signatures.

74. Loses or incorrectly prepares paperwork.

75. Does not pass on valuable information

quickly enough.

76. Does not coordinate well, so that many

items can be done simultaneously.

77. Does not bend the rules on small problems.

78. Finds liens or other title problems at the last

minute.

THE APPRAISER 79. Is not local and misunderstands the market.

80. Is too busy to complete the appraisal on

schedule.

81. No comparable sales are available.

82. Is not on the Lender’s “approved list.”

83. Makes important mistakes on appraisal and

brings in value too low.

84. Lender requires a second or “review”

appraisal.

INSPECTORS 85. Pest inspector not available when needed.

86. Pest inspector too picky about condition of

property.

87. Home inspector not available when

needed.

88. Inspection reports alarm buyer and sale is

cancelled.

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ABSTRACT

SOPHISTICATED

PROFESSIONAL

DYNAMIC

CREATIVE MODERN

Quality of Life

Principal

Accumulation

The Real Cost

of Renting (At $1,400 per month,

with a 6% rental

increase per year, you

will pay $225,916 over a

10 year period.)

Deferred Gain and Capital

Gain Treatment

Appreciation

Potential

Tax

Deductibility

of Mortgage

Interest &

Property

Taxes

Reasons To Buy A HomeReasons To Buy A Home

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BUYER AGENCY (Single Agency) Agent will represent the best interests of the buyer.

Agent will owe the buyer fiduciary duties.

Agent must give the buyer all material facts so that the buyer can make an educated decision.

SELLER AGENCY (Single Agency) Agent will represent the best interests of the seller.

Agent will owe the seller fiduciary duties.

Agent must give the seller all material facts so that the seller can make an educated decision.

TRANSACTION BROKER (Dual Agency) Represented by the same office or agent Agent represents both the buyer and the seller equally.

Agent’s objective is to get a mutually satisfactory agreement among all parties.

Agent gives all options to the buyer and the seller.

Depending on the local market, all parties may be present at contract presentation to negotiate on their own behalf.

All parties have confidentiality. Agent may do nothing to the detriment of either the buyer or the seller.

Both the buyer and the seller have a right to counsel. Before making any decisions, both parties have the right to seek family, religious, legal, or financial counsel.

Buyer

Buyer

Buyer

Seller

Seller

Seller

Understanding Agency… Understanding Agency… Who Works For Whom?Who Works For Whom? In all relationships, your Agent has a duty to act honestly with both the buyer and the seller.

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YOUR INTERESTS ARE PROFESSIONALLY REPRESENTED

Enlisting the services of a professional Buyer’s Agent is similar to using an accountant to help you with your taxes, a doctor to help you with your health care, or a mechanic to help you with your car. If you had the time to devote to learning everything about accounting, medicine, and automotive mechanics, you could do these services yourself. But who has the time? This is why you allow other professionals to help you in their specific areas of expertise.

We will take care of the hassles of everyday real estate transactions for you. We let you concentrate on your full-time job, while we do our job. We will guide you through the home buying process and exclusively represent your interests as we help you find a home, present your contract offer, negotiate, and close on your home!

YOU GET A PERSONAL SPECIALIST WHO KNOWS YOUR NEEDS Just as your accountant, doctor, and mechanic understand your specific needs, your Buyer’s Agent gets to know your real estate needs and concerns. This type of relationship is built through open communication at all times. Your Buyer’s Agent will save you a lot of time by providing you with details about any home before you see it. In addition, your Buyer’s Agent will listen to your feedback and concerns about each home.

YOU WILL QUICKLY AND CONVENIENTLY GET A GREAT HOME The advantage to signing a Buyer’s Agency Agreement with us is that you will have a professional agent working to find and secure the ideal home for you. It is nearly impossible to find a home that meets your needs, get a contract negotiated, and close the transaction without an experienced agent. You won’t need to spend endless evenings and weekends driving around looking for homes or trying to search computer networks by yourself. When you tour homes with your professional Buyer’s Agent, you will already know that the homes meet your criteria and are within your price range.

WHAT IS THE BUYER’S AGENCY AGREEMENT Entering into a Buyer’s Agency Agreement has countless advantages. When you sign the agreement, you are simply agreeing to “hire” a personal representative who, by law, must represent your best interests to the best of his/her ability. All of this personal service is available at absolutely NO COST TO YOU! The Listing Agent (represents the Seller) is responsible for paying your Buyer’s Agent fee. With us, you get a professional agent devoted to protecting your needs and to helping you make one of the most important investment decisions of your life—and you don’t even have to pay the fee!

The Advantages Of AThe Advantages Of A Buyer Agency AgreementBuyer Agency Agreement

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“If you don’t know where you’re going...you’ll probably end up somewhere else.”“If you don’t know where you’re going...you’ll probably end up somewhere else.”“If you don’t know where you’re going...you’ll probably end up somewhere else.”

If you plan to buy a home soon, you will need to know “where you are going”. For a most

enjoyable home-buying experience, first build a road map to your new home, a list of priorities

that will lead you to your objective – a new home!

Step 1

The first priority is time frame. Write down the date by which you would like to move in to your

new home: ________________ .

Keep in mind that it may take 30-90 days (or more) to locate the right home, secure financing,

and complete the home-buying process.

Step 2

The next priority is to develop a detailed description of the home you hope to find. The following

page contains a Home Search Criteria form to help you distinguish between “Need to Have”

features and “Nice to have” features. Be specific. Include architectural style, number of

bedrooms and baths, location, lot size, and other special requirements. Number your

preferences in order of greatest importance to you.

Step 3

If you are planning to work with a Realtor® to find your new home, now would be the time to set

up an initial consultation. This form, along with the information you share during your initial

consultation, will enable them to narrow the home search.

During the home search, your Buyer Specialist will…

Discuss the benefits and drawbacks of each home in relation to your specific needs.

Keep you informed on a regular basis.

Check the MLS database and with other brokers regularly for new listings.

Prepare a list of all homes that best meet your needs and wants.

Update you on changing financial conditions that may affect the housing market.

Be available to answer your questions or offer assistance regarding your home purchase.

Discuss market trends and values relative to the properties that may interest you.

The Road Map To The Road Map To Your New Home!Your New Home!

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CURRENT HOME INFORMATION

Single Family Home

Home Search CriteriaHome Search Criteria

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What it means to you as a prospective home buyer

The subject of credit scoring has become an increasingly hot topic, and for good reason. For many years,

the general public only associated the concept of credit scoring with the need to purchase high-ticket

items such as a new car or a home. Today, credit scoring goes much further. Your credit score can affect

your ability to get a good rate on commodities such as car insurance, cell phones, or even determine

whether or not you get the job that you want. Indeed, the financial snapshot provided by the credit score

has also become a gauge for many employers, especially those who seek to place employees in a posi-

tion of financial responsibility.

Why Your Credit Score Is So Important

The credit scoring model seeks to quantify the likelihood of a consumer to pay off debt without being

more than 90 days late at any time in the future. Credit scores can range between a low score of 350 and

a high score of 850. The higher the score, the better it is for the consumer, because a high credit score

translates into a low interest rate. This can save literally thousands of dollars in financing fees over the life

of the loan.

Only one out of 1,300 people in the United States have a credit score above 800. These are people with a

stellar credit rating that get the best interest rates. On the other hand, one out of every eight

prospective home buyers is faced with the possibility that they may not qualify for the home loan they

want because they have a score falling between 500 and 600.

The Five Factors Of Credit Scoring

Credit scores are comprised of five factors. Points are awarded for each component, and a high score is

most favorable. The factors are listed below in order of importance.

1. PAYMENT HISTORY - 35% IMPACT

Paying debt on time and in full has the greatest

positive impact on your credit score. Late payments,

judgments and charge-offs all have a negative

impact. Missing a high payment will have a more

severe impact than missing a low payment, and

delinquencies that have occurred in the last two

years carry more weight than older items.

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Your Credit ScoreYour Credit Score

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Your Credit ScoreYour Credit Score What it means to you as a prospective home buyer

1. OUTSTANDING CREDIT BALANCES -30% IMPACT

This factor marks the ratio between the outstanding balance and available credit. Ideally, the

consumer should make an effort to keep balances as close to zero as possible, and definitely below

30% of the available credit limit when trying to purchase a home.

2. CREDIT HISTORY - 15% IMPACT

This portion of the credit score indicates the length of time since a particular credit line was

established. A seasoned borrower will always be stronger in this area.

3. TYPE OF CREDIT - 10% IMPACT

A mix of auto loans, credit cards and mortgages is more positive than a concentration of debt from

credit cards only.

4. INQUIRIES - 10% IMPACT

This percentage of the credit score quantifies the number of inquiries made on a consumer's credit

within a six-month period. Each hard inquiry can cost from two to 25 points on a credit score, but the

maximum number of inquiries that will reduce the score is ten. In other words, 11 or more inquiries

within a six-month period will have no further impact on the borrower's credit score. Note that if you

run a credit report on yourself, it will have no affect on your score.

How Does a Low Credit Score Affect My Interest Rate

Lenders estimate your ability to pay back money based on your credit score. The risk factor they take on is built

-in to your interest rate as a financing fee. Therefore, a low credit score results in a higher interest rate,

higher monthly fees, and a higher amount of interest being paid over the total life of the loan.

A borrower with a credit score of 620 would be questionable to

an underwriter. While the lender may agree to provide financing,

the increased interest rate is factored into the monthly payment.

The following chart illustrates the difference in the amount of

interest paid over the life of the same loan with three different

credit score scenarios.

A borrower who increases his or her credit score from 620 to

720+ can potentially save $601 per month on mortgage

payments, $7,214 per year, and approximately $216,432 over the

life of the 30-year loan.

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How Does The Underwriter View My Score If you are considering a home purchase, it is in your best interest to make every effort to increase your

credit score, especially if you know you have issues you should be dealing with. It is often the case that

people are not aware of bad marks on their credit record until they apply for financing for a major purchase.

As part of the loan process, your lender will run a credit report. You can take advantage of the opportunity to

get a free credit report from each of the three main CRAs: Equifax, Experian and TransUnion. As a sidebar,

you can choose to get the free report from all three bureaus at the same time, so you are aware of what

information each bureau has collected. Another option is to pull your credit report from one agency, and

reserve the right to get your free reports from the other two as you work on improving your credit standing.

We believe it is best to have the full overview up front. Different CRAs have different methods of calcu-

lating these scores, and may also have different information contained within their findings. Consider the

adage, "Why jump over nickels to pick up pennies?" If additional reports are needed within a 12-month pe-

riod from any of the three CRAs, the cost is extremely minimal compared to the potential savings that can

be realized by an improved credit score, and if you run a credit report on yourself, it will not affect your own

score as an inquiry.

The underwriter who is making the decision as to whether or not you should get the loan you are asking for

will generally look at the scores generated from all three CRAs. Typically, the score will not be the same

from all three reports, and the underwriter will consider the middle score as a barometer.

What If I Have No Credit A borrower will sometimes not have enough credit references to obtain the loan they wish to secure. In this

case, start by opening small lines of credit that report to one of the three major CRAs, and make purchases

that can be paid off easily.

If you do not already have a checking or savings account, open one. Your bank or credit union may be able

to provide you with a credit card account once you have established a history with them as a customer.

Ask your family or spouse to add you to their credit card

account. By adding your name to an established line of credit,

you can ride on their coattails, so to speak, and gain points by

using that person's credit history.

It is also wise to start saving money for the down payment on

your home. The lender will look at your application more

favorably when you are able to come to the table with a 20%

down payment. Bear in mind, there are certain loan pro

grams available that permit a percentage of gift money for

down payment, which can come from a relative, or even the

person selling the home.

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Your Credit ScoreYour Credit Score What it means to you as a prospective home buyer

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The principal on the loan (P)

The interest on the loan (I)

Property taxes (T)

The homeowner’s insurance (I)

HOA (if applicable)

Mortgage Insurance (if applicable)

Pre-qualifying will help you in the following ways: 1. After your offer is accepted you will know in advance exactly what your payments will be on offers

you choose to make.

2. You won’t waste time considering homes you cannot afford.

Pre-approval will help you in the following ways: 1. A seller may choose to make concessions if they know that your financing is secured. You are like a

cash buyer, and this may make your offer more competitive.

2. You can select the best loan package without being under pressure.

How Much Home Can You Afford? There are three key factors to consider:

1. Down payment 2. Ability to qualify for a mortgage 3. Closing costs

Down Payment Requirements:

Most loans today require a minimum down payment of between 3.5% and 5% depending on the type and

terms of the loan. If you’re able to come up with a 20-25% down payment, you may be eligible to take

advantage of special fast-track programs and possibly eliminate mortgage insurance (MI). *Qualified

Veterans may be able to purchase without a down payment and Mortgage Insurance. **When you make

a down payment of 5% or more on a conventional loan, you can opt to buy out the monthly mortgage

insurance with a one time fee. ***On FHA Loans, there is always MI.

Closing Costs:

You will be required to pay fees for loan processing and other closing costs. These fees must be paid in

full at the final settlement, unless you are able to include them in your financing.

Typically, total closing costs will range between 2-3% of your mortgage loan.

Qualifying For The Mortgage:

Most lenders require that your monthly payment range between 35-50% of your gross monthly income.

Your mortgage payment to the lender includes the following items:

Your total monthly PITI and all debts (from installments to revolving charge accounts) should range

between 33-60% of your gross monthly income. These key factors determine your ability to secure a

home loan: Credit Report, Assets, Income, and Property Value.

PrePre--Qualification AndQualification And PrePre--ApprovalApproval Many buyers apply for a loan and obtain approval before they find the home they want to buy….Why?

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Interest Rate %

15 Year Term 30 Year Term

Monthly Payment Total Amount Monthly Payment Total Amount

4.00% 7.39 1331.43 4.77 1718.69

4.125% 7.45 1342.74 4.84 1744.73

4.25% 7.52 1354.10 4.91 1770.90

4.375% 7.58 1365.51 4.99 1797.42

4.50% 7.64 1376.98 5.06 1824.06

4.625% 7.71 1388.51 5.14 1850.90

4.75% 7.77 1400.09 5.21 1877.93

4.875% 7.84 1411.73 5.29 1905.14

5.00% 7.90 1423.42 5.36 1932.55

5.125% 7.97 1435.17 5.44 1960.15

5.25% 8.03 1446.97 5.52 1987.93

5.375% 8.10 1458.83 5.59 1015.89

5.50% 8.18 1470.75 5.68 2044.04

5.625% 8.24 1482.72 5.76 2074.36

5.75% 8.31 1494.73 5.84 2100.86

5.875% 8.37 1506.81 5.92 2129.54

6.00% 8.44 1518.94 6.00 2158.38

6.125% 8.51 1531.13 6.08 2187.40

6.25% 8.58 1543.36 6.16 2216.58

6.375% 8.64 1555.65 6.24 2245.93

6.50% 8.72 1567.99 6.33 2275.44

6.625% 8.78 1580.39 6.40 2305.12

6.75% 8.85 1592.83 6.49 2334.95

6.875% 8.92 1605.34 6.57 2364.94

7.00% 8.99 1617.89 6.65 2395.09

7.125% 9.06 1630.49 6.74 2425.39

7.25% 9.13 1643.15 6.82 2455.83

7.375% 9.20 1655.86 6.91 2486.43

7.50% 9.27 1668.62 6.99 2517.17

7.625% 9.34 1681.43 7.08 2548.06

7.75% 9.41 1694.29 7.16 2579.08

7.875% 9.48 1707.20 7.25 2610.25

How Much Can You AffordHow Much Can You Afford Use this table to estimate your monthly principal interest payments for any fixed interest rate mortgage. *You can't rely on this chart to calculate the monthly payment for an ARM, except for the initial period.

Each of the term columns shows the monthly payment (Principal + Interest), and the total amount you will pay back for each $1,000 of the loan. Scan down the interest rate column to a given interest rate then follow across to the payment factor for either a 15 or 30 year term. Multiply the factor shown by the number of thousands in your mortgage amount, and the result is your monthly principal and interest payment. We have used $360,000. In our example, with a loan of $360,000, for 30 years, multiply 6.65 X 100 = $665 per month.

21

This is an overview designed to help you be prepared to submit

your loan application

Copy of all W2’s and or 1099’s for the past 2 years

Copy of all pages and schedules of Federal Tax Returns

for the past 2 years

1 month of your most current paystubs

Copy of last 2 months personal checking/savings ac-

count statements, all pages even if they’re blank.

Statements must include name, address and account

number. If printed from the internet, select the

“Printable statement” option. Internet print screens of

activity only do not suffice. Be prepared to review doc-

uments and explain any deposits that are not payroll

or transfers between accounts.

Copy of most recent 401k, IRA and investments– all

pages

YOU WILL WANT TO BE READY TO PROVIDE ALL OF THE ITEMS BELOW:

Loan ApplicationLoan Application ChecklistChecklist

22

Credit, income and asset situation is critical to maintain during the loan process. Here are

some “do’s and don'ts” to follow once you have decided to buy a home. Our goal is YOUR

successful closing!

Do...stay current on all existing credit accounts—

make those payments ON TIME!

Do...continue using existing credit as normal—but

without large purchases

Do...provide all documents requested up front and

keep all original paystubs, bank statements, tax

returns and other financial documentation handy

as you receive it. You may be required to update

your loan file during the process

Do...notify us if you are planning on receiving any

gift funds for the down payment or closing costs

Do...notify us if you have financial expenditures

coming up during our loan process that will lower

your assets

Do...notify us if you have any upcoming

employment changes, raises, promotions, change

in pay structure, etc.

Do...respond promptly to all requests to provide

documentation, sign documents, answer questions

Do...notify us if you are going on vacation at any

time during the process

Do...be flexible and make yourself available for

your home inspection and your closing

appointment.

Don’t...apply for any new credit, open any new

credit accounts or close any current ones

Don’t...make any large purchases on your credit

accounts or increase your spending on current

credit accounts—business as usual when it comes

to credit

Don’t...co-sign for anyone else for a home or car

loan or any other type of debt

Don’t...dispute any credit accounts on your credit

report before or during the loan process—disputed

accounts can alter your credit score

Don’t...pay off any collections or charge-off’s on

your credit report unless advised by a credit

professional or your mortgage consultant—

activating these accounts by taking action may alter

your credit score.

Don’t...make any type of employment or

compensation changes without notification to your

mortgage consultant

Don’t...close any current bank accounts, open new

bank accounts, or move money around between

accounts

Don’t...deposit cash to your bank account without

contacting your mortgage consultant to discuss the

requirements of documentation and whether or

not it will be accepted as funds for closing.

DO’s & DONT’s DuringDO’s & DONT’s During The Loan ProcessThe Loan Process

23

There are many factors

to consider when selecting

a neighborhood that is

right for you!

Below are just a few of the many factors -- You may think of others that are important

to you. Please write them on your Home Search Criteria form so they do not get

forgotten.

Neighborhoods have characteristic personalities designed to best suit single people,

growing families, two-career couples, or retirees. Investigate to determine if the

neighborhood matches your lifestyle and personality.

Scout Out The Neighborhood!

It is important that you scout the neighborhood in person. You live in more than just

the house.

Talk to people who live there.

Drive through the entire area at different times of the day, during the week and on

weekends.

Look carefully at how well other homes in the area are being maintained; are they

painted, are the yards well cared for; are parked cars in good condition, etc.

The NeighborhoodThe Neighborhood

24

Look for things like access to major thoroughfares, highways, and shopping.

Listen for noise created by commerce, roads, railways, public areas, schools, etc.

Smell the air for adjacent commerce or agriculture.

Check with local civic, police, fire, and school officials to find information about the area.

Research things like soil and water.

Look at traffic patterns around the area during different times of the day and drive from

the area to work.

Is the neighborhood near parks, churches, recreation centers, shopping, theaters,

restaurants, public transportation, schools, etc.?

Does the neighborhood belong to a Homeowner’s Association?

Neighborhood FactorsNeighborhood Factors To ConsiderTo Consider

25

This worksheet is designed for you to print and take with you when viewing property

ADDRESS: _______________________________________________________

Property Comments Exterior Comments

View Foundation

Lot Size Roof

Landscaping Architectural Style

Square Footage Deck/Patio

Interior Comments Swimming Pool

Number of Bedrooms

Garage

Number of Bathrooms

General Exterior

Condition

Living Room Location Comments

Kitchen Convenience to Work

Dining Room Convenience to Shopping

Family Room Convenience to Schools

Study Convenience to Day Care

Fireplace(s) Nearby Recreational

Facilities

Openness of Home General Appearance

Of Houses in the Area

General Interior

Condition

House Value Relative

To the Area

Additional Comments

The Home TourThe Home Tour

26

The ContractThe Contract--ToTo--CloseClose Flow ChartFlow Chart

27

When You Found The One!

Once you have found the home you wish to purchase, you will need to determine what offer

you are willing to make for the home. It is important to remember that the more competi-

tion there is for the home, the higher the offer should be – sometimes even exceeding the

asking price. Remember, Be Realistic. Make offers you want the other party to sign!

Presenting A Written Offer

To communicate your interest in purchasing a home, we will present the listing agent with a

written offer. When the seller accepts an offer, it becomes a legal contract. When you write

an offer, you should be prepared to pay an earnest money deposit. This is to guarantee that

your intention is to purchase the property.

After we present your offer to the listing agent, it will either be accepted, rejected, or the

seller will make a counter offer. This is when we will negotiate terms of the contract, if nec-

essary.

The Purchase Agreement

The step-by-step contract procedure for most single-family home purchases is standard. The

purchase agreement used is a standard document approved by our local Board of Realtors®.

The purchase agreement or contract constitutes your offer to buy and, once accepted by the

seller, becomes a valid, legal contract. For this reason, it is important to understand what is

written on the contract offer.

Making An OfferMaking An Offer

28

You have decided to buy your home, but what happens between now and the

time you legally own the home?

A Title Company may handle the following items. NOTE: in different parts of the country, attorneys, lenders, escrow companies and other persons who are independent of title companies perform some or all of these functions.

Earnest Money An agreement to convey starts the process as soon as the last signature is completed. Once you submit the loan application, it is subject to a credit check, an appraisal, and sometimes, a survey of the property.

Tax Check The Title Company contacts the various assessor-collectors to find out what taxes are owed.

Title Search Copies of documents are gathered from various public records: deeds, deeds of trust, various assessments and matters of probate, heirship, divorce, and bankruptcy are addressed.

Examination Verification of the legal owner and debts owed.

Document Preparation Appropriate forms are prepared for conveyance and settlement.

Settlement/Closing An Escrow Officer oversees the closing of the transaction: seller signs the deed, you sign a new mortgage, the old loan is paid off and the new loan is established. Sellers, Realtors, attorneys, surveyors, Title Company, and other service providers for the parties are paid. Title insurance policies will then be issued to you and your lender.

Title Insurance There are two types of title insurance:

Lender Policy: Coverage that protects the lender for the amount of the mortgage, Owners Policy: Coverage that protects your equity in the property.

Both you and your lender will want the security offered by title insurance. Why? Title agents search public records to determine who has owned any piece of the property, and these records may reflect irregularities that are almost impossible to find. Here are some examples: an unauthorized seller forges the deed to the property; an unknown, but rightful heir to the property shows up after the sale to claim ownership; conflicts arise over a will from a deceased owner; or a land survey showing the boundaries of your property is incorrect. For a one-time charge at closing, title insurance will safeguard you against prob-lems including those events an exhaustive search will not reveal.

Behind The Scenes:Behind The Scenes: What HappensWhat Happens

29

SAM

PLE Property Address: 1234 Dream Home Lane, Westlake Village, CA 91362

Sales Price: $270,000 Acceptance Date: January 1, 2012 Initial Deposit ( $8,100 ) Due: January 3, 2012 Loan Contingency Due: January 3, 2012 Appraisal Contingency Due: January 3, 2012 Buyer Investigations Contingency Due: January 3, 2012 Reports/Disclosures Contingency Due: January 3, 2012 ALL Contingencies Removed: January 3, 2012 Estimated COE: February 6, 2012

Inspections Termite Inspection: Company Termites-R-Us Inc. Phone 555-5555 Date 11/1/11 Property Inspection: Company Inspection s 101 Phone 555-5555 Date 12/9/12 HOA Information: Company Conejo LLC Phone 555-5555 Home Warranty: Company Home Protects Phone 555-5555

Selling Agent(s) Selling Agent Transaction Coordinator Company Other Realty Name Sarah Smiles Agent(s) Gary Giver Phone 818-555-5555 Address 300N. Agoura Road #300 Fax 818-555-5555 Westlake Village, CA 91362 Email trans@otherrealty.com Phone 818-555-5555 Fax 818-555-5555 Email ah@otherrealty.com

Buying Agent(s) Buying Agent Transaction Coordinator Company Keller Williams Name Sammy Sunshine Agent(s) Keri Kindness Phone 818-555-5555 Address 340N. Westlake Blvd. #100 Fax 818-555-5555 Westlake Village, CA 91362 Email info@teamradke.com Phone 818-555-5555 Fax 818-555-5555 Email info@teamradke.com

Escrow Information Title Information Loan Information Company A+ Escrow Company No 1 Title Company EZ Loans Agent Wendy Wise Agent Claudia Clarity Agent Penny Possible Esc # 1111-WV Order # 222222 Address9101ABC Ln. Address 1234 ABC Ln. Address5678 ABC Ln. Fax 818-555-5555 . Phone 818-555-5555 Phone 818-555-5555 Email pp@loans.com . Email ww@escrow.com Email cc@title.com

Timeline &Timeline & Transaction InformationTransaction Information

30

New Home Warranties — When you purchase a newly built home, the builder usually offers some sort of full or limited warranty on things such as the quality of design, materials, and workmanship. These warranties are usually for a period of one-year from the purchase of the home. At closing, the builder will assign to you the manufacturer’s warranties that were provided to the builder for materials, appliances, fixtures, etc. For example, if your dishwasher were to become faulty within one year from the purchase of your newly built home, you would call the manufacturer of the dishwasher – not the builder. If the homebuilder does not offer a warranty, BE SURE TO ASK WHY!

Resale Home Protection Plan — When you purchase a resale home, you can purchase Home Protection Plan (HPP) that will protect you against most ordinary flaws and breakdowns for at least the first year of occupancy. The HPP may be offered by either the Seller or negotiated as part of the offer. Even with a HPP, you should have the home carefully inspected before you purchase it. A Home Protection Plan will give you peace of mind, knowing that the major covered components in your home will be repaired if necessary. Ask us for more details about HPP programs.

HOME PROTECTION PLAN INFORMATION Company Name: Contact:

Address: Phone Number:

Fax:

Policy Number: Policy Value:

Coverage: Duration:

Home Warranty Home Warranty ProtectionProtection

31

Hi Ashley and Sandy, Just as a reminder, as per your contract, the Seller shall pay the cost, not to ex-ceed $500, for a one-year home warranty plan of your choice with the following optional coverage: air conditioner, pool/spa, code and permit upgrade. The following is a list of company websites that offer a Home Warranty Plan for your review. I have also attached a Home Warranty Clarification sheet comparing these three plans as a convenient reference. Please note, however, that you may choose whatever company you would like and that these companies are the ones we are most familiar with. HISCO Home Warranty: www.hiscohw.com First American Home Buyers Protection: www.homewarranty.firstam.com Old Republic Home Protectors: www.orhp.com/ Once you have made a decision, just let me know and I will order the warranty through escrow. Thanks so very much! Jennifer McMichael, Transaction Coordinator

Home Protection PlanHome Protection Plan

32

This is a major investment! It is highly recommended you look to

the professionals to insure it is a good one.

If you are purchasing a resale property, it is highly recommended you have a

professional home inspector conduct a thorough visual inspection. The inspection

may include the following:

Appliances

Plumbing

Electrical

Air conditioning and heating

Ventilation

Roof and Attic

Foundation

General Structure

The inspection is not designed to criticize every minor problem or defect in the home.

It is intended to report on major damage or serious problems that require repair.

Should serious problems be indicated, the inspector will recommend that a structural

engineer or some other professional inspect it as well.

Your home cannot “pass or fail” an inspection, and your inspector will not tell you

whether he/she thinks the home is worth the money you are offering. The inspector’s

job is to make you aware of repairs that are recommended or necessary.

The seller is not required to but may be willing to negotiate completion of repairs or a

credit for completion of repairs, or you may decide that the home will take too much

work and money. A professional inspection will help you make a clear-headed

decision. In addition to the overall inspection, you may wish to have separate tests

conducted for wood destroying organisms, i.e. termites or the presence of radon gas.

In choosing a home inspector, consider one that has been certified as a qualified and

experienced member by a trade association.

Home InspectionHome Inspection

33

Hi Victor & Elizabeth, First of all, congratulations on the listing and now offer on your property! I am handling all listing procedures and marketing of your property.

Attached please find the list of the wood destroying pest companies. We would like you to schedule the termite inspection as soon as possible. Please let me know once you confirm your appointment with the termite company, date and time so that we may put it on her calendar. Please note that you should evaluate the qualifications and experience of these termite inspectors, to your satisfaction, before selecting one, and that our office does not recommend one inspector over another and does not guarantee or warrantee the work performed by any of the inspection companies or individuals on the list. You may select any company you wish, whether the inspector is included on this list or not.

Please let us know if you have any questions. Thanks so very much! Best regards,

Jennifer McMichael Transaction Coordinator

Termite Inspectors

Summit Termite

805-480-3648

Email: summitpest@gmail.com

Steve Magruder

M&M Termite

Phone: 805-526-8585

Email: steve.magruder@mmpestcontrol.com

Nick Grayson

Grayson Termite

805-716-3011

Email: nick@graysontermite.com SAMPLE

SAMPLE

Home InspectionHome Inspection

34

Before Contingency Removal

After Contingency Removal After Closing

Order Physical Inspection

Get Insurance Policy Quote

Schedule Appointment with Movers

Notify Landlord

Transfer Utilities

Order Telephone Service

Make Final Walk Through (About 5 days before clos-

ing)

Order Cable/TV Service

Order New Checks

Submit Change of Address

Make Extra Keys/Change Locks

Change Driver’s License/Credit Cards

Client Contract ChecklistClient Contract Checklist

35

What is a Real Estate “Closing”?

Closing is the date the title is transferred and recorded into the new owners name.

The purchase agreement or contract you signed describes the property, states the

purchase price and terms, sets forth the method of payment, and names the date of

the closing or actual transfer of the property title and when the exchange of keys

will occur.

If financing the property, your lender will require you to sign a document, usually a

promissory note, as evidence that you are personally responsible for repaying the

loan. You will also sign a mortgage or deed of trust on the property as security to

the lender for the loan. The mortgage or deed of trust gives the lender the right to

sell the property if you fail to make the payments. Before you exchange these

papers, the property may be surveyed, appraised, or inspected, and the ownership

of title will be checked in county and court records.

Prior to closing, you will be required to pay all fees and closing costs in the form of

“guaranteed funds” such as a Cashier’s Check or Wire Transfer. The escrow officer

will notify you of the exact amount when you sign your loan documents.

What is an Escrow Account?

An escrow account is a neutral depository held by your lender for funds that will be

used to pay expenses incurred by the property, such as taxes, assessments, property

insurance, or mortgage insurance premiums which fall due in the future. You will

pay one-twelfth of the annual amount of these bills each month with your regular

mortgage payment. When the bills fall due, the lender pays them from the special

account. At closing, it may be necessary to pay enough into the account to cover

these amounts for several months so that funds will be available to pay the bills as

they fall due.

Real Estate “Closing”Real Estate “Closing”

36

This is an overview to help you understand what Closing Costs include and who charges for them

Lender Fees COST CHARGED BY DESCRIPTION

Appraisal Fee Appraiser Paid directly to Fee Appraiser for appraisal of property

Credit Report Lender Paid to Credit Bureau for report containing 3 repositories– TRW, TU and Equifax

Documentation Preparation Lender Paid to Lender for preparation of final loan documents

Flood Certificate Lender Fee for investigation to determine if the subject property is located in a flood hazard zone.

Insurance Impounds Lender 1 year + 2 months Hazard Insurance collected for impound reserve account.

Origination Fee Lender Charged for lending money at 1% of the loan amount.

Processing Lender Paid to mortgage broker for processing loan package from application to closing.

Tax Impounds Lender Collected to create an impound reserve account for the lender to pay property taxes twice a year.

Tax Service Tax Service Fee charged to buyer to set up property taxes with the state.

Underwriting Lender Fee to direct lender for the process of approving.

Wire Banking Institution Charged for the wiring of funds to title for closing.

COST CHARGED BY DESCRIPTION

Fire Insurance Insurance Agency 1 year prepaid premium for Homeowners Insurance.

HOA Dues HOA Management Paid through month of closing.

HOA Transfer Fee HOA Management To transfer ownership and handle new accounting set-up.

Notary Notary Charged to seller for signing of grant deed or certification of trust. Buyers need notary’s for signing loan documents.

Recording Fee Existing Lender Charged for having reconveyance recorded.

Demand Statement/Forwarding Fee

Existing Lender Charged for issuing a pay-off statement

County Property Taxes Seller to Buyer Calculated from date of pay-off through end of period paid.

HOA Dues Seller to Buyer Calculated from date of COE through month-end

Payoffs & Disbursements

Explanation Of Explanation Of Closing CostsClosing Costs

37

CONGRATULATIONS!

You have closed on your new home and now you are ready to move! The next few

pages contain tips and checklists so that your move is as organized and effortless

as possible. Think about your move as a series of small projects that you can begin

while your home is under contract. Your move will progress as your contract and

closing progress. That way, when the day comes to physically move your

belongings, most of the details will be taken care of.

Keep detailed records – some moving expenses are tax deductible!

Keep detailed records of all moving expenses if your move is job related. Many

expenses, including house-hunting trips, may be tax deductible. If your move is 35

miles or more from your home, you can deduct your family’s travel expenses,

including meals and lodging; the cost of transporting furniture, other household

goods and personal belongings; food and hotel bills for up to 30 days in the new

city if you have to wait to move into your new home; and the costs associated with

selling your old home or leasing your new home. *

Note: There is a ceiling on deductions which is outlined in detail in the IRS’s

Publication 521, “Tax Information on Moving Expenses,” available from the IRS

offices or website.

*Check with a tax professional for specific information

MovingMoving

38

Gather boxes in all sizes from friends, neighbors and

stores

Collect cushioning materials (bubble wrap, old

blankets, newspapers) to use as padding in boxes.

Create a “portable packing kit”. (Marking pens, tape

measure, packing tape, twine, scissors).

Reinforce the bottom of boxes with extra tape for

added strength.

Label each box on all 4 sides with the name of the

room in your house it should be placed.

Number the boxes and keep a list of which box goes

in which room in your new home.

Label boxes containing fragile items with big red

lettering.

Pack your TV, stereo, and computer in their original

boxes whenever possible.

Keep boxes to 50 pounds or less.

Pack heavy items into their own smaller boxes and

place lighter items together in larger boxes.

Don’t move flammable, combustible, corrosive or

explosive items such as paint or gasoline.

Pack a bag of personal items you’ll need during the

move (change of clothes, toiletries, medicine).

PACKING TIPS

Tips to Make Your Move A Little Easier

Packing ChecklistPacking Checklist

39

Kitchen (Cupboards, Closets, Drawers)

Box numbers for Kitchen: _____________________

Dining Room (Cabinets, Light fixture, lamps)

Box numbers for Dining Room: ________________

Living Room (Bookcase, artwork, knickknacks)

Box numbers for Living Room: _________________

Family Room (Entertainment Center & contents)

Box numbers for Family Room: _________________

Master Bedroom (Closets, Dresser, Furniture)

Box numbers for Master Bedroom: ______________

Bedroom #1 (Closets, Dresser, Furniture)

Box numbers for Bedroom #1: __________________

Bedroom #2 (Closets, Dresser, Furniture)

Box numbers for Bedroom #2: __________________

Study/Office (Computer equipment, Files, Desk)

Box numbers for Study/Office:__________________

Bathroom (Cupboards, Linens, Towels, Wall Art)

Box numbers for Bathroom: ____________________

Attic (Trunks, Boxes, Keepsakes)

Box numbers for Attic: _______________________

Garage (Yard Equipment, Garden Tools)

Box numbers for Garage: _____________________

Basement (Cupboard and shelves)

Box numbers for Basement: ___________________

LIST OF ROOMS

Packing List By Room

Packing ChecklistPacking Checklist

40

The keys to your new home

A map of your new town and directions to your new

home

The telephone number of the moving company

Cash or traveler’s checks

Documentation related to the sale of your home

Your insurance policies & agent’s phone number

Your address book and personal organizer

Prescription and non-prescription medicine

Enough clothing to get by if the movers are late

Any items of great personal value to you that are irre-

placeable

Back-up copies of important computer files

Sheets, towels and personal hygiene items for the first

night in your new home.

MOVING DAY (Carry with you)

Moving ChecklistMoving Checklist What to have with you on moving day

41

Have your children write good-bye letters and enclose their new address. You may wish to call the other children’s parents so that they will encourage return letters.

When packing, give your children their own box and let them decorate it.

Start a scrapbook for your new home.

Visit your children’s new school, park, church, etc… Take a camera.

Help your children invite new friends over to your new home.

Let your children choose a new favorite restaurant. This will help them feel in control of their new world.

Encourage them to send letters about their new home to their friends.

Involve your children in groups, sports, and activities like the ones they used to participate in.

Remember, even if you only lived in a home for a few years, to a young child it is nearly their entire lifetime.

Show your children the new home and their new room prior to moving. If this is not possible, pictures or videos will help them visualize where they are going.

Assure children that you won’t forget their friends.

Make a scrapbook of the old home and neighborhood.

Throw a good-bye party. At the party, have their friends sign a t-shirt.

Helping Children CopeHelping Children Cope

42

ELECTRIC COMPANY Company Name: Phone Number

Account Number: Cancellation Date:

Activation Date (New Property): Refundable Deposit:

Make arrangements for transferring or canceling home utilities such as the following. Advise them of your desired date for final reading and give them your new address for final billing. Request deposit return if appropriate, and arrange for immediate service at your new address.

Company Name: Phone Number

Account Number: Cancellation Date:

Activation Date (New Property): Refundable Deposit:

WATER/SEWER

GAS

PHONE/INTERNET

CABLE/TELEVISION

Company Name: Phone Number

Account Number: Cancellation Date:

Activation Date (New Property): Refundable Deposit:

Company Name: Phone Number

Account Number: Cancellation Date:

Activation Date (New Property): Refundable Deposit:

Company Name: Phone Number

Account Number: Cancellation Date:

Activation Date (New Property): Refundable Deposit:

Transferring OrTransferring Or Cancelling UtilitiesCancelling Utilities

43

GlossaryGlossary Acceptance

The date when both parties, seller and buyer, have agreed to

and completed signing and/or initialing the contract.

Adjustable Rate Mortgage

A mortgage that permits the lender to adjust the mortgage’s

interest rate periodically on the basis of changes in a specified

index. Interest rates may move up or down, as market

conditions change.

Amortized Loan

A loan, which is paid in equal installments during its term.

A.P.R. (Annual Percentage Rate):

A term used in the Truth in Lending Act. It represents the

relationship of the total finance charge (interest, discount

points, origination fees, loan broker, commission, etc.) to the

amount of the loan.

Appraisal

An estimate of real estate value, usually issued to standards of

FHA, VA, and FNMA. Recent comparable sales in the neighbor-

hood is the most important factor in determining value. This

should be contrasted against the home inspection.

Appreciation

An increase in the value of a property due to changes in market

conditions or other causes. The opposite of depreciation.

Assumable Mortgage

Purchaser takes ownership to real estate encumbered by an

existing mortgage and assumes responsibility as the guarantor

for the unpaid balance of the mortgage.

Bill of Sale

Document used to transfer title (ownership) of PERSONAL

Property.

Buy Down

A fixed rate loan where the interest rate and payment are

reduced for a specific period of time by paying the interest up

front to subsidize the lower payment.

Cal-Vet Loans

Real estate loans available to Armed Forces Veterans from

California, at low interest rates.

Chain of Title

The chronological order of conveyances of a parcel of land, from

the original owner to the present owner.

Closing

In real estate sales, the final procedure in which documents are

executed and/or recorded, and the sale (or loan) is completed.

Closing Costs

Expenses incidental to a sale of real estate, such as loan fees,

appraisal fees, etc.

Closing Statement (HUD1)

The statement which lists the financial settlement between

buyer and seller, and the costs of each must pay.

Cloud on Title

An individual encumbrance on real property, which, if valid,

would affect the rights of the owner. For example: (A) sells lot 1,

tract 1, to (B). The deed is mistakenly drawn to read Lot 2, tract

1. A cloud is created on lot 2 by the recording of the erroneous

deed. The cloud may be removed by quitclaim deed, or if

necessary, by court action.

Community Home Buyers’ Program

A fixed rate loan with a very low down payment, and easier

qualifying ratios. Subject to borrower meeting income limits and

attendance of a 4 hour training course on home ownership.

Comparable Sales

Sales that have similar characteristics as the subject property

and are used for analysis in the appraisal process.

Consideration

Anything which is, legally, of value, and induces one to enter into

a contract.

Contract

An agreement to do or not to do a certain thing.

Conventional Mortgage

A mortgage or Deed of Trust not obtained under a government

insured program such as Jumbo, FHA or VA.

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GlossaryGlossary Conveyance

Transfer of title to land. Includes most instruments by which an

interest in real estate is created, mortgaged or assigned.

Covenants, Conditions, and Restrictions (CC&Rs)

A term used in some areas to describe the restrictive limitations

which may be placed on property.

Deed

Generally, am instrument given to pass fee title or easement to

property that has to be recorded with the County Recorder.

Deed of Trust

An Instrument used in many states in place of a mortgage.

Property is transferred to a trustee by the borrower (trustor), in

favor of the lender (beneficiary), and reconveyed upon payment

in full.

Deposit

Money given by the buyer with an offer to purchase. Shows

good faith. Also called earnest money.

Discount Points

A negotiable fee paid to the lender to secure financing for the

buyer. Discount points are up front charges to reduce the inter-

est rate on the loan over the life or a portion of the loan’s term.

One discount point equals one percent on the loan amount.

Disposable Income

Monthly income left over after fixed obligations and living

expenses are paid for that period.

Documentary Transfer Tax

A state tax on the sale of real property , based on the sale price.

Down Payment

Cash portion of the purchase price paid by the buyer from his/

her own funds.

Easement

The right to use the land of another.

Encumbrance

A claim, lien, charge, or liability attached to and binding real

property. Any right to, or interest in, land which may exist in one

other than the owner, but which will not prevent the transfer of

fee title.

Equity

The market value of real property, less the amount of existing

liens. It is obtained by subtracting the total liens from the value.

Escrow Payment

That portion of a mortgagor’s monthly payment held in trust by

the lender to pay for taxes, hazard insurance, mortgage insur-

ance, lease payments and other items as they become due.

Execute

To put into effect: carry out. To make valid, as by signing a deed.

Fair Credit Reporting Act

A federal law giving one the right to see his/her credit report so

that errors may be corrected. A lender refusing credit based on a

credit report must inform the buyer which company issued the

report. The buyer may see the report without charge if refused

credit.

Federal Home Loan Banks

A system of 11 regional banks established by the Home Loan

Bank Act of 1932 in order to keep a permanent supply on money

available for home financing.

Fee Simple

An estate under which the owner is entitled to unrestricted

powers to dispose of the property, and which can be left by will

or inherited. Commonly, a synonym for ownership.

F.H.A. (Federal Housing Administration)

A Federal Agency which insures first mortgages, enabling lenders

to loan a very high percentage of the sale price.

FHA Insured Mortgage

A mortgage under which the Federal Housing Administration

insures loans made, according to its regulations.

FHLMC (Freddie Mac)

Federal Home Loan Mortgage Corporation. A Federal Agency

purchasing first mortgages, both conventional and federal in-

sured, from members of the Federal Reserve System and the

Federal Home Loan Bank System.

45

GlossaryGlossary First Mortgage

A mortgage having priority over all other voluntary liens against

the property it is liening on.

Fixed Rate Mortgage

A mortgage having a rate of interest which remains the same

for the life of the mortgage.

Flood Insurance

Insurance indemnifying banks against loss by flood damage.

Required by lenders (usually banks) in areas designated

(federally) as potential flood areas. The insurance is private but

federally subsidized.

FNMA (Fannie Mae)

Federal National Mortgage Association. A private corporation

dealing in the purchase of first mortgages, at discounts.

Foreclosure

Procedure whereby property pledges as security for a debt is

sold to pay the debt in the event of default.

GNMA (Ginnie Mae)

Government National Mortgage Association. A Federal

Association, working with F.H.A., which offers special assistance

in obtaining mortgages/purchases mortgages in a secondary

capacity.

Good Faith

Having good intentions, such as buyer putting a deposit for a

house when a lender discloses all information/costs to the loan.

Graduated Payment Mortgage

Any loan where the borrower pays a portion of the interest due

each month during the first few years of the loan. The payment

increases gradually during the first few years to the amount

necessary to fully amortize the loan during its life.

Grant Deed

One of the many types of deeds used to transfer real property.

Grantee—one to whom a grant is made, generally the buyer.

Grantor—one who grants property or property rights.

Hazard Insurance

Real Estate insurance protecting against loss caused by fire,

natural causes, vandalism, etc., depending upon the terms of

the policy.

Homeowner’s Association

(1) An association of people who own homes in a given area,

formed for the purpose of improving or maintaining the quality

of the area. (2) An association formed by the builder of condo-

miniums of planned developments, and required by statute in

some states. The builder’s participation as well as the duties of

the association are controlled by statue.

Homeowner’s Insurance

Includes the coverage of Hazard Insurance plus added coverage

such as personal liability, theft outside of the home (items

stolen from the insured’s car), and other such coverage.

Housing Starts

Number of houses on which construction has begun. The

figures are used to determine the availability, housing, need for

real estate loans, need for labor and materials, etc.

Impound Account

Account held by lender for payment of taxes, insurance, or

other periodic debts against real property. The borrower pays a

portion of, for example, the yearly taxes, with each monthly

payment. Lender pays the tax bill from the accumulated funds.

Index

An index used to adjust the interest rate of an adjustable rate

mortgage loan. For example: the change in U.S. Treasury

securities (T-bills) with a 1 year maturity. The weekly average

yield on securities, adjusted to a constant maturity of one year,

which is the result of weekly sales, may be obtained weekly.

This change in interest rates is the “index” for the change in the

specific adjustable rate of mortgage.

Instrument

A legal document, such as a deed, mortgage, will, lease, etc.

Interest Rate

The percentage of an amount of money which is paid in order to

borrow money for a specified amount of time.

Interest Rate Cap

The maximum interest rate increase of an adjustable rate loan.

For example: 6% loan with a 5% interest rate cap would have a

maximum interest for the life of the loan which would not

exceed 11%

46

GlossaryGlossary Investor

The holder of a mortgage or the permanent lender for whom

the mortgage banker services the loan. Any person or institution

that invests in mortgages.

Joint Tenancy

An undivided interest in property, taken by two or more joint

tenants. Interests must be equal, occurring under the same

conveyance, and beginning at the same time. Upon death of a

joint tenant, the interest passes to the surviving joint tenants,

rather than to heirs of the deceased.

Late Charge

A charge to the borrower for failure to pay an installment on

time.

Lease

An agreement by which an owner of real property gives the

right of possession to another for a specified period of time and

for a specified consideration (rent). Title does not pass.

Lease Purchase Agreement

Buyer makes a deposit for future purchases of a property with

the right to lease the property for the interim.

Legal Description

A method of geographically identifying a parcel of land, which is

acceptable in a court of law. A description of a parcel of land

sufficient to identify the property such as a lot and tract

number.

Lien

An encumbrance against property for money, either voluntary

or involuntary. All liens are encumbrances but all encumbrances

are not liens.

Lis Pendens

A legal notice recorded to show pending litigation relating to

real property, and giving notice that anyone acquiring an inter-

est in said property subsequent to the date of the notice may be

bound by the outcome of the litigation.

Loan to Value Ratio (LTV)

The ratio of the mortgage loan principal (amount borrowed) to

the property’s appraised value (selling price). Example—on a

$100,000 home, with a mortgage loan principal of $80,000 the

loan to value ratio is 80%.

Loan Origination Fee

A one time set up fee charged by a lender.

Loan Package

The file of all items necessary for the lender to decide to give or

not to give a loan. These items would include the information

on the prospective borrower (loan application, credit report,

financial statement, employment letters, etc.) and information

on the property (appraisal, survey, etc.)

Maintenance Reserve

Money reserved to cover anticipated maintenance costs.

Maker

One who executes (signs) as the maker (borrower) of a note.

Marketability

Saleability. The probability of selling property at a specific time,

price and terms.

Marketable Title

Title which can be readily marketed (sold) to a reasonably pru-

dent purchaser aware of the facts and their legal meaning con-

cerning liens and encumbrances.

Market Price

The price a property brings in a given market. Commonly used

interchangeably with market value, although not truly the

same.

Material Fact

A fact upon which an agreement is based, without which, said

agreement wouldn’t be made.

Maturity

Termination period of a note. For example: A 30 year mortgage

has a maturity of 30 years.

Mechanic’s Lien

A lien created by statute for the purpose of securing priority

payments for the price or value of work performed and materi-

als furnished in construction or repair of improvements to land,

and which attaches to the land as well as the improvements.

47

GlossaryGlossary Moisture Barrier

Insulating materials used to prevent the build up of moisture

(condensation) in walls and other parts of a building.

Mortgage

The party lending the money and receiving the mortgage. Some

states treat the mortgagee as the “legal” owner, entitled to

rents from the property. Other states treat the mortgagee as a

secured creditor, the mortgagor being the owner. The latter is

the more modern and accepted view.

Mortgage Credit Certificate (MMC) Program

A first time home buyer program subject to

purchase price and income limits and limited to certain counties.

The MCC program is actually a special tax credit and assists

buyers in qualifying on almost any loan program.

Mortgage Broker

This person assists in arranging funding or negotiating contracts

for a client. Broker usually charge fees or receive compensation.

Mortgage Insurance

Insurance written by an independent mortgage insurance

company protecting the mortgage lender against loss incurred

by a mortgage default, thus enabling the lender to lend a higher

percentage of the sale price. The Federal government writes this

form of insurance through FHA and VA.

Mortgagor

The party who borrows the money and gives the mortgage.

Multiple Listing

An exclusive listing, submitted to all members of an association,

so that each may have an opportunity to sell the property.

Note

A unilateral agreement containing an express and absolute

promise of the signer to pay to a named person, or order, or

bearer, a definite sum of money at a specified date or on

demand. It usually provides for interest and is generally

secured by mortgage or trust deed.

Notice of Action

A recorded notice that real property may be subject to a lien, or

even that the title is defective, due to pending litigation. Notice

of a pending suit, also called “Lis Penens”.

Notice of Cessation

A notice stating that work has stopped on a construction project.

Done to accelerate the period of filling a mechanic’s lien.

Notice of Completion

A notice, recorded to show that a construction job is finished.

The length of time in which mechanic’s liens may be filed

depends upon when and if a notice of completion is recorded.

Notice of Default

A notice filed to show that the borrower under the mortgage or

deed of trust is in default (behind on payments).

Offer

A presentation or proposal for acceptance, in order to form a

contract. To be legally binding, an offer must be definite as to

price and terms.

Origination Fee

(See Loan Origination Fee)

Owner Occupied

Property physically occupied by the owner.

Ownership

Rights to use, enjoyment, and alienation of property, to the

exclusion of others,. Concerning real property, absolute rights

are rare, being restricted by zoning laws, restriction, liens, etc.

Payment Cap

A maximum amount for a payment under an Adjustable

Mortgage Loan, regardless of the increase in the interest rate.

If the payment is less than the interest alone, negative

amortization is created.

Payoff

The payment in full of an existing loan or other lien.

Personal Property

Any property which is not designated by law as a real property.

Piggyback Loan

A loan made jointly by two or more lenders on the same

property under one mortgage or trust deed. One 90% loan, for

example, can have one lender loaning 80% and another

(subordinate) lender loaning the 10% (high risk portion).

48

GlossaryGlossary PITI (Principal, Interest, Taxes and Insurance)

Used to indicate what is included in a monthly payment on real

property. Principal, interest, property taxes, insurance (hazard)

are the four major portions of a usual monthly payment.

Power of Attorney

An authority by which one person (principal) enables another

(attorney-in-fact) to act for him. (1) General power authorizes

sale, mortgaging, etc., of all property of the principal. Invalid in

some jurisdictions. (2) Special power specifies property, buyers,

price and terms. How specific it must be varies in each state.

Preliminary Title Report

A report showing the conditions of title before a sale or loan

transaction. After completion of the transaction, a title

insurance policy is issued.

Prepaid Items

Those expenses of property which are paid in advance and are

usually prorated upon sale, such as taxes, insurance, rent, etc.

Prepayment Penalty

A penalty under a note, mortgage, or deed of trust, imposed

when the loan is paid before it is due.

Principal

(1) The person who gives authority to an agent or attorney.

(2) Amount of debt, not including interest. The face value of a

note, mortgage, etc.

Mortgage Insurance (MI)

Insurance against loss by a lender in the event of default by a

borrower (mortgagor). The insurance is similar to insurance by

a government agency such as FHA, except that it is issued by a

private insurance company. The premium is paid by the

borrower and is included in the mortgage payment.

Promisee

One to whom a promise has been made, such as the lender

under a promissory note.

Promisor

One who makes a promise. The borrower under a promissory note.

Promissory Note

A Promise in writing, and executed by the maker, to pay a

specified amount during a limited time, or on demand, or at

sight, to a named person, or on order, or to bearer.

Proration

To divide (prorate) property taxes, insurance premiums, rental

income, etc., between buyer and seller proportionately to the

time of use, or the date of closing.

Public Records

Usually at a county level, the records of all documents which

are necessary to give notice. The records are available to the

public. All transactions for real estate should be recorded.

Purchase Agreement

An agreement between buyer and seller of real property,

setting forth the price and terms of the sale.

Quitclaim Deed

A deed operating as a release: intended to pass any title,

interest, or claim which the grantor may have in the property,

but not containing any warranty of a valid interest or title in the

grantor.

Real Estate

(1) Land and anything permanently affixed to the land, such as

buildings, fences, and those things attached to the buildings,

such as light fixtures, plumbing and heating fixtures, or other

such items which would be personal property if not attached.

The term is generally synonymous with real property, although

in some states a fine distinction may be made. (2) May refer to

the rights in real property as well as the property itself.

Realtor

A member of local and state real estate boards, which are

affiliated with the National Association of Realtors (NAR).

Reconveyance

An instrument used to transfer title from a trustee to the

equitable owner of real estate, when title is held as collateral

security for a debt. Most commonly used upon payment in full

of a trust deed. Also called a deed of reconveyance or release.

Recording

Filling documents affecting real property as a matter of public

record, giving notice to future purchasers, creditors, or their

interested parties. Recording is controlled by statute and

usually requires the witnessing and notarizing of an instrument

to be recorded.

49

GlossaryGlossary Recording Fee

The amount paid to the recorder’s office in order to make a

document a matter of public record.

Rent With Option

A contract, which gives one the right to lease property at a

certain sum with the option to purchase at a future date.

RESPA

Real Estate Settlement Procedures Act. A Federal statute

effective June 20, 1975, requiring a disclosure of certain costs in

the sale of residential (one to four family) improved property

which is to be financed by a Federally insured lender.

Right of Survivorship

The right of survivor of deceased person to the property of the

said deceased. A distinguishing characteristic of a joint tenancy

relationship.

Sales Contract

Another name for a sales agreement; purchase agreement, etc.

Second Mortgage

A mortgage which ranks after a first mortgage in priority.

Properties may have two, or more mortgages, deeds of trust, or

land contracts, as liens at the same time. Legal priority would

determine whether they are called a first, second, third, etc. lien.

Septic System

Sewage system, where waste is drained through pipes and a tile

field (a system of clay tiles and gravel) into a septic tank. Found

in areas where city or county sewers have not yet been installed.

Septic Tank

An underground tank which a sanitary sewer drains into from a

building. Sewage is held until bacterial action changes the solids

into liquids or gasses, which are then released in the ground.

Simple Interest

Interest computed on principal alone, as opposed to compound.

Special Assignment

Lien assessed against real property by a public authority to pay

costs of public improvements (sidewalks, sewers, street lights,

etc.) which directly benefits the assessed property.

Specific Performance

An action to compel the performance of a contract, when money

damages for breach would not be satisfactory.

Statement of Identity

Also called Statement of Information, a confidential form filled

out by buyer and seller to help a title company determine if any

liens are recorded against either. Very helpful when people with

common names are involved.

Statute

A law which comes from a legislative body. A written law, rather

than a law established by court cases.

Subordinate

To make subject or junior to.

Succession

The passing of real property by will or inheritance, rather than

by grant or deed or any other form of purchase.

Severalty Ownership

Ownership by one person only. Sole Ownership.

Survey

The process by which a parcel of land is measured and its area

ascertained.

Tenancy in Common

Ownership by two or more persons who hold an undivided

interest without right of survivorship. (In event of the death of

one owner, his/her share will pass to his/her heirs.)

Title Insurance

An insurance policy which protects a real estate owner or lender

against and loss or damage they might experience because of

liens. Encumbrances, or defects in the title to the property, or

the incorrectness of the related search. It protects against claims

from various defects such as another person claiming an

ownership interest, improperly recorded documents, fraud,

forgery, liens, encroachments, easements and other items that

are specified in the actual policy.

Underwriting

Approves (or declines) funding to potential home buyers, based

upon factors such as credit, employment, assets, etc., and

matches approved risks with appropriate rates, terms and loan

amounts.