Below are some common real estate contract terms that every home buyer and seller should know.

Appraisal: An “opinion” of a home’s market value by a licensed appraiser.

BINSR: (Buyer’s Inspection Notice, Seller’s Response.) This is the contract used for the buyer to tell the seller what they are requesting to be fixed on the property in order for them to go forward with the purchase agreement.

Closing Costs: All the costs associated with processing the sale of your home.

Closing Disclosure: A 5-page form that provides final details regarding your mortgage loan including the terms, estimated monthly payment, fees and closing costs. Your lender is required to supply you with a copy of all of the closing costs a minimum of 3 days before closing.

Escrow Officer: An unbiased third party who ensures the real estate transaction is correctly carried out by all involved.

Escrow Company: Oversees the terms of a contract and handles all funds, bills and liens related the the transaction.

Insurance Claims History Report: A written report that describes a property’s past insurance claims. Often required by lenders.

MLS (Multiple Listing Service):

PreQualification and Verification of Funds:

Property Disclosures:

Settlement Statement:

Title Company:

Review Your Closing Disclosure: This document is TIME SENSITIVE, so it’s imperative that you look it over for accuracy and acknowledge receipt of it or you could delay closing.

Review Your Settlement Statement: This document outlines all of the costs associated with your real estate transaction and closing funds. Your Realtor will review it for accuracy as well prior to sending it to you. The Title Company will review it with you at the closing, however, if you catch any mistakes before closing, it can save everyone a great deal of stress and time not having to adjust it at the last minute while everyone is trying to close the transaction.

Arrange for Your Closing Funds: How do you plan to pay your closing costs? By check, cashier’s check or wire transfer.

Attend Your Closing Appointment: Bring all documentation needed and your ID to the meeting. The Title company will let you know what you need to bring.

Sign the Closing Documentation and Provide any Wiring for funds instructions or other payment approved by the Title company.

Title is Recorded: The Title company will submit the necessary documentation to the Recorder’s office to have the property recorded in your name. You do not officially own the property until it is recorded, and because of this, the keys to your new home will not be given to you until after the property transaction has been recorded. This can take a few hours, and usually you are allowed to leave the closing meeting and will receive a call from your Realtor when the recording has been successfully completed.

Congratulations. You are now a new home owner. You receive the keys to your new home and can move in!

The following list is to provide you with a brief overview of some of the most requested inspections that are conducted by Buyers.

Before you select your inspections, share your thoughts and concerns with your REALTOR®, so that they may provide you with additional considerations and make suggestions based on your expressed needs. By communicating openly with your REALTOR®, you can work collaboratively to get the most from your inspections, along with the peace of mind needed for you to decide whether to move forward with your purchase.

All these inspections can be coordinated by your REALTOR® to occur during your Inspection Period when provided with sufficient notice:

• Home Inspection
• Pest/Termite Inspection
• HVAC Inspection
• Sewer/Septic Line Scope
• Roof Inspection
• Pool Inspection
• Additional Inspections:

Additional Inspections:

Lead, Mold, Asbestos, Radon, Water Labs, and other environmental tests are available to be conducted by professionals as well. If you’re curious about something – just ask – there’s probably a way to have it inspected!

How to Get the Most out of Your Home Inspection:

• Notify your REALTOR® of all Inspections you would like to have coordinated as soon as possible*. Due to timeframes and other logistical challenges, it may not be possible to add more inspections after your initially chosen set of inspections are completed.
• Your REALTOR® will coordinate with the Seller and Listing Agent for property access to conduct the inspections.
• Your REALTOR® will coordinate with all the inspectors you choose so they can occur during optimal timeframes, and/or based on the Inspector’s availability.
• Payment for inspections is typically due at time of service. Unpaid invoices can lead to delays or withheld inspection reports.
• Some Home Inspectors offer an in-person Inspection Review Summary at the end of their Inspection so that they can walk the Buyers and their REALTOR® through their findings. Depending on your own availability, we always recommend that you plan to attend these summaries.
• Select Licensed Professionals to perform the Inspections whenever possible. E.g. a licensed roofer to inspect the roof; a licensed pest control company to perform the pest inspection…
• Ask your REALTOR® if they have any recommendations, or for a list of inspectors typically utilized by their other clients! Experienced and past working relationships can facilitate more effective communication, set clear expectations, and deliver better results for everyone involved.

Pro Tip:

Select all the inspections you want to have conducted up-front, so that you don’t exceed your contract’s Inspection Period timeframe. This is a very sensitive time for Sellers (and Buyers!), and Sellers are not always keen on extending the Buyer’s Inspection Period.

Federal Housing Administration (FHA)
The most common type of financing utilized in home purchases due to its less-stringent Buyer qualification requirements. Downpayment: 3.5+% of purchase price. Veteran’s Affairs (VA) Financing specifically for active duty, past US Military personnel, or survivors. Proof of veteran status is usually provided via their DD214. Downpayment: 0+% of purchase price.

Veteran’s Affairs (VA)
Financing specifically for active duty, past US Military personnel, or survivors. Proof of veteran status is usually provided via their DD214.

Downpayment: 0+% of purchase price.

United States Department of Agriculture (USDA)
Financing to encourage homeownership in rural locations. USDA maps depicting qualifiable areas are available on the usda.gov website.

Downpayment: 0+% of purchase price.

Conventional Financing (conforming)
Slightly more difficult to qualify for than FHA loans, with maximum loan amounts set by the government, Fannie Mae, Freddie Mac, or other companies that provide backing for these loans.

Downpayment: 20+%

Downpayment: <20+%

Conventional Financing (non-conforming)
Variable qualification requirements and can be utilized for unique properties or poor credit borrowers, so it is recommended to “shop” multiple lenders for these loan-types.

Downpayment: Variable.

One type of commonly utilized non-confirming home loan is called a “hard-money” loan, and usually features a higher interest rate and/or downpayment.

Other Mortgage Terminology:

Mortgage Insurance (aka “MI” or “MIP”)

An additional premium paid on conforming loans that is added to your monthly loan payment when the Borrower’s Downpayment is less than 20%.

VA Loans do not require Mortgage Insurance but do have a VA funding fee.

VA Funding Fee:

A one-time payment that the Veteran may be required to pay that helps lower the cost of the loan for US taxpayers, and keeps VA loan programs accessible and affordable to our service personnel and their families.

Pro Tip:

There are lenders and banks that specialize in different loan programs. Discuss your credit situation and lending goals with your REALTOR® so they can assist in connecting you to a local lender that can provide you with viable lending options! Maintain contact with your REALTOR® as you inquire with Lenders so that they can provide valuable insight and direction as needed.

• Every Buyer is unique, and every banking institution and lender has their own set of requirements.
• The type of property and its location may change what financing options are available.

What documentation and information does a Mortgage Loan Originator or Banking Institution typically require from a Buyer to provide a Mortgage Loan?

A Lender typically requires a handful of items

• Credit Report – Score & History
• Debt to Income Ratio (aka “DTI”)
• Consistent Job/Employment History
• Equity (Down Payment and Funds Available)

Some documentation that the Lender may request from the Buyers

• Driver’s License and Social Security Cards
• (2) Most recent paystubs (or 1099’s)
• W-2 Tax returns
• Bank Account Statements
• Completion of the Lender’s Application
• More information will be requested throughout your purchase process.

IMPORTANT Reminders

• Throughout the course of your purchase, it is imperative that you do NOT apply for any Credit Cards or Financing/Layaway of ANY kind, or you could be disqualified for your Mortgage Loan.
• If you would like to make a large purchase or finance something, reach out to your Lender and discuss it first.
• Notify the Lender prior to making any changes in your current employment status. A loss of job, or a job change, can result in the disqualification of your Mortgage Loan
• Pro Tip 1
• Ask your REALTOR® if they have any local lenders that they would recommend. Active REALTORS® have worked with many lenders over the course of their careers and can provide valuable insight into effective local Lending Teams.
• Pro Tip 2
• A local Lender or Banking Institution (including Credit Unions) can be an excellent resource. They are familiar with local state/county/city lending requirements – items that may be specific to your location.

Traditional New Construction Homes for Sale

Do not visit New Construction Builders without your REALTOR® present! (you may be waiving your right to representation)

Buying a New Construction Home comes with many benefits and may be a great option for you!

Always coordinate your first visit to the New Construction Home Site/Sales Office with your own REALTOR® so that you can be registered with your own representative. Most Builders will not allow you to include your own REALTOR® if they were not present during your initial visit.

Who’s Representative are they anyways?

• Builder is the Seller.
• Agent on-site is the Builder’s Agent.
• Builder’s Agent keeps Builder’s best interests in mind, just like a listing agent – Sell the house.
• The Builder’s Agent may, or may not be, a licensed REALTOR®.

REALTOR® Buyer Representation Benefits with New Construction

The Builder’s Agent can be a valuable resource to you, but why not have your own representative in your corner to facilitate that extra peace of mind?

Myth Busting: If you waive your right to representation, the Builders do not pass their savings to you. Builders typically already have the cost of Buyer-Representation factored into their cost basis, so there is no cost to the Buyer for their own representation! The Builder pays the Buyer’s Agent commission fees.

Your REALTOR® and Buyer Agent works for YOU! Knows what questions to ask the Builder* Negotiating extras Financing Options Overseeing Home Inspections Attending Builder walkthroughs and site appointments.

*Pro Tip: Your REALTOR® can ask the site-sales representative what phase of properties are being released next and when, to give you insight into when your preferred lot will become available. Sometimes, you can even purchase a home on a lot that hasn’t been released yet – just by asking!

Active

Active properties with no offers or contingencies.

Active Contingent

An offer has been accepted but the seller may still be permitting showing appointments and may still accept backup offers.

Pending

An offer has been accepted and the seller is not allowing showing appointments or backup offers.

Pending Short Sale Approval

Seller has accepted an offer and is awaiting short sale approval from the lender.

Signature Pending

Seller has verbally accepted an offer and is pending a signature(s).

Cancellation Provision

There is a provision to cancel the current offer with a replacement offer.

Temp off Market

The seller has requested that the property be temporarily taken off market. Listing may be brought back on market without a new listing agreement.

Expired

Listing agreement has expired.

Canceled

Listing agreement has been canceled.

Closed

Property has been sold.

Coming Soon

A Coming Soon listing is a listing taken by a Participant on a “Listing Agreement” that is, by direction of the Seller to be withheld from public dissemination by the MLS.

Regardless of the property type you’re interested in, always consult your REALTOR® first.
It’s our speciality.

Give yourself an edge over other Buyers during your property search by understanding the local real estate terminology for Residential Searches utilized in our MLSSAZ system. This will also better help you express your property criteria to your REALTOR®!

Residential Searches
Properties that are for sale or exchange where the final sale includes a structure that has been framed.

Single Family
A structure built on site, or in modules and assembled to a permanent foundation on site.

Condo
Real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of the separate portions. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners.

Townhouse
A duplex or multiple dwelling constructed as a series of dwelling units, all of which are attached to the adjacent dwelling units with no visible separation between walls or roofs, and with areas of individual and common ownership indicated on a subdivision plat.

Manufactured Single Family
A structure built after June 15, 1976 in accordance with the national manufactured home construction and safety standards act of 1974. The structure must be on a permanent chassis, capable of being transported in one or more sections and is designated to be used with a permanent foundation as a dwelling.

Mobile Home
A structure built prior to June 15, 1976 on a permanent chassis, capable of being transported in one or more sections and is designated to be used with a permanent foundation as a dwelling.

Multi Family
More than one legal residential unit on a single parcel.

New Construction
Builder owned and not previously occupied.

The following are brief considerations that you may find helpful when pursuing properties from various sources. It is important for you to research and understand your options, weigh your pros and cons, and assess your individual needs and preferences to make the best-informed decision that aligns with your budget and lifestyle. Working with a qualified real estate agent can provide you with guidance and support to navigate difficult transactional situations – including those challenges specific to the property type that you ultimately decide to purchase.

The Multiple Listing Service (MLS)

The MLS is a database used by real estate agents to list properties that are available for sale. The multiple listing service is limited to use by authorized licensees that comply with multiple listing policy requirements of the National Association of REALTORS®.

By uploading a listing to the MLS, other licensed agents and potential buyers can view the property’s details and coordinate showings. Homes in MLS vary in age, condition, and price range, to facilitate the most options possible to potential buyers.

Residential (Resale) Homes

A Residential (resale) home is a property that has been previously owned and lived in. When homeowners decide to sell their properties through a REALTOR®, the agent lists the property on the MLS. Other housing websites usually propagate their own marketing content directly from the local MLS. Residential (resale) properties typically comprise the majority of properties listed on the MLS.

New Construction Homes

New construction homes are properties that are under construction to be built, or have been recently built, and have never been lived in before. These homes are often constructed by developers or home-building companies. Buyers can purchase a newly built house from a builder or, in some cases, custom design their own home within the guidelines set by the developer. New construction homes offer the advantage of new warranties, modern design elements, energy-efficient features, and the opportunity to personalize certain aspects of the property. However, new construction properties typically also have a higher price tag compared to older (resale) homes.

How do I include my REALTOR®? Do not visit a New Construction builder without your REALTOR® or you may be waiving your right to your own representation for your purchase. Your agent must be present during your first visit and register you as their buyer client.

For Sale By Owner (FSBO) Properties

For Sale By Owner (FSBO) properties are homes being sold directly by the homeowner

without the involvement of a real estate agent. The homeowner/seller assumes the responsibilities typically handled by a listing agent – including marketing, coordinating/conducting showings, negotiating with potential buyers and managing the paperwork. For buyers, there might be additional room for pricing negotiations as the seller is not paying a listing agent’s commission. However, FSBO transactions can be more complex and time-consuming, as both parties need to navigate the process without representation.

How do I include my REALTOR®? If you come across a FSBO, ask your REALTOR® to reach out to the Seller on your behalf, so that your agent can ask the seller if they would consider cooperating (paying compensation) to your agent to represent you. Many FSBOs are not averse to compensating buyer agents if they bring the seller a buyer.

Foreclosures

Foreclosures, aka, “bank owned” or “REO” (Real Estate Owned) properties, are homes that have been repossessed by a bank or lender due to the previous owner’s failure to make mortgage payments. When a homeowner defaults on their mortgage, the lender initiates a foreclosure process to sell the property and recoup the outstanding debt. Foreclosed homes are usually sold through public auctions or listed on the market via a representative of the bank or lender. These properties may offer buyers the opportunity to purchase a home at a lower price, but they can also come with certain risks and drawbacks, such as potential property damage, lack of property information/history, or difficulties in inspecting the property prior to purchase.

How do I include my REALTOR®? Ask your agent! Depending on the source of the REO, you can usually still have a REALTOR® represent you in your purchase to help you navigate this process. These properties may be subject to bank/court/auction requirements.

*Please note that this list does not include the following property types: Land, Commercial, or Rentals. However, those properties can also be identified in the MLS system. We recommend you speak with your REALTOR® before pursuing these options to ensure that you are working with an agent who is competent in those fields, as they are niches that require navigating other contractual requirements and due diligence processes.

What Does it Mean to be a Realtor®.

REALTORS® aren’t just agents. They’re professional members of the National Association of REALTORS® and subscribe to its strict code of ethics. This is the REALTOR® difference for home buyers:

1. AN EXPERT GUIDE.

Buying a home can be a complex process that involves many forms, reports, disclosures, and other legal and financial documents. A knowledgeable REALTOR® can help you navigate this process, prepare the best deal, and circumvent delays or costly mistakes.

2. OBJECTIVE INFORMATION AND RESOURCES.

REALTORS® have tools and resources to help you meet your buying objectives. They can provide objective information on each property such as utilities, zoning, schools, and more. They have access to networks of other local professionals to meet all your real estate needs. REALTORS® maintain an unbiased perspective to keep your objectives in focus.

3. FINDING THE RIGHT PROPERTY.

When you work with a REALTOR®, you receive personalized service and help navigating all steps of the home buying process. To give you every advantage in your home search, REALTORS® have access to the Multiple Listing Service (MLS), which is a database of all the homes for sale in your area. The MLS is largely recognized as the source FOR other online databases, so you can search and evaluate properties confidently, with the most up to-date information available.

4. NEGOTIATION EXPERTISE.

A REALTOR® stands in your corner during all negotiations. They will consider all angles from your perspective to structure and negotiate a purchase agreement that is tailored to your particular needs. As your representative, they will continually work to optimize terms and outcomes to your benefit.

5. UP-TO-DATE EXPERIENCE.

Most people buy only a few homes in a lifetime, usually with quite a few years in between each purchase. Many agents will handle hundreds of transactions over the course of their career. Even if you’ve done it before, laws and regulations change. REALTORS® stay informed and are required to attend continuing education courses regularly.

6. YOUR ROCK DURING EMOTIONAL MOMENTS.

A home is so much more than four walls and a roof. For some, buying a home represents the biggest purchase they’ll ever make. Having a concerned, but objective, trusted REALTOR® on your side helps you stay focused on the issues most important to you.

7. FAIR AND ETHICAL TREATMENT.

REALTORS® adhere to a strict code of ethics, which is based on professionalism and protection of the public. As a client, you can expect honest and ethical treatment in all transaction-related matters.

Communication in the Real Estate Industry is Key to Success

Communication is the key to building trust and rapport with my clients. That is why I always strive to communicate with you in the way that you prefer, whether it is by phone, text, email, or any other channel. You deserve to be treated with respect and care and I want you to feel comfortable and confident when you work with me. I value your time and attention. I know that buying property can be exciting, rewarding and challenging. That is why I will always listen to you attentively, respond to you promptly, and provide you with clear and accurate information.

I want to make your buying experience enjoyable and successful. I also encourage you to ask me any questions you may have about the buying process. I have the knowledge and experience to answer your questions and guide you through every step of the way. If there is something I do not know, I have access to a network of experts who can help me find the answer for you. I want you to be informed and empowered as a buyer.

I am always available for you whenever you need me. You can reach me anytime during my working hours. If you have an urgent issue or a special request, please let me know and I will do my best to accommodate you. You can also schedule a call or a meeting with me in advance if you prefer. I am flexible and adaptable to your needs and preferences. You are my priority, and I will always go the extra mile for you.

Today we’ll begin the exciting process of preparing your property for sale and creating a complete marketing and sales plan to meet the needs of your real estate listing. It is important to keep in mind that selling real estate is a complicated process. I will be working hard to market your property both to other real estate professionals and to consumers, attract interested and qualified buyers, and negotiate the final transaction. Throughout this process, we will need to work as a team to make sure your needs and desires are met.

This guide was designed to inform you about all the steps of selling a listing so that you can feel confident, make informed decisions, and act as an educated seller. You can download a pdf of this Buyer’s Guide by clicking the link above and download it if you want to keep it for a reference or read it later. It is pretty lengthy.

Please take some time to review carefully all of the information presented here. If you have any questions about the topics discussed, I will be glad to go over them with you in detail. Since every real estate transaction is unique, you will most likely have questions or concerns not presented here. That’s what I’m for – to answer your questions, to guide you through every step of the transaction, and to make sure your home gets sold.

Let’s get started…

L.J. Creapeau – Tierra Antigua Realtor.