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10 Steps to Home Ownership – Buyers Guide

June 4, 2011 2:53 pm
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Step 1: Are You Ready?

10 Steps to Home Ownership

Knowledge and experience are the keys to successful real estate transactions. REALTOR.com® contains an enormous amount of valuable information, and such data — combined with the expertise, experience and training of local REALTORS® — can be the essential keys to your success.

One of the keys to making the home-buying process easier and more understandable is planning. In doing so, you’ll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the home-buying process.

Do You Know What You Want?
Whether you are a first-time home buyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe?

Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting with local REALTORS®.

Do You Have The Money?
Homes and financing are closely intertwined. (Financing is the difference between the purchase price and the down payment, commonly referred to as debt or the mortgage.) The good news is that over the years new and innovative loan programs have evolved which require a 5 percent down payment or less. In fact, a number of programs now allow purchasers to buy real estate with nothing down.

In addition to a down payment, purchasers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite closing costs.

Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most home buyers choose to buy with some cash up front.

As to closing costs, in markets where buyers have leverage, it may be possible to negotiate an offer for a home that requires the owner to pay some or all of your settlement expenses. Speak with local REALTORS® for details.

 

Is Your Financial House in Order?
Those great loans with little or nothing down are not available to everyone: You need good credit. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.

 

 

Step 2: Get a Realtor

10 Steps to Home Ownership

More than 2 million people in the United States have earned real estate licenses. However, real estate is a tough business with a steep dropout rate, and the result is that only a small percentage of those with licenses actively help buyers and sellers.

The National Association of REALTORS® (NAR) includes 1 million brokers and salespeople, individuals bound together with a strong Code of Ethics, extensive training opportunities and a wealth of community information. NAR members are routinely active in PTAs, local government committees and a variety of neighborhood organizations. Being actively involved in community affairs provides REALTORS® with a better understanding of the area in which they are selling.

Why?
Buying and selling real estate is a complex matter. At first it might seem that by checking local picture books or online sites you could quickly find the right home at the right price.

But a basic rule in real estate is that all properties are unique. No two properties — even two identical models on the same street — are precisely and exactly alike. Homes differ and so do contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike.

In this maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area.

How do you choose?
In every community you’re likely to find a number of realty brokerages. Because there is heated competition, local REALTORS® must fight hard to succeed in your community.

The best place to find a local REALTOR® is from REALTOR.com’s® extensive listing of community professionals and properties. Other sources include open houses, local advertising, Web sites, referrals from other REALTORS®, recommendations from neighbors and suggestions from lenders, attorneys, financial planners and CPAs. The experiences and recommendations of past clients can be invaluable.

In many cases buyers will interview several REALTORS® before selecting one professional with whom to work. These interviews represent a good opportunity to consider such issues as training, experience, representation and professional certifications.

What should you expect when you work with a REALTOR®?
Once you select a REALTOR® you will want to establish a proper business relationship. You likely know that some REALTORS® represent sellers while others represent buyers. Each REALTOR® will explain the options available, describe how he or she typically works with individuals and provide you with complete agency disclosures (the ins and outs of your relationship with the agent) as required in your state.

Once hired for the job, the REALTOR® will provide you with information detailing current market conditions, financing options and negotiating issues that might apply to a given situation. Remember: Because market conditions can change and the strategies that apply in one negotiation may be inappropriate in another, this information should not be set in stone. During your time in the marketplace REALTORS® will keep you updated and alert you to each step in the transaction process.

 

Step 3: Get Loan Pre approval

10 Steps to Home Ownership

Few people can buy a home for cash. According to the National Association of REALTORS® (NAR), nearly nine out of 10 buyers finance their purchase, which means that virtually all buyers — especially first-time purchasers — required a loan.

The real issue with real estate financing is not getting a loan (virtually anyone willing to pay lofty interest rates can find a mortgage). Instead, the idea is to get the loan that’s right for you — the mortgage with the lowest cost and best terms.

REALTORS® routinely suggest that consumers start the mortgage process well before bidding on a home. Many lenders (the sources of money) and programs, for example, are available right here in the finance section of Realtor.com as well as through recommendations from local REALTORS®. By meeting with lenders — either online or face to face — and looking at loan options, you will find which programs best meet your needs and how much you can afford.

REALTORS® also recommend pre approvals for another reason: Purchase forms often require buyers to apply for financing within a given time period, in many cases, seven to 10 days. By meeting with loan officers in advance and identifying mortgage programs, it won’t be necessary to quickly find a lender, check credit, and rush into a financing decision that may not be the best option.

What is it?
“Pre-approval” means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre approval letter, which shows your borrowing power. You can visit as many lenders as you like and get several pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.

Although not a final loan commitment, the pre approval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

How do you get pre-approval?
Real estate financing is available from numerous sources, including lenders here in the finance section of Realtor.com, mortgage companies that have worked with local REALTORS® and in some cases, individual REALTORS® themselves. Based on his or her experience, the REALTOR® may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms.

The loan officer will carefully review your financial situation, including your credit report and other information. The lender will then suggest programs which most-closely meet your needs. For instance, a first-time buyer may qualify for state-backed mortgage programs with little money down and low interest rates, while a repeat purchaser (someone who has bought a home before) with more equity (money invested in the home) might want to get a 15-year loan and the lower overall interest costs it represents. Typically, first-time buyers opt for the traditional 30-year loan, with either a floating interest rate or a fixed rate of interest over the life of the loan.

 

 

Step 4: Look at Homes

10 Steps to Home Ownership

Millions of new and existing homes are sold each year. There’s no shortage of housing options, but with so many choices the challenge becomes finding the property which best meets your needs.

The housing market is complicated because the stock of homes for sale is always in flux. If it were possible to have a complete list of every home for sale at this very moment in a given community, such a list would become obsolete within seconds as new homes become available and properties now for sale are put under contract.

In effect, buyers are looking at a moving target in a marketplace that is never static. Because of this, it is important to know as much as possible about the choices in preferred markets, and the way to do that is by working closely with a local REALTOR® who has a good lay of the land.

What are you looking for?
A home is more than just a collection of bedrooms and bathrooms. Several properties — each with four bedrooms, three baths, and the same price — may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes.

Each of us is different and so it’s important to list the features and benefits you want in a home. Consider such things as pricing, location, size, amenities (extras such as a pool or extra-large kitchen) and design (one floor or two, colonial or modern, etc.).

Next, it’s important to consider your priorities. If you can’t get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? A longer commute for a bigger lot and lower cost?

Lastly, consider your needs in several years. If you’ll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future. If you expect your income to increase, perhaps you should consider a more expensive home financed with a loan program where monthly payments increase in the future.

Where should you look?
All neighborhoods and communities have a special nature that gives them identity and value. One community may be well known for historic homes while another offers both suburban living as well as easy access to downtown office areas.

REALTOR.com® offers millions of homes online. By any standard, it’s the largest source for property information, online or off. You can look at homes to contact listing brokers, and you can also search Realtor.com® to find brokers who offer buyer representation services.

How do you find a house?
Some buyers like to search REALTOR.com® by looking at listings on the basis of location or price; others prefer to have local REALTORS® suggest properties; and many buyers prefer both approaches.

Regardless of your choice, it’s important to target your search. By using basic measures such as general location and affordability, you can refine your search and focus on homes that offer the most desirable features.

As a guide, you should maintain a file with information on each of the homes you like. You can print out listing pages from REALTOR.com® and then make notes for each one — what you like, questions, REALTOR® contact data, etc.

 

Step 5: Choose a Home

10 Steps to Home Ownership

There’s no doubt that choosing a home is a big decision and you want to do it right.

As a buyer, here’s what actually happens. A home has been placed on the market for which the seller has established an asking price as well as other terms. In effect, this is an offer. At this point, you have three choices: accept the seller’s offer and create a contract; reject it and not make an offer; or suggest different terms and make a counter-offer. If you choose this last option, the seller may accept, reject or make a counter-offer.

No aspect of the home buying process is more complex, personal or variable than bargaining between buyers and sellers. This is the point where the value of an experienced REALTOR® is clearly evident because he or she knows the community, has seen numerous homes for sale, knows local values and has spent years negotiating realty transactions.

 

Is it THE house?
A house is shelter, but a home is far more. It’s where you live, relax, entertain friends, raise families, and work. A home is where you spend much of your life, and so choosing a house is an enormous decision.

How do you know if a house is THE one? Probably the best approach is to look at as many homes as possible, something made easy by Realtor.com, where you can quickly and easily view huge numbers of homes, check prices, take video tours and view extensive neighborhood information. Once your choices have been narrowed, you can then contact a local REALTOR® to find specific information and options.

Can you really afford it?
Remember Step 2 – the pre-approval process? Getting pre-approved means you have a very good idea of how much you can borrow, what loan programs will most likely work best in your situation and how much home you can afford.

How reliable is a pre-approval? While pre-approval is not a loan commitment, it’s still necessary for lenders to check such items as appraisals and the latest credit reports. Despite fluctuating interest rates, pre-approval nonetheless provides a reasoned, careful analysis of what you can afford. After all, loan officers are routinely paid only when loans are originated. It doesn’t make much sense for loan officers to suggest high loan limits that later can’t be delivered.

 

Step 6: Get Funding

10 Steps to Home Ownership

 

Often the cost of real estate financing is routinely greater than the original purchase price of a home (after including interest and closing costs). Because financing is so important, buyers should have as much information as possible regarding mortgage options and costs.

Realtor.com® provides consumers with extensive mortgage information as well as a variety of loan calculators. Local REALTORS® can provide mortgage information, discuss financing options and recommend loan sources. In addition, some REALTORS® also originate loans.

What kind of loan?
There are thousands of loans available out there from a variety of lenders, but in general, the mortgage you choose will likely be determined by at least several key factors:

  • How much down? Loans with 5 percent down or less are available — in fact, loans from major lenders with no money down have appeared in recent years.
  • If you place less than 20 percent down, lenders will want the mortgage guaranteed by an outside third party such as the Veterans Administration (VA), the Federal Housing Administration (FHA) or a private mortgage insurer (PMI, or private mortgage insurance, is required by lender to protect against any mortgage defaults). Millions of VA, FHA and PMI loans are generated each year.
  • How’s your credit? The best rates and terms are only available to those with solid credit. To get the best loans, make a point of paying credit cards, installment payments, rent and mortgage bills in full and on time.
  • Are you a first-time buyer? It might seem that “first-time buyer” means someone who has never owned property before, but under most state programs, the term refers to those who have not owned property within the past three years. State-backed first-timer programs often feature smaller down-payments and below-market interest rates. For details, speak with your local REALTOR®.

How do you get a loan?
To obtain a loan you must complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. During the prequalification procedure, the loan officer will describe the type of paperwork required.

Where do you get a loan?
Mortgage financing can be obtained from mortgage bankers, mortgage brokers, savings and loan associations, mutual savings banks, commercial banks, credit unions, and insurance companies. A growing number of REALTORS® can also arrange financing

 

 

Step 7: Make an Offer

10 Steps to Home Ownership

 

REALTOR® groups, working with legal counsel, have developed forms that are appropriate for realty transactions in specific communities. Such documents include numerous sale conditions and their wording should be carefully reviewed to assure that they reflect the terms you want to offer. REALTORS® can explain the general contracting process in your community as well as his or her role.

While much attention is spent on offering prices, a proposal to buy includes both the price and terms. In some cases, terms can represent thousands of dollars in additional value for buyers — or additional costs. Terms are extremely important and should be carefully reviewed.

How much?
You sometimes hear that the amount of your offer should be x percent below the seller’s asking price or y percent less than you’re really willing to pay. In practice, the offer depends on the basic laws of supply and demand: If many buyers are competing for homes, then sellers will likely get full-price offers and sometimes even more. If demand is weak, then offers below the asking price may be in order.

How do you make an offer?
The process of making offers varies around the country. In a typical situation, you will complete an offer that the REALTOR® will present to the owner and the owner’s representative.         The owner, in turn, may accept the offer, reject it or make a counter-offer.

Because counter-offers are common (any change in an offer can be considered a “counter-offer”), it’s important for buyers to remain in close contact with REALTORS® during the negotiation process so that any proposed changes can be quickly reviewed.

 

How many inspections?
A number of inspections are common in residential realty transactions. They include checks for termites, surveys to determine boundaries, appraisals to determine value for lenders, title reviews and structural inspections.

Structural inspections are particularly important. During these examinations, an inspector comes to the property to determine if there are material physical defects and whether expensive repairs and replacements are likely to be required in the next few years. Such inspections for a single-family home often require two or three hours, and buyers should attend. This is an opportunity to examine the property’s mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through.

 

Step 8: Get Insurance

10 Steps to Home Ownership

No one would drive a car without insurance, so it figures that no homeowner should be without insurance.

The essential idea behind various forms of real estate insurance is to protect owners in the event of catastrophe. If something goes wrong, insurance can be the bargain of a lifetime.

What kind and how much?
There are various forms of insurance associated with home ownership, including these major types:

Title insurance: Purchased with a one-time fee at closing, title insurance protects owners in the event that title to the property is found to be invalid. Coverage includes “lenders” policies, which protect buyers up to the mortgage value of the property, and “owners” coverage, which protects owners up to the purchase price. In other words, “owners” coverage protects both the mortgage amount and the value of the down payment.

Homeowners’ insurance: Homeowner’s insurance provides fire, theft and liability coverage. Homeowners’ policies are required by lenders and often cover a surprising number of items, including in some cases such property as wedding rings, furniture and home office equipment.

Flood insurance: Generally required in high-risk flood-prone areas, this insurance is issued by the federal government and provides as much as $250,000 in coverage for a single-family home plus $100,000 for contents. Local REALTORS® can explain which locations require such coverage.

Home warranties: With new homes, buyers want assurance that if something goes wrong after completion the builder will be there to make repairs. But what if the builder refuses to do the work or goes out of business?

Home warranties bought from third parties by home builders are generally designed to provide several forms of protection: workmanship for the first year, mechanical problems such as plumbing and wiring for the first two years, and structural defects for up to 10 years.

Home warranties for existing homes are typically one-year service agreements purchased by sellers. In the event of a covered defect or breakdown, the warranty firm will step in and make the repair or cover its cost.

Insurance policies and warranties have limitations and individual programs have different levels of coverage, deductibles and costs. For details, speak with REALTORS®, insurance brokers and home builders.

Where to look.
REALTORS® often provide home insurance and such policies are also available from insurance brokers.

 

How do you get insurance?
The time to obtain insurance and warranty coverage is at closing, so speak with a REALTOR® or insurance broker prior to closing. Be sure to ask about limitations, costs, deductibles and “endorsements” (additional forms of coverage that may be available).

 

Step 9: Closing

10 Steps to Home Ownership

Go to any local courthouse and you can find property records detailing real estate ownership in your community — sometimes records that date back hundreds of years.

These records are important because they provide today’s owners with proof that they have good, marketable and insurable title to the property they are selling. Equally important, such records enable buyers to provide proof of ownership when they sell.

The closing process, which in different parts of the country is also known as “settlement” or “escrow,” is increasingly computerized and automated. In many cases, buyers and sellers don’t need to attend a specific event; signed paperwork can be sent to the closing agent via overnight delivery.

In practice, closings bring together a variety of parties who are part of the “transaction” process. For example, while the history of property ownership has been checked, it’s possible that the records contain errors, unrecorded claims or flaws in the review itself, thus title insurance is necessary. At closing, transfer taxes must be paid and other claims must also be settled (including closing costs, legal fees and adjustments). In most transactions, the closing agent also completes the paperwork needed to record the loan.

What to expect
Settlement is a brief process where all of the necessary paperwork needed to complete the transaction is signed. Closing is typically held in an office setting, sometimes with both buyer and seller at the same table, sometimes with each party completing their papers separately.

Whatever the case, the result is that title to the property is transferred from seller to buyer. The buyer receives the keys and the seller receives payment for the home. From the amount credited to the seller, the closing agent subtracts money to pay off the existing mortgage and other transaction costs. Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices.

What you need to do
One of the best parts of settlement is that buyers and sellers need to do very little.

Before closing, buyers typically have a final opportunity to walk through the property to assure that its condition has not materially changed since the sale agreement was signed. At closing itself, all papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sale agreement and allows all parties to the transaction to verify their interests. For instance, buyers get the title to the property, lenders have their loans recorded in the public records and state governments collect their transfer taxes.

 

Step 10: What’s Next?

10 Steps to Home Ownership

You’ve done it. You’ve looked at properties, made an offer, obtained financing and gone to closing. The home is yours. Is there any more to the home buying process?

Whether you’re a first-time buyer or a repeat buyer, there are several more steps you’ll want to take.

Those papers you received at settlement are extremely valuable, so hold on to them! In the short-term they can help establish tax deductions for the year in which the property was purchased. In the future, such papers will be important for tax purposes when the property is sold, and in some cases, for calculating estate taxes.
Also at closing, determine the status of the utilities required by the home, items such as water, sewage, gas, electric and oil service. You want utility bills to be paid in full by owners as of closing and you also want services transferred to your name for billing. Usually such transfers can be done without turning off utilities. REALTORS® can provide contact numbers and related information.

About two weeks after closing, contact your local property records office and confirm that your deed has been officially recorded. Such records are public notices that show your interest in the property.

 

Moving in
It is generally understood that sellers will leave homes “broom clean” when moving out. This expression does not mean “vacuumed” or “spotless.” Broom clean makes sense because it means the house is ready to be painted and cleaned.

 

Your home, your money
For most owners a home is the largest single asset they hold, so it makes sense to protect that asset.

Many owners make a photo or video record of the home and their possessions for insurance purposes and then keep the records in a safety deposit box. Your insurance provider can recommend what to photograph and how to secure it.

You want to maintain fire, theft and liability insurance. As the value of your property increases such coverage should also rise. Again, speak with your insurance professional for details.

Lastly, enjoy your home. Owning real estate involves contracts, loans, and taxes, but ultimately what’s most important is that home ownership should be a wonderful experience.

 

Enjoy!

 

 

7 Steps to House-Selling Success

2:51 pm
posted by admin

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Step 1: Plan and Prepare to Sell Your House

7 Steps to House-selling Success

Million of existing homes are sold each year, and while each transaction is different every owner wants the same thing — the best possible deal with the least amount of hassle and aggravation.

Unfortunately, home selling has become a more complex business than it used to be. New seller disclosure statements, longer and more mysterious form agreements, and a range of environmental concerns have all emerged in the past decade.

More importantly, the home-selling process has changed. Buyer brokerage — where REALTORS® represent homebuyers — is now common nationwide, and good buyer-brokers want the best for their clients.

The result is that while hundreds of thousands of existing homes may be sold each week, the process is not as easy for sellers as it was five or 10 years ago. Surviving in today’s real estate world requires experience and training in such fields as real estate marketing, financing, negotiation and closing — the very expertise available from local REALTORS®.

Are you ready?
The home-selling process typically starts several months before a property is made available for sale. It’s necessary to look at a home through the eyes of a prospective buyer and determine what needs to be cleaned, painted, repaired and tossed out.

Ask yourself: If you were buying this home what would you want to see? The goal is to show a home which looks good, maximizes space and attracts as many buyers — and as much demand — as possible.

While part of the “getting ready” phase relates to repairs, painting and other home improvements, this is also a good time to ask why you really want to sell.

Selling a home is an important matter and there should be a good reason to sell — perhaps a job change to a new community or the need for more space. Your reason for selling can impact the negotiating process so it’s important to discuss your needs and wants in private with the REALTOR® who lists your home.

When should you sell?
The marketplace tends to be more active in the summer because parents want to enroll children in classes at the beginning of the school year (usually August). The summer is also typically when most homes are likely to be available.

Generally speaking, markets tend to have some balance between buyers and sellers year-round. In a given community, for example, there may be fewer buyers in late December, but there are also likely to be fewer homes available for purchase. So, home prices tend to rise or fall because of general demand patterns rather than the time of the year.

Owners are encouraged to sell when the property is ready for sale, there is a need or desire to sell, and the services of a local REALTOR® have been retained.

How do you improve your home’s value?
The general rule in real estate is that buyers seek the least expensive home in the best neighborhood they can afford. In terms of improvements, this means you want a home that fits in the neighborhood but is not over-improved. For example, if most homes in your neighborhood have three bedrooms, two baths and 2,500 sq. ft. of finished space, a property with five bedrooms, more baths and far more space would likely be priced much higher and likely be more difficult to sell.

Improvements should be made so that the property shows well, is consistent with the neighborhood and does not involve capital investments, the cost of which cannot be recovered from the sale. Furthermore, improvements should reflect community preferences.

Cosmetic improvements – paint, wallpaper and landscaping – help a home “show” better and often are good investments. Mechanical repairs – to ensure that all systems and appliances are in good working condition – are required to get a top price.

Ideally, you want to be sure that your property is competitive with other homes available in the community. REALTORS®, who see numerous homes, can provide suggestions that are consistent with your marketplace.

 

Step 2: Get a REALTOR®

7 Steps to House-selling Success

Before placing a home on the market you should also identify REALTORS® in your community who can assist with the sale. Because Realtor.com is the largest real estate site online, it’s a perfect place to look when seeking realty services. Realtor.com lists realty professionals nationwide, and you can find those active in your community through extensive directories and property listings.

Why use a REALTOR®?
There are more than 2 million people nationwide who have licenses to sell real estate, of which about over 1 million members belong to the National Association of Realtors (NAR). Only NAR members are entitled to use the term “REALTOR®.”

NAR members must adhere to a strict Code of Ethics. By joining NAR, individuals have access to a wide range of classes, seminars and certification opportunities. Local REALTOR® groups are active in community matters, and individual members are routinely involved in PTAs and other neighborhood organizations.

In essence, local REALTORS® are community experts. They track real estate trends, share neighborhood concerns and participate in local matters. They’re good neighbors who are in the business of helping others buy and sell homes.

How do you choose a REALTOR®?
Whether you’re a first-time seller or someone who has sold many homes, there are several ways to find a local REALTOR®:

Use the “Find a REALTOR®” search engine on REALTOR.com® to find individuals who actively sell in your community.

Get recommendations from past sellers.

  • Look for REALTOR® signs in your community.
  • Check the classifieds in local newspapers and “shopper” publications.
  • Look at the listings in local real estate magazines.

In some cases, sellers elect to meet only with one REALTOR® while other owners elect to meet with several. Whatever your preference, there will be a number of questions you will want to ask, including:

  • What services do you offer?
  • What type of representation do you provide? (There are various forms of representation in different states. Some brokers represent buyers, some represent sellers, some facilitate transactions as a neutral party, and in some cases different salespeople in a single firm may represent different parties within a transaction.)
  • What experience do you have in my immediate area?
  • How long are homes in this neighborhood typically on the market? (Be aware that because all homes are unique, some will sell faster than others. Several factors can impact the amount of time a home remains on the market, including changing interest rates and local economic trends.)
  • How would you price my home? Ask about recent home sales and comparable properties currently on the market. If you speak with several REALTORS® and their price estimates differ, that’s OK, but be sure to ask how their price opinions were determined and why they think your home would sell for a given value.
  • How will you market my home? At listing presentations, brokers will provide a detailed summary of how they market homes, what marketing strategies have worked in the past and which marketing efforts may be effective for your home.
  • What is your fee? Brokerage fees are established in the marketplace and not set by law or regulation. Typically, brokers who list homes are compensated on a performance basis – that is, the broker is not paid unless the home sells under the terms and conditions that are acceptable to you.
  • What happens if another REALTOR® locates a purchaser? That is, who will that broker represent, and how will he or she be paid?
  • What disclosures should you receive? State rules require brokers to provide extensive agency disclosure information, usually at the first sit-down meeting with an owner or buyer.
  • How long do you want to list your home? A “listing” agreement is a contract that shows the broker’s obligations and outlines the terms under which your home is being made available for sale. The length of the agreement is a negotiable matter.

What should you expect when working with a REALTOR®? Once your home is listed with a REALTOR®, he or she will immediately begin to market your home according to the most appropriate conventions for your community.

Your REALTOR® should keep you informed as the marketing process unfolds and as expressions of interest are received. In time, the marketing plan may be modified to reflect buyer reactions and changes in the marketplace.

In real estate there are written offers and oral offers. Oral offers (“Would they take $225,000 for the home?”) are not acceptable because they generally cannot be enforced (“Gee, did I say $225,000? I was sure I said $215,000”). Written offers created by the REALTOR® with assistance from qualified attorneys address numerous issues, are consistent with local requirements and provide the foundation for an actionable offer.

 

Step 3: Set the Price

7 Steps to House-selling Success

Every reasonable owner wants the best possible price and terms for his or her home. Several factors, including market conditions and interest rates, will determine how much you can get for your home. The idea is to get the maximum price and the best terms during the window of time when your home is being marketed.

In other words, home selling is part science, part marketing, part negotiation and part art. Unlike math where 2 + 2 always equals 4, in real estate there is no certain conclusion. All transactions are different, and because of this, you should do as much as possible to prepare your home for sale and engage the REALTOR® you feel is best able to sell your home.

What is your home worth?
All homes have a price, and sometimes more than one. There’s the price owners would like to get, the value buyers would like to offer and a point of agreement which can result in a sale.

In considering home values, several factors are important:

  • The value of your home relates to local sale prices. The same home, located elsewhere, would likely have a different value.
  • Sale prices are a product of supply and demand. If you live in a community with an expanding job base, a growing population and a limited housing supply, it’s likely that prices will rise. Alternatively, it’s important to be realistic. If the local community is losing jobs and people are moving out, then you’ll likely have a buyer’s market.
  • Owner needs can impact sale values. If owner Smith “must” sell quickly, he will have less leverage in the marketplace. Buyers may think that Smith is willing to trade a quick closing for a lower price — and they may be right. If Smith has no incentive to sell quickly, he may have more marketplace strength.
  • Sale prices are not based on what owners “need.” When an owner says, “I must sell for $300,000 because I need $100,000 in cash to buy my next home,” buyers will quickly ask if $300,000 is a reasonable price for the property. If similar homes in the same community are selling for $250,000, the seller will not be successful.
  • Sale prices are NOT the whole deal. Which would you rather have: A sale price of $200,000, or a sale price of $205,000 but where you agree to make a “seller contribution” of $5,000 to offset the buyer’s closing costs, pay a $2,000 allowance for roof repairs, fund two mortgage points, re-paint the entire house and leave the washer and dryer?

How much is too much?
Because all transactions are unique there is flexibility in the marketplace. The amount of flexibility depends on local conditions.

For example, suppose you’re selling a townhouse. Suppose also that there have been five recent sales of the model you own and that sale values have ranged between $200,000 and $210,000. You now have an idea of how your home might be priced. In a strong market perhaps you can ask for $210,000 or a little more. If the market has slowed, $210,000 may be a reasonable asking price, but perhaps more than the final sale price.

Here’s another scenario. Imagine that you live in a community of Victorian-style homes, most of which were built in the 1920s. All the homes are different in terms of size, condition, modernization, style and features. In such a neighborhood, an average sale price is just a statistic without much practical meaning. On a single block one home may sell for $400,000 while another is priced at more than $1 million. The average price may be outrageously high for one home and staggeringly low for another.

 

Who can help?
Experienced REALTORS® are active in the local marketplace and can provide assistance with pricing, marketing, negotiation and closing.

Because experienced REALTORS® have handled many transactions, they’re familiar with the terms and conditions that went into individual sales, not just published sale prices which may not reflect various premiums, discounts and adjustments.

 

 

Step 4: Market it

7 Steps to House-selling Success

If you bought a car, you could purchase a given model with selected features from any dealer. Since the car comes from one assembly plant, it’s going to be the same whether purchased from dealer Smith or dealer Jones.

Homes are different. Each is unique, the marketplace is always in flux, interest rates constantly change and new buyers search for homes each day. With such fluidity, it requires REALTORS® to craft marketing plans specifically for individual homes and market conditions.

Selling can entail a variety of marketing strategies. Once listed, it’s likely that the home will be quickly entered into the local MLS (Multiple Listing Service) and placed on REALTOR.com®. REALTORS® routinely market by mail with new-listing announcements and regular newsletters. Open houses, broker access to the home via the use of a lock box and networking with both local and out-of-town brokers are also common.

Much of a broker’s work will be quiet and unseen — yet important. The quiet telephone calls, the work with contacts, the follow-ups with open-house visitors, conversations with ad respondents, the web postings and other outreach efforts are all part of the process required to sell homes.

Experienced REALTORS® base their marketing efforts on previous transactions and ongoing research. For instance, according to the National Association of Realtors (NAR), most people begin their home-buying process on the Internet. NAR numbers also show that most households move within 10 miles of their current location while 20 percent move at least 50 miles.

How to market your home.
If you look at a typical transaction you can see that there are five general areas where REALTORS® can assist in the home-selling process.

  • Preparation: Before being placed on the market, homes must be in “show” condition. REALTORS® can explain what repairs and upgrades are required for individual homes which are most likely to produce the best results.
  • Pricing: Brokers do more than price homes for sale, they also construct sale terms designed to speed the selling process. It may be, for example, that a home priced at $150,000 with a 2 percent seller credit to the buyer at closing will be far more attractive to purchasers than a home priced at $147,000. Why? That 2 percent credit is worth $3,000 to the purchaser at closing — the time when buyers are most likely strapped for cash.
  • Marketing: REALTORS® will execute strategies and programs to get the home sold. Typically this includes placement on the local MLS and Realtor.com as well as related marketing, advertising and networking.
  • Negotiation: REALTORS® assist owners in the bargaining process, offering advice and counsel as offers are received and by working closely with legal counsel, tax specialists and inspectors as required.
  • Closing: Once a contract for the purchase of a home has been accepted, a series of inspections and checks are typically required to satisfy buyers and lenders. REALTORS® can help owners complete the transaction process by assisting with the many requirements found in a typical sale agreement.

How to hold an open house.
There are no universal marketing standards for real estate because marketplaces are localized. For instance, open houses may be common in some communities but rarely used in others.

In the case of an open house, a REALTOR® typically advertises that the home will be open for a given period (2-5 p.m. on Sunday). During the open period, the REALTOR® hosts the home while the owners leave for a few hours.

At the open house, the REALTOR® will provide literature, maintain a visitor log and answer questions. By interacting with visitors, the REALTOR® will seek feedback regarding the home and opportunities to follow up with prospective purchasers.

How do you show your home online?
The Internet is an important factor in real estate marketing and will likely become more important in the future.

The Internet has two important roles in the real estate selling process. First, it is a “place” to view real estate. Realtor.com, for example, lists about millions of homes, the largest group of homes online or off. Individual REALTORS® also maintain thousands of localized sites while professional groups and, likewise, industry organizations, have an online presence.

Online real estate information includes not only home listings, but numerous additional features and benefits. For instance, Homestore® offers neighborhood information, school data, recent home sale prices, video tours, model forms, real estate news and consumer information.

Equally important, the Internet offers new communication media. E-mail and instant messaging give REALTORS® and consumers more opportunities to keep in touch. As the Internet evolves, more technologies and techniques will be introduced to make transactions easier and more efficient.

 

 

Step 5: Sell it

7 Steps to House-selling Success

There is no question that selling a home is an important event. A home sale represents transition, movement and change. Big money is involved. Households move from the known and comfortable to the unknown and a period of adjustment. There may be job changes, new schools, distance from old friends and the possibility of new ones.

No less important, a home sale by itself can be complex. There will be people looking at your house, documents to sign and issues to be negotiated.

Because a home sale involves an array of both personal and business concerns, it’s important to get it done right. You need to carefully prepare your home, understand the market and see what alternatives are realistically available. The old motto “be prepared” is a good guide in such circumstances.

 

What’s an acceptable offer?
The goal of every seller is to have a line of buyers outside the front door, each clutching higher and higher offers. And while this has been known to happen, in most markets there is some balance between the number of buyers and sellers. A number of factors determine whether a buyer’s offer is acceptable. They include:

  • Is the offer at or near the asking price? Is the offer above the asking price?
  • Has the buyer accepted the asking price or something close? Has the buyer then buried thousands of dollars in discounts and seller costs within tiny clauses and contract additions?
  • What is the alternative to the buyer’s offer? If a home has not attracted an offer in months, then sellers need to determine if a better deal is possible — recognizing that each month costs are being incurred for mortgage payments, taxes and insurance.
  • Does the owner have enough time to wait for other offers?
  • What if no other offers are received?
  • What if several offers are received? Do you choose the high offer from the purchaser with questionable finances who may not be able to close, or a somewhat lesser offer from a buyer with preapproved financing?

In each case, owners — with assistance from REALTORS® — will need to carefully review offers, consider marketplace options and then determine whether an offer is acceptable.

What is a counter-offer?
When a home is made available for sale the owner is essentially making an offer to buyers: For a given number of dollars and other terms you can acquire this home. Buyers, in turn, can respond with several options:

  • Not interested.
  • Yes, we’ll buy on the owner’s terms.
  • We’re interested and here’s our counter-offer.

A counter-offer is nothing more than a new offer. And just as the buyer had three options in response to the owner’s original price and terms, the seller can now choose one of three reactions: accept the offer, decline the offer or make a fresh counter-offer.

Offers and counter-offers reflect the back-and-forth activity of the marketplace. It’s an efficient and practical process — but also one that may contain tricky clauses and hidden costs. The REALTOR® who lists your home can explain the local bargaining process in detail and assist in the actual negotiations.

 

How do you negotiate?
It’s sometimes argued that negotiation must produce one “winner” and one “loser.” Others suggest that a “win/win” situation is possible where each side gets something of value.

Real estate bargaining typically involves compromises by both sides. It’s not war; it’s not winner-take-all; and it’s not the time to take personally any comments made by purchasers.

Instead, negotiating should be seen as a natural business process; buyers should be treated with respect; and owners should never lose sight of either their best interests or their baseline transaction requirements. These are the standards unique to each owner, which must be met before the home can be sold.

 

Step 6: Closing

7 Steps to House-selling Success

It might seem as though once a sale agreement has been signed that the selling process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin.

A sale agreement sets not only a purchase price for the home, but also a series of terms and conditions. For instance:

  • Contracts routinely depend on the ability of a buyer to obtain financing, which is why most sellers prefer buyers with preapproval letters from lenders.
  • A growing percentage of transactions involve a home inspection, or a physical review of the home by a trained and independent observer.
  • Lenders will establish numerous conditions before granting a loan. They will want a title exam, title insurance to protect against title errors, termite inspections, surveys and an appraisal to assure that the home has sufficient value to secure the loan

The REALTOR® typically arranges required inspections and helps the owner prepare for closing.

 

When should you close?
With automation now available, closings can occur within a week in some areas — at least in theory. In practice, it takes time to arrange financing, conduct inspections, obtain appraisals, locate replacement housing, contact movers, pack and actually move.

While instant closings are not practical, neither are closings too far in the future. The problem with closings much past 60 days is that loan rates are difficult to lock in. If mortgage rates go up, it’s possible that the buyer will no longer be able to afford the home and thus the deal may fall through.

The result of these considerations is that most homes close 30 to 45 days after a sale agreement has been signed.

What happens?
Closing — or “settlement” or “escrow” as it is known in some areas — is essentially a meeting where the closing agent (the party who conducts settlement) takes in money from the buyers, pays out money to the owner and makes sure that the purchaser’s title is properly recorded in local records along with any mortgage liens.

The closing agent reviews the sale agreement to determine what payments and credits the owner should receive and what amounts are due from the buyer. The closing agent also assures that certain transaction costs are paid (taxes and title searches).

Closing is also the time when “adjustments” will be made. For instance, suppose you’ve pre-paid taxes four months in advance. In this case, the closing agent will compensate you for the prepayment at closing by having the buyer pay you additional money.

It could also work in reverse. If you are behind on property taxes, the closing agent will reduce the money due to you at settlement by the amount of the unpaid taxes.

 

How do you prepare to sell?
It’s important to look at the sale agreement and review your obligations. For instance, if you have agreed to paint a room or replace the dishwasher, such work must be completed before closing. Your REALTOR® can discuss your agreement and the steps which must be taken to complete the transaction.

The closing agent will handle both the settlement papers and related documents.

 

Step 7: Moving

7 Steps to House-selling Success

 

Even the smallest home contains a lot of furniture, clothes, kitchen equipment, pictures and other items. For a short move, it may be worthwhile to transport small goods by yourself, but larger items will likely require a professional mover.

Our moving center provides calculators as well as information on moving options, storage, truck rentals and related topics. This information, plus assistance and advice from your REALTOR®, can ease the moving process.

 

How do you plan a move?
The time to plan your move begins once you’ve decided to sell your home. Some of the activities required to sell the home can actually help with the moving process. For example, cleaning out closets, basements and attics means there will be less to do once the home is under contract.

Your planning will be guided by a number of things:

  • Are you moving a long distance? If yes, you’ll likely require an interstate mover and the use of a large van.
  • Moving internationally. Contact the embassy in Washington, D.C., for information. Be aware that items which may be entirely common in the United States can be prohibited in foreign countries. Ask about customs protocols, duties and taxes.
  • Moving locally? If yes, will you move yourself? You’ll need to consider packing boxes, peanuts, blankets or padding and a van rental.
  • Planning is key. Stock up on boxes, packing materials, tape and markers. Always mark boxes so that movers will know where goods should be placed.

Who should you use?
The decision of who to use can begin with a visit to REALTOR.com’s® moving center and discussions with the REALTOR® who is marketing your home.

There are a number of factors to consider. Money is one issue: You’ll want to spend as little as possible, but choosing only on the basis of cost can be a mistake. Movers must have the right equipment, training and experience to do a good job. A mover, no matter how large or small, should be able to provide recent references for home sellers with a similar volume of goods to transport.

Get mover estimates in writing. Be aware that it’s possible to get discounts through membership organizations and, sometimes, on the basis of your profession: Clergy, for example, sometimes qualify for a discount.

Always confirm mover credentials. Movers should be licensed and bonded as required in your state, and employees should have workman’s comp insurance.

 

Get a checklist.
Moving is a big job and checklists can make it more organized and easier. Here are some of the major items to consider:

  • Money. If you’re moving more than a few miles then you should have enough cash or credit to cover travel, food, transportation and lodging.
  • Medicine. Keep medicines and related prescriptions in a place where they will be available during the move.
  • Number boxes so that all items can be counted on arrival. Make a list of boxes by number and indicate their contents.
  • If moving with children, make sure that each has a favorite toy or toys, blankets, games, music and other goods.
  • Moving historic, breakable or valued items? Such goods routinely require special handling and packaging.
  • Have address books readily available in case you need help.
  • If you have a laptop computer with a modem, make it accessible during your trip to pick up business and personal e-mail.

 

 

 

Glossary of Housing Terms

May 30, 2011 3:38 pm
posted by admin

The following glossay from Fannie Mae is used by permission.

A | B | CD | E | F | G | HI | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z |

401(k)/403(b): An employer-sponsored investment plan thatallows individuals to set aside tax-deferred income for retirement or emergency
purposes. 401(k) plans are provided by employers that are private corporations.

403(b) plans are provided by employers that are not for profit organizations.

401(k)/403(b) loan: Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans — monies must be repaid to avoid serious penalty charges.

A

acceleration clause: A provision in a mortgage that gives the lender the right to demand payment of the entire principal balance if a monthly payment is missed.

acceptance: An offeree’s consent to enter into a contract and be bound by the terms of the offer.

additional principal payment: A payment by a borrower of more than the scheduled principal amount due in order to reduce the remaining balance on the loan.

adjustable-rate mortgage (ARM): 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.

adjusted basis: The original cost of a property plus the value of any capital expenditures for improvements to the property minus any depreciation taken.

adjustment date: The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

adjustment period: The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

administrator: A person appointed by a probate court to administer the estate of a person who died intestate.

affordability analysis: A detailed analysis of your ability to afford the purchase of a home. An affordability analysis takes into consideration your income, liabilities and available funds, along with the type of mortgage you plan to use, the area where you want to purchase a home and the closing costs that you might expect to pay.

amenity: A feature of real property that enhances its attractiveness and increases the occupant?s or user?s satisfaction although the feature is not essential to the property?s use. Natural amenities include a pleasant or desirable location near water, scenic views of the surrounding area, etc. Human-made amenities include swimming pools, tennis courts, community buildings and other recreational facilities.

amortization: The gradual repayment of a mortgage loan by installments.

amortization schedule: A timetable for payment of a mortgage loan. An amortization schedule shows the amount of each payment applied to interest and principal and shows the remaining balance after each payment is made.

amortization term: The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.

amortize: To repay a mortgage with regular payments that cover both principal and interest.

annual mortgagor statement: A report sent to the mortgagor (the borrower) each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.

annual percentage rate (APR): The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance and loan origination fee (points).

annuity: An amount paid yearly or at other regular intervals, often on a guaranteed dollar basis.

application: A form used to apply for a mortgage loan and to record pertinent information concerning a prospective mortgagor and the proposed security. Lenders use the information on the loan application to evaluate whether or not they can give the loan, and if so, the amount of money they can lend.

appraisal: A written analysis of the estimated value of a property prepared by a qualified appraiser. Contrast with home inspection.

appraised value: An opinion of a property’s fair market value, based on an appraiser’s knowledge, experience and analysis of the property.

appraiser: A person qualified by education, training and experience to estimate the value of real property and personal property.

appreciation: An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.

assessed value: The valuation placed on property by a public tax assessor for purposes of taxation.

assessment: The process of placing a value on property for the strict purpose of taxation. May also refer to a levy against property for
a special purpose, such as a sewer assessment. assessment rolls: The public record of taxable property.

assessor: A public official who establishes the value of a property for taxation purposes.

asset: Anything of monetary value that is owned by a person. Assets include real property, personal property and enforceable claims against others (including bank accounts, stocks, mutual funds and so on).

assignment: The transfer of a mortgage from one person to another.

assumable mortgage: A mortgage that can be taken over (“assumed”) by the buyer when a home is sold.

assumption: The transfer of the seller?s existing mortgage to the buyer. See assumable mortgage.

assumption clause: A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The
loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

assumption fee: The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.

attorney-in-fact: One who holds a power of attorney from another to execute documents on behalf of the grantor of the power.

B

balance sheet: A financial statement that shows assets, liabilities and net worth as of a specific date.

balloon mortgage: A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at
the end of an earlier specified term. The principal and interest on the loanare amortized over a longer period than the actual term of the mortgage.

balloon payment: The final lump sum payment that is made at the maturity date of a balloon mortgage.

bankrupt: A person, firm, or corporation that, through a court proceeding, is relieved from the payment of all debts after the surrender of all assets to a court-appointed trustee.

bankruptcy: A proceeding in a federal court in which a debtor who owes more than his or her assets can relieve the debts by transferring his or her assets
to a trustee.

before-tax income: Income before taxes are deducted.

beneficiary: The person designated to receive the income from a trust, estate or a deed of trust.

bequeath: To transfer personal property through a will.

betterment: An improvement that increases property value as distinguished from repairs or replacements that simply maintain value.

bill of sale: A written document that transfers title to personal property.

binder: A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.

biweekly payment mortgage: A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the borrower?s bank account. The result for the borrower is a substantial savings in interest.

blanket insurance policy: A single policy that covers more than one piece of property (or more than one person).

blanket mortgage: The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

bona fide: In good faith, without fraud.

bond: An interest-bearing certificate of debt with a maturity date. An obligation of a government or business corporation. A real estate bond is a written obligation usually secured by a mortgage or a deed of trust.

breach: A violation of any legal obligation.

bridge loan: A form of second trust that is collateralized by the borrower’s present home (which is usually for sale) in a manner that allows the proceeds
to be used for closing on a new house before the present home is sold. Also known as “swing loan.”

broker: A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

budget: A detailed plan of income and expenses expected over a certain period of time. A budget can provide guidelines for managing future investments and
expenses.

budget category: A category of income or expense data that you can use in a budget. You can also define your own budget categories and add them to some or all of the budgets you create. “Rent” is an example of an expense category. “Salary” is a typical income category.

building code: Local regulations that control design, construction and materials used in construction. Building codes are based on safety and health standards.

buydown account: An account in which funds are held so that they can be applied as part of the monthly mortgage payment as each payment comes due during the period that an interest rate buydown plan is in effect.

buydown mortgage: A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower?s monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest rate over the entire life of a mortgage.

C

call option: A provision in the mortgage that gives the mortgagee (the lender) the right to call the mortgage due and payable at the end of a specified period for whatever reason.

cap: A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease. See lifetime payment cap, lifetime rate cap, periodic payment cap and periodic rate cap.

capital: (1) Money used to create income, either as an investment in a business or an income property. (2) The money or property comprising the wealth owned or used by a person or business enterprise. (3) The accumulated wealth of a person or business. (4) The net worth of a business represented by the amount by which its assets exceed liabilities.

capital expenditure: The cost of an improvement made to extend the useful life of a property or to add to its value.

capital improvement: Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

cash-out refinance: A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance
transaction in which the borrower receives additional cash that can be used for any purpose.

certificate of deposit: A document written by a bank or other financial institution that is evidence of a deposit, with the issuer’s promise to return the deposit plus earnings at a specified interest rate within a specified time period. See adjustable rate mortgage (ARM).

certificate of deposit index: An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weekly average of secondary market interest rates on six-month negotiable certificates of deposit. See adjustable-rate mortgage.

Certificate of Eligibility: A document issued by the federal government certifying a veteran’s eligibility for a Department of Veterans Affairs (VA) mortgage.

Certificate of Reasonable Value (CRV): A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA mortgage.

certificate of title: A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner.

chain of title: The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

change frequency: The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).

chattel: Another name for personal property.

clear title: A title that is free of liens or legal questions as to ownership of the property.

closing: A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called “settlement.” At this meeting, ownership of the property is transferred from the seller to the buyer.

closing cost item: A fee or amount that a home buyer must pay at closing for a single service, tax, or product. Closing costs are made up of individual closing cost items such as origination fees and attorney’s fees. Many closing cost items are included as numbered items on the HUD-1 statement.

closing costs: Expenses (over and above the price of the property) incurred by buyers and sellers in transferring ownership of a property. Closing costs normally include an origination fee, an attorney’s fee, taxes, an amount placed in escrow and charges for obtaining title insurance and a survey. Closing costs percentage will vary according to the area of the country; lenders or REALTORS® often provide estimates of closing costs to prospective homebuyers.

closing statement: See HUD-1 statement.

cloud on title: Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action.

coinsurance: A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the relationship between the amount of the policy and a specified percentage of the actual value of the property insured at the time of the loss.

coinsurance clause: A provision in a hazard insurance policy that states the amount of coverage that must be maintained — as a percentage of the total value of the property — for the insured to collect the full amount of a loss.

collateral: An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

collection: The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.

co-maker: A person who signs a promissory note along with the borrower. A co-maker’s signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. See endorser.

commission: The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan.

commitment letter: A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a “loan commitment.”

common area assessments: Levies against individual unit owners in a condominium or planned unit development (PUD) project for additional capital to defray homeowners’ association costs and expenses and to repair, replace, maintain, improve or operate the common areas of the project.

common areas: Those portions of a building, land and amenities owned (or managed) by a planned unit development (PUD) or condominium project’s homeowners’ association (or a cooperative project’s cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

common law: An unwritten body of law based on general custom in England and used to an extent in the United States.

Community Land Trust Mortgage Option: An alternative financing option that enables low- and moderate-income home buyers to purchase housing that has been improved by a nonprofit Community Land Trust and to lease the land on which the property stands.

community property: In some western and southwestern states, a form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.

Community Seconds®: An alternative financing option for low- and moderate-income households under which an investor purchases a first mortgage that has      a subsidized second mortgage behind it. The second mortgage may be issued by a state, county or local housing agency, foundation, or nonprofit  organization. Payment on the second mortgage is often deferred and carries a very low interest rate (or no interest rate at all). Part of the debt may be forgiven incrementally for each year the buyer remains in the home.

comparables: An abbreviation for “comparable properties”; used for comparative purposes in the appraisal process. Comparables are properties like the property under
consideration; they have reasonably the same size, location and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.

compound interest: Interest paid on the original principal balance and on the accrued and unpaid interest.

condemnation: The determination that a building is not fit for use or is dangerous and must be destroyed; the taking of private property for a public purpose through an exercise of the right of eminent domain.

condominium: A real estate project in which each unit owner has title to a unit in a building, an undivided interest in the common areas of the project and sometimes the exclusive use of certain limited common areas.

condominium conversion: Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

condominium hotel: A condominium project that has rental or registration desks, short-term occupancy, food and telephone services and daily cleaning services and that is operated as a commercial hotel even though the units are individually owned.

construction loan: A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.

contingency: A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

contract: An oral or written agreement to do or not to do a certain thing.

conventional mortgage: A mortgage that is not insured or guaranteed by the federal government. Contrast with government mortgage.

convertibility clause: A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.

convertible ARM: An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.

cooperative (co-op): A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

cooperative corporation: A business trust entity that holds title to a cooperative project and grants occupancy rights to particular apartments or units to shareholders through proprietary leases or similar arrangements.

cooperative mortgages: Mortgages related to a cooperative project. This usually refers to the multifamily mortgage covering the entire project but occasionally describes the share loans on the individual units.

cooperative project: A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title.

corporate relocation: Arrangements under which an employer moves an employee to another area as part of the employer’s normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office

capacity. cost of funds index (COFI): An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It represents the weighted-average cost of savings, borrowings and advances of the 11th District members of the Federal Home Loan Bank of San Francisco. See adjustable-rate mortgage (ARM).

covenant: A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

credit: An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.

credit history: A record of an individual’s open and fully repaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.

credit life insurance: A type of insurance often bought by mortgagors because it will pay off the mortgage debt if the mortgagor dies while the policy is in force.

creditor: A person to whom money is owed.

credit report: A report of an individual’s credit history prepared by a credit bureau and used by a lender in determining a loan applicant’s creditworthiness.

credit reporting agency (or bureau): An organization that prepares reports that are used by lenders to determine a potential borrower’s credit history. The agency obtains data for these reports from a credit repository as well as from other sources.

credit repository: An organization that gathers, records, updates and stores financial and public records information about the payment records of individuals who are being considered for credit.

D

debt: An amount owed to another. See installment loan and revolving liability.

deed: The legal document conveying title to a property.

deed-in-lieu: A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure. Also called a “voluntary conveyance.”

deed of trust: The document used in some states instead of a mortgage; title is conveyed to a trustee.

default: Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

delinquency: Failure to make mortgage payments when mortgage payments are due.

deposit: A sum of money given to bind the sale of real estate, or a sum of money given to ensure payment or an advance of funds in the processing of a loan. See earnest money deposit.

depreciation: A decline in the value of property; the opposite of appreciation.

discount points: See point.

dower: The rights of a widow in the property of her husband at his death.

down payment: The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.

due-on-sale provision: A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.

due-on-transfer provision: This terminology is usually used for second mortgages. See due-on-sale provision.

E

earnest money deposit: A deposit made by the potential home buyer to show that he or she is serious about buying the house.

easement: A right of way giving persons other than the owner access to or over a property.

effective age: An appraiser?s estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

effective gross income: Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

eminent domain: The right of a government to take private property for public use upon payment of its fair market value. Eminent domain is the basis for condemnation
proceedings.

employer-assisted housing: A special housing initiative that offers several different ways for employers to work with local lenders to develop plans to assist their employees in purchasing homes.

encroachment: An improvement that intrudes illegally on another?s property.

encumbrance: Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements or restrictions.

endorser: A person who signs ownership interest over to another party. Contrast with co-maker.

Equal Credit Opportunity Act (ECOA): A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

equity: A homeowner’s financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage.

escrow: An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or escrow agent to be disbursed upon the closing of a sale of real estate.

escrow account: The account in which a mortgage servicer holds the borrower’s escrow payments prior to paying property expenses.

escrow analysis: The periodic examination of escrow accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance and other bills when due.

escrow collections: Funds collected by the servicer and set aside in an escrow account to pay the borrower?s property taxes, mortgage insurance and hazard insurance. escrow disbursements The use of escrow funds to pay real estate taxes, hazard insurance, mortgage insurance and other property expenses as they become due.

escrow payment: The portion of a mortgagor?s monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments
and other items as they become due. Known as “impounds” or “reserves” in some states.

estate: The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

eviction: The lawful expulsion of an occupant from real property.

examination of title: The report on the title of a property from the public records or an abstract of the title.

exclusive listing: A written contract that gives a licensed real estate agent the exclusive right to sell a property for a specified time, but reserving the owner?s right to sell the property alone without the payment of a commission.

executor: A person named in a will to administer an estate. The court will appoint an administrator if no

F

Fair Credit Reporting Act: A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one’s credit record.

fair market value: The highest price that a buyer, willing but not compelled to buy, would pay and the lowest a seller, willing but not compelled to sell, would accept.

Fannie Mae: A New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation’s largest source of financing for home mortgages.

Fannie Mae Properties: Fannie Mae owns, manages and has available for sale, single-family detached homes, two- to four-unit properties, condominiums and townhouses in a variety of neighborhoods. The number, type and sales price may vary substantially. The homes vary in age and may require repairs. Fannie Mae homes are sold through local real estate brokers whose contact information is provided in the Fannie Mae Properties for Sale search results on homepath.com.

Fannie Mae’s Community Home Buyer’s Program(SM): An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family’s buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions.

Fannie 97®: A financing option for a fixed-rate mortgage that offers home buyers a 3 percent down payment loan with a term between 15 and 30 years. The mortgage features a loan-to-value (LTV) percentage of 97 percent, and is designed to expand homeownership opportunities for people with modest incomes. Borrowers must take a pre-purchase home-buyer education session to qualify for a Fannie 97 mortgage.

Federal Housing Administration (FHA): An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

fee simple: The greatest possible interest a person can have in real estate.

fee simple estate: An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.

FHA coinsured mortgage: A mortgage (under FHA Section 244) for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the mortgagor’s default.

FHA mortgage: A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

finder’s fee: A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

firm commitment: A lender?s agreement to make a loan to a specific borrower on a specific property.

first mortgage: A mortgage that is the primary lien against a property.

fixed installment: The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.

fixed-rate mortgage (FRM): A mortgage in which the interest rate does not change during the entire term of the loan.

fixture: Personal property that becomes real property when attached in a permanent manner to real estate.

flood insurance: Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

foreclosure: The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

forfeiture: The loss of money, property, rights or privileges due to a breach of legal obligation.

fully amortized ARM: An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.

G

government mortgage: A mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Rural  Housing Service (RHS). Contrast with conventional mortage.

Government National Mortgage Association: A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Created by Congress on Sept. 1, 1968, GNMA assumed responsibility for the special assistance loan program formerly administered by Fannie Mae. Popularly known as Ginnie Mae.

grantee: The person to whom an interest in real property is conveyed.

grantor: The person conveying an interest in real property.

ground rent: The amount of money that is paid for the use of land when title to a property is held as a leasehold estate rather than as a fee simple estate.

group home: A single-family residential structure designed or adapted for occupancy by unrelated developmentally disabled persons. The structure provides long-term housing and support services that are residential in nature.

growing-equity mortgage (GEM): A fixed-rate mortgage that provides scheduled payment increases over an established period of time, with the increased amount of the monthly payment applied directly toward reducing the remaining balance of the mortgage.

guarantee mortgage: A mortgage that is guaranteed by a third party.

guaranteed loan: Also known as a government mortgage.

H

hazard insurance: Insurance coverage that compensates for physical damage to a property from fire, wind, vandalism, or other hazards.

Home Equity Conversion Mortgage (HECM): A special type of mortgage that enables older home owners to convert the equity they have in their homes into cash, using a variety of payment options to address their specific financial needs. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property. Sometimes called a reverse mortgage.

home equity line of credit: A mortgage loan, which is usually in a subordinate position, that allows the borrower to obtain multiple advances of the loan proceeds at his or her own discretion, up to an amount that represents a specified percentage of the borrower’s equity in a property.

home inspection: A thorough inspection that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser. Contrast with appraisal.

HomeKeeper(SM): Fannie Mae’s adjustable-rate conventional reverse mortgage, which allows older homeowners to borrow against the value of their homes and receive the proceeds according to the payment option they select. The amount available is based on the number of borrowers and their ages and the adjusted property value. Anyone 62 years or older who either owns his or her own home free and clear or has very low mortgage debt is eligible.

homeowners’ association: A nonprofit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.

homeowner’s insurance: An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

homeowner’s warranty (HOW): A type of insurance that covers repairs to specified parts of a house for a specific period of time. It is provided by the builder or property seller as a condition of the sale.

HomeStyle® Mortgage Loan: A mortgage that enables eligible borrowers to obtain financing to remodel, repair and upgrade their existing homes or homes that they are purchasing. See also HomeStyle Standard Mortgage, HomeStyle Remodeler, HomeStyle Community Mortgage and HomeStyle Consumer Energy Loan.

housing expense ratio: The percentage of gross monthly income that goes toward paying housing expenses.

HUD median income: Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 statement: A document that provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points and initial escrow amounts. Each item on the statement is represented by a separate number within a standardized numbering system. The totals at the bottom of the HUD-1 statement define the seller’s net proceeds and the buyer’s net payment at closing. The blank form for the statement is published by the Department of Housing and Urban Development (HUD). The HUD-1 statement is also known as the “closing statement” or “settlement sheet.”

I

income property: Real estate developed or improved to produce income.

index: A number used to compute the interest rate for an adjustable-rate mortgage (ARM). The index is generally a published number or percentage, such as the average interest rate or yield on Treasury bills. A margin is added to the index to determine the interest rate that will be charged on the ARM. This interest rate is subject to any
caps that are associated with the mortgage.

in-file credit report: An objective account, normally computer-generated, of credit and legal information obtained from a credit repository.

inflation: An increase in the amount of money or credit available in relation to the amount of goods or services available, which causes an increase in the general price level of goods and services. Over time, inflation reduces the purchasing power of a dollar, making it worth less.

initial interest rate: The original interest rate of the mortgage at the time of closing. This rate changes for an adjustable-rate mortgage (ARM). Sometimes known as “start rate” or “teaser.”

installment: The regular periodic payment that a borrower agrees to make to a lender. installment loan Borrowed money that is repaid in equal payments, known as installments. A furniture loan is often paid for as an installment loan.

insurable title: A property title that a title insurance company agrees to
insure against defects and disputes. <

insurance: A contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy, and the periodic payment is known as an insurance premium.

insurance binder: A document that states that insurance is temporarily in effect. Because the coverage will expire by a specified date, a permanent policy must be obtained before the expiration date.

insured mortgage: A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.

interest: The fee charged for borrowing money.

interest accrual rate: The percentage rate at which interest accrues on the mortgage. In most cases, it is also the rate used to calculate the monthly payments, although it is not used for an adjustable-rate mortgage (ARM) with payment change limitations.

interest rate: The rate of interest in effect for the monthly payment due.

interest rate buydown plan: An arrangement wherein the property seller (or any other party) deposits money to an account so that it can be released each month to reduce the mortgagor’s monthly payments during the early years of a mortgage. During the specified period, the mortgagor’s effective interest rate is “bought down” below the actual interest rate.

interest rate ceiling: For an adjustable-rate mortgage (ARM), the maximum interest rate, as specified in the mortgage note.

interest rate floor: For an adjustable-rate mortgage (ARM), the minimum interest rate, as specified in the mortgage note.

investment property: A property that is not occupied by the owner.

IRA (Individual Retirement Account): A retirement account that allows individuals to make tax-deferred contributions to a personal retirement fund. Individuals can place IRA funds in bank accounts or in other forms of investment such as stocks, bonds or mutual funds.

J

joint tenancy: A form of co-ownership that gives each tenant equal interest and equal rights in the property, including the right of survivorship.

judgment: A decision made by a court of law. In judgments that require the repayment of a debt, the court may place a lien against the debtor’s real property as collateral for the judgment’s creditor.

judgment lien: A lien on the property of a debtor resulting from the decree of a court.

judicial foreclosure: A type of foreclosure proceeding used in some states that is handled as a civil lawsuit and conducted entirely under the auspices of a court.

jumbo loan: A loan that exceeds Fannie Mae?s mortgage amount limits. Also called a nonconforming loan.

L

late charge: The penalty a borrower must pay when a payment is made a stated number of days (usually 15) after the due date.

lease: A written agreement between the property owner and a tenant that stipulates the conditions under which the tenant may possess the real estate for a specified
period of time and rent.

leasehold estate: A way of holding title to a property wherein the mortgagor does not actually own the property but rather has a recorded long-term lease on it.

lease-purchase mortgage loan: An alternative financing option that allows low- and moderate-income home buyers to lease a home from a nonprofit organization with an option to buy. Each month’s rent payment consists of principal, interest, taxes and insurance (PITI) payments on the first mortgage plus an extra amount that is earmarked for deposit to a savings account in which money for a downpayment will accumulate.

legal description: A property description, recognized by law, that is sufficient to locate and identify the property without oral testimony.

liabilities: A person’s financial obligations. Liabilities include long-term and short-term debt, as well as any other amounts that are owed to others.

liability insurance: Insurance coverage that offers protection against claims alleging that a property owner’s negligence or inappropriate action resulted in bodily injury or property damage to another party.

lien: A legal claim against a property that must be paid off when the property is sold.

lifetime payment cap: For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease over the life of the mortgage. See cap.

lifetime rate cap: For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the life of the loan. See cap, interest rate ceiling and interest rate floor.

line of credit: An agreement by a commercial bank or other financial institution to extend credit up to a certain amount for a certain time to a specified borrower. See home equity line of credit.

liquid asset: A cash asset or an asset that is easily converted into cash.

loan: A sum of borrowed money (principal) that is generally repaid with interest.

loan commitment: See commitment letter.

loan origination: The process by which a mortgage lender brings into existence a mortgage secured by real property.

loan-to-value (LTV) percentage: The relationship between the principal balance of the mortgage and the appraised value (or sales price if it is lower) of the property. For example, a $100,000 home with an $80,000 mortgage has a LTV percentage of 80 percent.

lock-in: A written agreement in which the lender guarantees a specified interest rate if a mortgage goes to closing within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.

lock-in period: The time period during which the lender has guaranteed an interest rate to a borrower. See lock-in.

M

margin: For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest rate on each adjustment date, subject to any limitations on the interest rate change.

master association: A homeowners’ association in a large condominium or planned unit development (PUD) project that is made up of representatives from associations covering specific areas within the project. In effect, it is a “second-level” association that handles matters affecting the entire development, while the “first-level” associations handle matters affecting their particular portions of the project.

maturity: The date on which the principal balance of a loan, bond or other financial instrument becomes due and payable.

maximum financing: A mortgage amount that is within 5 percent of the highest loan-to-value (LTV) percentage allowed for a specific product. Thus, maximum financing on a fixed-rate mortgage would be 90 percent or higher, because 95 percent is the maximum allowable LTV percentage for that product.

merged credit report: A credit report that contains information from three credit repositories. When the report is created, the information is compared for duplicate entries. Any duplicates are combined to provide a summary of a your credit.

modification: The act of changing any of the terms of the mortgage.

money market account: A savings account that provides bank depositors with many of the advantages of a money market fund. Certain regulatory restrictions apply to the withdrawal of funds from a money market account.

money market fund: A mutual fund that allows individuals to participate in managed investments in short-term debt securities, such as certificates of deposit and Treasury bills.

monthly fixed installment: That portion of the total monthly payment that is applied toward principal and interest. When a mortgage negatively amortizes, the monthly fixed installment does not include any amount for principal reduction.

monthly payment mortgage: A mortgage that requires payments to reduce the debt once a month.

mortgage: A legal document that pledges a property to the lender as security for payment of a debt.

mortgage banker: A company that originates mortgages exclusively for resale in the secondary mortgage market.

mortgage broker: An individual or company that brings borrowers and lenders together for the purpose of loan origination. Mortgage brokers typically require a fee or a commission for their services.

mortgagee: The lender in a mortgage agreement.

mortgage insurance: A contract that insures the lender against loss caused by a mortgagor’s default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan. See private mortgage insurance.

mortgage insurance premium (MIP): The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

mortgage life insurance: A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the principal balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds.

mortgagor: The borrower in a mortgage agreement.

multidwelling units: Properties that provide separate housing units for more than one family, although they secure only a single mortgage.

multifamily mortgage: A residential mortgage on a dwelling that is designed to house more than four families, such as a high-rise apartment complex.

multifamily properties: Fannie Mae provides financing for multifamily (buildings with five or more units) rental properties through a nationwide network of mortgage lenders.

N

negative amortization: A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to cover the entire principal and interest due. The amount of the shortfall is added to the remaining balance to create “negative” amortization.

net cash flow: The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes and insurance (PITI) for the mortgage, homeowners’ association dues, leasehold payments and subordinate financing payments.

net worth: The value of all of a person’s assets, including cash, minus all liabilities.

no cash-out refinance: A refinance transaction in which the new mortgage amount is limited to the sum of the remaining balance of the existing first mortgage, closing costs (including prepaid items), points, the amount required to satisfy any mortgage liens that are more than one year old (if the borrower chooses to satisfy them) and other funds for the borrower’s use (as long as the amount does not exceed 1 percent of the principal amount of the new mortgage).

nonliquid asset: An asset that cannot easily be converted into cash.

note: A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

note rate: The interest rate stated on a mortgage note.

notice of default: A formal written notice to a borrower that a default has occurred and that legal action may be taken.

O

original principal balance: The total amount of principal owed on a mortgage before any payments are made.

origination fee: A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.

owner financing: A property purchase transaction in which the property seller provides all or part of the financing.

P

partial payment: A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.

payment change date: The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate
mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date.

periodic payment cap: For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease during any one adjustment period.

periodic rate cap: For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.

personal property: Any property that is not real property.

PITI: See principal, interest, taxes and insurance (PITI) below.

PITI reserves: A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

planned unit development: See PUD below.

point: A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.

power of attorney: A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited
to certain acts and/or certain periods of time.

prearranged refinancing agreement: A formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms (such as a reduction in the costs) for a future refinancing of a mortgage being originated as an inducement for the borrower to enter into the original mortgage transaction.

preforeclosure sale: A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.

prepayment: Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner’s decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.

prepayment penalty: A fee that may be charged to a borrower who pays off a loan before it is due.

pre-qualification: The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan.

prime rate: The interest rate that banks charge to their preferred customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.

principal: The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

More principal balance: The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

principal, interest, taxes and insurance (PITI): The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.

private mortgage insurance (MI): Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.

promissory note: A written promise to repay a specified amount over a specified period of time.

public auction: A meeting in an announced public location to sell property to repay a mortgage that is in default.

PUD (Planned Unit Development): A project or subdivision that includes common property that is owned and maintained by a homeowners’ association for the benefit and use of the individual PUD unit owners.

purchase and sale agreement: A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

purchase money transaction: The acquisition of property through the payment of money or its equivalent.

Q

qualifying ratios: Calculations that are used in determining whether a borrower can qualify for a mortgage. They consist of two separate calculations: a housing expense as a percent of income ratio and total debt obligations as a percent of income ratio.

quitclaim deed: A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

R

radon: A radioactive gas found in some homes that in sufficient concentrations can cause health problems.

rate-improvement mortgage: A fixed-rate mortgage that includes a provision that gives the borrower a one-time option to reduce the interest rate (without refinancing) during the early years of the mortgage term.

rate lock: A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time. See lock-in.

real estate agent: A person licensed to negotiate and transact the sale of real estate on behalf of the property owner.

Real Estate Settlement Procedures Act (RESPA): A consumer protection law that requires lenders to give borrowers advance notice of closing costs.

real property: Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals and the interest, benefits and inherent rights thereof.

REALTOR®: A real estate broker or an associate who holds active membership in a local real estate board that is affiliated with the NATIONAL ASSOCIATION of REALTORS®.

recission: The cancellation or annulment of a transaction or contract by the operation of a law or by mutual consent. Borrowers usually have the option to cancel a refinance transaction within three business days after it has closed.

recorder: The public official who keeps records of transactions that affect real property in the area. Sometimes known as a “Registrar of Deeds” or “County Clerk.”

recording: The noting in the registrar?s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage or an extension of mortgage, thereby making it a part of the public record.

refinance transaction: The process of paying off one loan with the proceeds from a new loan using the same property as security.

rehabilitation mortgage: A mortgage created to cover the costs of repairing, improving and sometimes acquiring an existing property.

remaining balance: The amount of principal that has not yet been repaid. See principal balance.

remaining term: The original amortization term minus the number of payments that have been applied.

rent loss insurance: Insurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.

rent with option to buy: See lease-purchase mortgage loan.

repayment plan: An arrangement made to repay delinquent installments or advances. Lenders’ formal repayment plans are called “relief provisions.”

replacement reserve fund: A fund set aside for replacement of common property in a condominium, PUD, or cooperative project — particularly that which has a short life expectancy, such as carpeting, furniture, etc.

revolving liability: A credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.

right of first refusal: A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.

right of ingress or egress: The right to enter or leave designated premises.

right of survivorship: In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.

Rural Housing Service (RHS): An agency within the Department of Agriculture, which operates principally under the Consolidated Farm and Rural Development Act of 1921 and Title V of the Housing Act of 1949. This agency provides financing to farmers and other qualified borrowers buying property in rural areas who are unable to obtain loans elsewhere. Funds are borrowed from the U.S. Treasury.

S

sale-leaseback: A technique in which a seller deeds property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.

second mortgage: A mortgage that has a lien position subordinate to the first mortgage.

secondary mortgage market: The buying and selling of existing mortgages.

secured loan: A loan that is backed by collateral.

security: The property that will be pledged as collateral for a loan.

seller take-back: An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage. See owner financing.

servicer: An organization that collects principal and interest payments from borrowers and manages borrowers? escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.

servicing: The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.

settlement: See closing.

settlement sheet: See HUD-1 statement.

single-family properties: One- to four-unit properties including detached homes, townhomes, condominiums and cooperatives.

special deposit account: An account that is established for rehabilitation mortgages to hold the funds needed for the rehabilitation work so they can be disbursed from time to time as particular portions of the work are completed.

standard payment calculation: The method used to determine the monthly payment required to repay the remaining balance of a mortgage in substantially equal installments over the remaining term of the mortgage at the current interest rate.

step-rate mortgage: A mortgage that allows for the interest rate to increase according to a specified schedule (i.e., seven years), resulting in increased payments as well. At the end of the specified period, the rate and payments will remain constant for the remainder of the loan.

subdivision: A housing development that is created by dividing a tract of land into individual lots for sale or lease.

subordinate financing: Any mortgage or other lien that has a priority that is lower than that of the first mortgage.

subsidized second mortgage: An alternative financing option known as the Community Seconds® mortgage for low- and moderate-income households. An investor purchases a first mortgage that has a subsidized second mortgage behind it. The second mortgage may be issued by a state, county, or local housing agency, foundation,
or nonprofit corporation. Payment on the second mortgage is often deferred and carries a very low interest rate (or no interest rate). Part of the debt may be forgiven incrementally for each year the buyer remains in the home.

survey: A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments and other physical features.

sweat equity: Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.

T

tenancy by the entirety: A type of joint tenancy of property that provides right of survivorship and is available only to a husband and wife. Contrast with tenancy in common.

tenancy in common: A type of joint tenancy in a property without right of survivorship. Contrast with tenancy by the entirety and with joint tenancy.

tenant-stockholder: The obligee for a cooperative share loan, who is both a stockholder in a cooperative corporation and a tenant of the unit under a proprietary lease or occupancy agreement.

third-party origination: A rocess by which a lender uses another party to completely or partially originate, process, underwrite, close, fund or package the mortgages it plans to deliver to the secondary mortgage market. See mortgage broker.

title: A legal document evidencing a person’s right to or ownership of a property.

title company: A company that specializes in examining and insuring titles to real estate.

title insurance: Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss arising from disputes over ownership of a property.

title search: A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.

total expense ratio: Total obligations as a percentage of gross monthly income. The total expense ratio includes monthly housing expenses plus other monthly debts.

trade equity: Equity that results from a property purchaser giving his or her existing property (or an asset other than real estate) as trade as all or part of the down payment for the property that is being purchased.

transfer of ownership: Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property “subject to” the mortgage, the assumption of the mortgage debt by the property purchaser and any exchange of possession of the property under a land sales contract or any other land trust device. In cases in which an inter vivos revocable trust is the borrower, lenders also consider any transfer of a beneficial interest in the trust to be a transfer of ownership.

transfer tax: State or local tax payable when title passes from one owner to another.

Treasury index: An index that is used to determine interest rate changes for certain adjustable-rate mortgage (ARM) plans. It is based on the results of auctions that the U.S. Treasury holds for its Treasury bills and securities or is derived from the U.S. Treasury’s daily yield curve, which is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. See adjustable-rate mortgage (ARM).

Truth-in-Lending: A federal law that requires lenders to fully disclose, in writing, the terms and conditions of a mortgage, including the annual percentage
rate (APR) and other charges.

two-step mortgage: An adjustable-rate mortgage (ARM) that has one interest rate for the first five or seven years of its mortgage term and a different interest rate for the remainder of the amortization term.

two- to four-family property: A property that consists of a structure that provides living space (dwelling units) for two to four families, although ownership
of the structure is evidenced by a single deed.

trustee: A fiduciary who holds or controls property for the benefit of another.

U

underwriting: The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower’s creditworthiness and the quality of the property itself.

unsecured loan: A loan that is not backed by collateral.

V

VA mortgage: A mortgage that is guaranteed by the Department of Veterans Affairs (VA). Also known as a government mortgage.

vested: Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.

Department of Veterans Affairs (VA): An agency of the federal government that guarantees residential mortgages made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make mortgages to veterans.

W

what-if analysis: An affordability analysis that is based on a what-if scenario. A what-if analysis is useful if you do not have complete data or if you want to explore the effect of various changes to your income, liabilities, or available funds or to the qualifying ratios or down payment expenses that are used in the analysis.

what-if scenario: A change in the amounts that is used as the basis of an affordability analysis. A what-if scenario can include changes to monthly income, debts, or down payment funds or to the qualifying ratios or down payment expenses that are used in the analysis. You can use a what-if scenario to explore different ways to improve your ability to afford a house.

wraparound mortgage: A mortgage that includes the remaining balance on an existing first mortgage plus an additional amount requested by the mortgagor. Full payments on both mortgages are made to the wraparound mortgagee, who then forwards the payments on the first mortgage to the first mortgagee.

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WELCOME TO GSCBOR

May 23, 2011 7:54 pm
posted by admin

Home ownership is truly the American dream. In the Gloucester and Salem Counties areas, we have an enviable combination of a rural serenity, small-town charm and liveable city life, combined with some of the most affordable housing costs in the nation. Set in the southwest section of New Jersey, we are rich in agriculture and possess large industries that employ thousands of our residents.

The Garden Spot of the “Garden State” our counties are dotted with farm land, beautiful lakes, woods, fine residential communities, exceptional schools and places of worship. A combination of ideal location and easy access to major cities, airports,hospitals,colleges and universities, makes Gloucester and Salem Counties a mecca for happy, healthy living.

From our humble beginning, the Gloucester Salem Counties Board of REALTORS® has been involved in providing buyers and sellers with ethical, knowledgeable and competent agents.  Only real estate licensees who are members of the National Association of REALTORS®, are properly called REALTORS®.REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge.GSCBOR® members proudly display the REALTOR “®” logo.

This website, in part, is designed to provide our REALTOR® members with the tools and information needed in today’s market, as well as help educate the consumer with buying and selling resources.  For all of your real estate dealings, be sure to look for a professional…

******

Why Use a REALTOR®?

May 20, 2011 3:58 pm
posted by admin

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR “®” logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

But if you’re still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:

1. Your REALTOR® can help you determine your buying power — that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders — banks and mortgage companies — offer limited choices.

2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.

3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you’ll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.

7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.

8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

11. Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

All real estate licensees are not the same. Only real estate licensees who are members of the National Association of REALTORS® are propertly called REALTORS®. They proudly display the REALTOR® logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that almost 85 percent of home buyers would use the same REALTOR® again.

You be the judge
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

WHY DID YOU BECOME A MEMBER?

3:51 pm
posted by admin

 

  • Affinity Programs
  • Awards & Recognition
  • Code of Ethics
  • Committee Involvement
  • Community Services
  • Conventions and Tradeshows
  • Educational Forums & Workshops
  • Free On-Line Forms
  • Group Insurance Programs
  • Information Source
  • Legislative Support & Representation
  • Membership Forums
  • Membership Service Center Store
  • National, State & Local Publications
  • Networking Opportunities
  • Orientation Program for New members
  • REALTOR® Trademark
  • Regional Multiple Listing Service
  • Social Affairs & Events
  • Weekly News Topics and Bulletins

PATHWAYS TO PROFESSIONALISM

2:37 pm
posted by admin

 

Respect for the Public:

 
1. Always follow the “Golden Rule.”
2. Always respond promptly to inquires and requests for information
3. Schedule appointments as far in advance as possible; call if you are delayed or must cancel anappointment
4. Always schedule property showings in advance.
5. If a prospective buyer decides not to view an occupied home, promptly explain the situation to thelisting broker or the owner.
6. Communicate with all parties in a timely fashion.
7. Enter listing property first to ensure that unexpected situations, such as pets, are handled appropriately.
8. Leave your business card if not prohibited by local rules.
9. Never criticize property in the presence of the owner.
10. Inform sellers that you are leaving after a showing.
11. When showing an occupied home, always ring the doorbell or knock before entering. Knock beforeentering any room.
12. Present a professional appearance at all times; dress appropriately and have a clean car.
13. If the seller is home during a showing, ask their permission before using the telephone or bathroom.
14. Advise the clients of other brokers to direct questions to their agent or representative.
15. Communicate clearly; do not use jargon not readily understood by the general public.
16. Be aware of and respect cultural differences.
17. Show courtesy and respect to the general public.
18. Be aware of and meet all deadlines.
19. Promise only what you can deliver and keep your promises.
 
 

Respect for Property:

 
1. Be responsible for visitors to listed property; never allow buyers to enter property if unaccompanied.
2. When the seller is absent, be sure to turn off the lights, shut windows, and lock doors after a showing.
3. Tell buyers not to smoke in listed property.
4. Use sidewalks; if weather is bad, take off shoes and boots inside the property.
5. When a property is vacant, check that heating and cooling controls are set correctly and check theoutside of the property for damage or vandalism.
 
 

Respect of Peers:

 
1. Call the listing broker to report the results of any showing.
2. Notify the listing broker immediately if anything appears wrong with the property.
3. Notify the listing broker if there appears to be inaccurate information on the listing.
4. Share important information about a property, including the presence of pets; security systems; andwhether sellers will be present during the showing.
5. Show courtesy, trust, and respect to other real estate professionals.

REALTOR® FAMILY DESIGNATION PROGRAMS

1:26 pm
posted by admin


The NATIONAL ASSOCIATION OF REALTORS® and its affiliated Institutes, Societies, and Councils provide a wide-range of programs and services that assist members in increasing skills, proficiency, and knowledge. Designations and certifications acknowledging experience and expertise in various real estate sectors are awarded by NAR and each affiliated group upon completion of required courses.

 

Accredited Buyer’s Representative / ABR®

ABR® education provides REALTORS® with what they need to stay competitive in today’s market. Member benefits such as marketing tools, a referral network and other resources, help to promote their business. Courses for the designation are available both in person and online.

Presented by REBAC (Real Estate Buyer’s Agent Council)
Contact REBAC at rebac@realtors.org, 800/648-6224, or visit www.rebac.net.

 

Accredited Buyer’s Representative Manager / ABRMsm

The ABRMsm real estate broker course was developed for managers, brokers and owners who wish to better incorporate buyer representation into their company’s service offerings. Designees have taken and passed both the ABR® and ABRMsm course and provided documentation of past management experience. Courses for the designation are available both in person and online.

Presented by REBAC (Real Estate Buyer’s Agent Council)
Contact REBAC at rebac@realtors.org, 800/648-6224, or visit www.rebac.net.

 

Accredited Land Consultant / ALCsm

The REALTORS® Land Institute serves a unique constituency in the real estate industry -– those who broker, lease, sell, develop, and manage land assets, including vacant, transitional land; agricultural and pastureland; timberland; and ranch and recreational properties. Through its rigorous Land University curriculum, the REALTORS® Land Institute confers its Accredited Land Consultant (ALCsm) designation to only those real estate practitioners who achieve the highest level of education, experience, and professionalism.

Presented by the REALTORS® Land Institute (RLI)
Contact RLI at RLI@realtors.org, 800/441-5263, or visit www.RLILand.com.

 

Certified Commercial Investment Member / CCIMsm

CCIMs are recognized experts in commercial real estate brokerage, leasing, valuation and investment analysis. The CCIM business network includes more than 7,500 designees and an equal number of candidates principally in North America, but also in Asia and Europe. CCIMs are backed by a respected education program, as well as superior technology products and business resources.

Presented by the CCIM Institute
Contact CCIM at 800/621-7027, or visit www.ccim.com.

 

Certified International Property Specialist / CIPS®

The Certified International Property Specialist Network (CIPS Network) comprises 2,500 real estate professionals from 50 countries and is the specialty membership group for global business practitioners of the National Association of REALTORS®. The CIPS® designation prepares REALTORS® to service the growing international market in their local community by focusing on culture, exchange rates, investment trends, and legal issues.

Presented by the NATIONAL ASSOCIATION OF REALTORS®
Contact Information Central at NAR International, 800/874-6500, ext. 8369, or visit CIPS Education .

 

Certified Property Manager / CPM®

Acquire valuable real estate management skills through educational offerings leading to the CPM® designation. CPM® Members have the competitive edge in every area of real estate management from residential to commercial to industrial.

Presented by Institute of Real Estate Management (IREM)
Contact IREM® Customer Relations at 800/837-0706, ext. 4650, or visit www.irem.org.

 

Certified Real Estate Brokerage Manager / CRBsm

The Certified Real Estate Brokerage Manager (CRBsm) is one of the most respected and relevant designations offered in real estate business management. The CRBsm designation is awarded to REALTORS® who have completed advanced educational and professional requirements. CRBsm Designees are better positioned to streamline operations, integrate new technology and apply new trends and business strategies. Join today and discover a new approach to enhancing knowledge and leveraging opportunity. CRB Courses are offered in a classroom setting or online in the Council’s e-Learning Center.

Presented by Council of Real Estate Brokerage Managers
For more information, e-mail info@crb.com, call 800/621-8738, or visit www.CRB.com.

 

Certified Residential Specialist® / CRS®

Agents can maximize their potential by earning the CRS® Designation and joining the organization that has served top-producing residential sales agents since 1977. The more than 35,000 CRS® Designees benefit from nationwide referral opportunities, a professional image that attracts customers, and sales and marketing support. The CRS® Designation is awarded to experienced REALTORS® who complete advanced training in listing and selling, and meet rigorous production requirements.

Presented by Council of Residential Specialists
Contact Customer Service by e-mail at CRS Help, call 800/462-8841, or visit www.crs.com.

 

Counselor of Real Estate / CRE®

The Counselor of Real Estate – or CRE – is a member of The Counselors of Real Estate, an international group of recognized professionals who provide seasoned, objective advice on real property and land-related matters. Only 1,100 practitioners throughout the world carry the CRE® designation. Membership is by invitation only.

Presented by The Counselors of Real Estate
Contact CRE® at 312/329-8427, or visit www.cre.org.

 

General Accredited Appraiser, GAAsm

Certified general appraisers wishing to increase their visibility should consider pursuing the GAAsm designation. The GAAsm designation is awarded to appraisers whose education and experience exceed state appraisal certification requirements and is supported by the NATIONAL ASSOCIATION OF REALTORS®.

Presented by NATIONAL ASSOCIATION OF REALTORS®
Call 800/874-6500 ext. 8268, or visit Appraisal Designation Programs.

 

NAR’s Green Designation / GREEN

The National Association of REALTORS® created NAR’s Green Designation to provide ongoing education, resources and tools so that real estate practitioners can successfully seek out, understand, and market properties with green features.  The course curriculum requires completion of a 12hr Core Course and a 6hr Elective Course in either residential, commercial, or property management.  All courses are available in live lecture and online formats.  NAR’s Green Designation gives designees the tools to become a community leader and resource in sustainable issues.

Presented by The Green REsource Council
Established by the National Association of REALTORS® (NAR), the Green REsource Council serves real estate professionals by providing comprehensive training and access to cutting-edge resources and tools as well as promoting green excellence, leadership, and consumer awareness within and across multiple real estate disciplines. Practitioners who complete the 3-day program are awarded NAR’s Green Designation, the only green training program recognized by the NAR. For information on the Green Designation, e-mail greendesignation@realtors.org, call 800/498-9422, or visit www.GreenREsourceCouncil.org.

 

Graduate REALTOR® Institute / GRIsm

Members involved in residential real estate who want a solid base of information for their practice will want to participate in the REALTOR® Institute program and earn the GRIsm designation.

Presented by NATIONAL ASSOCIATION OF REALTORS®
Contact your State REALTOR® Association for course dates and locations.
NAR maintains a clearinghouse of information for individuals interested in the GRIsm program. For more information call 800/874-6500 ext. 8215.

 

Performance Management Network / PMN

The Performance Management Network (PMNsm) is a new REALTOR® designation that’s built from the ground up to bring you the real-world skills, the know-how and the tools that will keep your business out front and on top of a lighting-fast market. This designation is unique to the REALTOR® family designations, focusing on the idea that in order to enhance your business, you must enhance yourself. The curriculum is driven by the following topics: negotiating strategies and tactics, networking and referrals, business planning & systems, personal performance management and cultural differences in buying and selling.

Presented by Women’s Council of REALTORS®
Contact the WCR at Education Department, 800/245-8512, or visit the WCR Web site.

 

REALTOR® association Certified Executive / RCE

Association executives interested in demonstrating commitment to the field of REALTOR® association management should pursue the RCEsm designation. AEs are recognized for their specialized industry knowledge and their association achievements and experience.

Presented by NATIONAL ASSOCIATION OF REALTORS®
Contact Renee Holland, 312/329-8545. More information can be found at the Association Executives Homepage.

 

Residential Accredited Appraiser / RAAsm

Certified residential appraisers wishing to increase their visibility should consider pursuing the RAAsm designation. The RAAsm designation is awarded to appraisers whose education and experience exceed state appraisal certification requirements and is supported by the NATIONAL ASSOCIATION OF REALTORS®.

Presented by NATIONAL ASSOCIATION OF REALTORS®
Call 800/874-6500, ext. 8268, or visit the Appraisal Designation Programs Web site.

 

Seniors Real Estate Specialist, SRES®

The SRES® Designation program educates REALTORS® to profitably and ethically serve the real estate needs of the fastest growing market in real estate, clients age 50+. By earning the SRES designation you gain access to valuable member benefits, useful resources, and networking opportunities across North America and Canada to help you in your business.

Presented by SRES Council
Call 800/500-4564 or visit www.seniorsrealestate.com.

 

Society of Industrial and Office REALTORS® / SIOR®

Individuals certified with the SIOR® designation are top producers in industrial and office real estate brokerage. SIOR’s network includes more than 2,800 members in 480 cities in 20 countries on six continents. The Society’s mandatory re-certification requirement assures clients of the designee’s excellence in the fast changing commercial brokerage field.

Presented by Society of Industrial and Office REALTORS®
Contact Membership at 202/449-8200 or visit www.sior.com.

 

NAR Family Certifications


At Home With Diversity / AHWD®

A ground-breaking professional education initiative designed to provide America’s real estate professionals with training and tools to expand their business as well as home ownership opportunities for more Americans. AHWD certification relays to the public that those certified have been professionally trained in and are sensitive to a wide range of cultural issues inviting a wider volume of business from a greater variety of cultures.

Presented by NATIONAL ASSOCIATION OF REALTORS®
For more information on this course and its business principles, please contact Diversity, 800/874-6500 ext. 8393, or visit At Home With Diversity.

 

e-PRO®

e-PRO® is a revolutionary training program presented entirely online to certify real estate agents and brokers as Internet Professionals. The NATIONAL ASSOCIATION OF REALTORS® is the first major trade group to offer certification for online professionalism. e-PRO® is not just about technology – it’s about how you can leverage your most powerful asset, your people-skills, into doing more business on the Internet.
e-PRO® gives you:

  • Exhaustive Internet Training
  • Unique Competitive Advantage
  • Professional Distinction
  • CE credit is now available in several states

Presented by NATIONAL ASSOCIATION OF REALTORS®
For more information on the e-PRO® certification, call 800/874-6500 ext. 8543 or visit www.eProNAR.com.

 

Real Estate Professional Assistantsm / REPAsm

REPA is a comprehensive two-day certificate course that provides an intensive introduction to the real estate business and to the specific ways support staff can become valuable assets to their employers. Every administrative employee in the brokerage office, from listing secretary to the personal assistant, will benefit tremendously from this quick-start program.

Presented by NATIONAL ASSOCIATION OF REALTORS®
For more information, visit the Real Estate Professional Assistant Web site.

 

Resort & Second-Home Property Specialist / RSPS

RSPS certification is offered by NAR Resort for resort and second-home professionals around the world. REALTORS® specializing in resort and second-home markets and interested in demonstrating their knowledge and expertise should pursue the RSPS certification. The RSPS core certification requirement includes the NAR Resort & Second-Home Market Course. RSPS applicants will also choose from twenty three different elective choices including courses from the NAR Education Matrix and the NAR Resort Symposium held every 18 months.

Presented by NATIONAL ASSOCIATION OF REALTORS®
For more information, call NAR Resort 312/329-8393 or visit the NAR Resort Web site.

 

Short Sales and Foreclosures Resource / SFR

REALTORS® with the SFR certification can be a trusted resource for short sales and foreclosures. Your ability to close short sales and foreclosures depends in part on your confidence in seeing these transactions through. Begin building your confidence today with SFR!

Presented by NATIONAL ASSOCIATION OF REALTORS®
For more information e-mail SFR@realtors.org, call 877/510-7855, or visit www.realtorSFR.org .

 

Transnational Referral Certification

The goal of this certification offered by the International Consortium of Real Estate Associations (ICREA) is to prepare real estate professionals to make and receive compensated referrals using the Transnational Referral system developed by the International Consortium of Real Estate Associations (ICREA). Students will learn how to integrate international referrals, resulting in increased income, into their business plans. When you are involved in an international referral, as a referring or receiving agent, the Transnational Referral Certification demonstrates to other real estate professionals that you are well versed in the procedures of the Transnational Referral system, have pledged to follow a code of conduct in business dealings, and expect that compensation, paid in a timely manner, will be an integral part of the transaction.

Presented by International Consortium of Real Estate Associations (ICREA)
For more information visit Transnational Referral Certification.

The NATIONAL ASSOCIATION OF REALTORS® and its affiliated Institutes, Societies, and Councils provide a wide-range of programs and services that assist members in increasing skills, proficiency, and knowledge. Designations and certifications acknowledging experience and expertise in various real estate sectors are awarded by NAR and each affiliated group upon completion of required courses.

 

 


Originated in 1942
1943   Willaim R. Storrie*
1944   Edward J. Crist*
1945   Ada E. Wilkins *
1946   Clift A. Green *
1947   Robert C. Shunk*
1948   P. Mason Fox *
1949   Harry D. Uhl*
1950   Lawrence J. Darms*
1951   J. Graham Chesney*
1952   Pearl Budd Coy *
1953   Samuel D. Crist *
1954   Elizabeth H. Worthington *
1955   Samuel H. Carver*
1956   James B. Filer*
1957   Norton D. Worthington
1958   J. Sennett Holston *
1959   William DeLaney *
1960   Bernard Horwitz*
1961   Jack B. Green
1962   Vincent B. Faust*
1963   Charles W. Abel
1964   George E. Koelmel
1956   John D. Darms *
1966   Jack B. Green *
1967   George Kunkle *
1968   William DeLaney*
1969   Eugene W. Thies *
1970   Gertrude V. Pedrick
1971   George E. Koelmel
1972   John J. McCue *
1973   James R. Maquire
1974   John Stewart, Jr.
1975   Ralph N. Cettei *
1976   Richard J. Spurlin
1977   Doris M. Davis
1978   Harry Wohlfarth
1979   John Gliglor
1980   Dena Green Kimmerley
1981   Albert H. Quick *
1982-1983   Rita T. Knowles *
1984   Phyllis J. Gillinger
1985   Stephen C. Drummond
1986   Donald J. Brogan
1987   Elizabeth Meihofer
1988   Leonard Bukenas
1989   Nell E. Woulfe
1990   Carl Haaf *
1991   Richard J. Zammer *
1992   Marilyn L. Snyder
1993   Roscoe Weygand
1994   Nell E. Woulfe
1995   Rick Zammer *
1996-1997   Lydia Spinsoi
1998-1999   Jim Sullivan
2000-2001   Joseph Rauh
2002   Clarence White *
2003   Clarence White*/Joseph Perpetuino
2004   Joseph Perpetuino
2005-2006   Thomas Duffy
2007-2009   Peter Muracco
2010-2011   Joseph Marotta
2012-2013  Pamela Kotter
2014-2015   Jeffery V. Tessing

2016-2017   Dee Wood

 
*Deceased

The mission of the Gloucester/Salem Counties Board of REALTORS is:

  • To serve its members by providing and promoting education and information that will enhance its member’s ability to conduct business.
  • Act as a conduit to the New Jersey Association of REALTORS and the National Association of REALTORS.
  • Promote the preservation of the right to own, use and transfer real property while upholding the REALTOR Code of Ethics.