GENERAL FACTS
- A REALTOR™ is a licensed real estate agent and a member of the National Association of Realtors, a real estate trade association. REALTORS™ also belong to their state and location association of Realtors. They have an abundance of resources at their fingertips, including the Multiple Listings Service. All association members agree to abide by the Code of Ethics.
- A Real Estate Agent is licensed by the state to represent parties in the transfer of property. Every REALTOR™ is a real estate agent, but not every real estate agent is a REALTOR™.
- Agents working with Buyers have three possible choices: They can represent the Buyer exclusively, called ‘single agency;’ represent the Seller exclusively, called ‘sub-agency;’ or represent both the Buyer and Seller in a ‘dual agency’ situation.
- Sub-agency: Traditionally, real estate agents and brokers have a fiduciary relationship to the Seller. The Seller pays the commission of both brokers, not just the one who lists and shows the property, but also to the sub-broker, who brings the Buyer to the table.
- Dual agency: When two agents work for the same broker represent the Buyer and Seller in a transaction. A potential conflict of interest is created if the listing agent has advance knowledge of another Buyer’s offer. Therefore, the law states that a dual agent shall not disclose to the Buyer that the Seller will accept less than the list price, or disclose to the Seller that the Buyer will pay more than the offer price, without express permission.
- Single agency: A Buyer can hire his or her own agent who will represent the Buyer’s interests exclusively. A Buyer’s agent usually must be paid out of the Buyer’s own pocket, but the Buyer can trust them with financial information, knowing it will not be transmitted to the other broker and ultimately to the Seller
- The list price of a home is how much a house is advertised for and is usually only an estimate of what a seller would like to get for the property. The sales price is the amount a property actually sells for. The appraisal value is a certified appraiser’s estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors. The competitive market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes.
- An Escrow is a process wherein the Buyer and Seller deposit written instructions, documents, and funds with a neutral party until certain conditions are fulfilled. In a real estate transaction, the Buyer does not pay the Seller directly for the property. The Buyer gives the funds to an escrow company who, acting as an intermediary, verifies that title to the property is clear and all written instructions in the contract have been met. Then, the company transfers the ownership of the property to the Buyer through recordation and pays the Seller. This process protects all parties involved. In Nevada, escrow services are generally provided by the title insurance company instead of an attorney. The ‘One Stop For Las Vegas Homes’ team can recommend a number of stable and reliable title insurance companies, who will protect the interests of all parties to the transaction.
- Assume.fin. = assumable financing
- Dk – deck
- Gar – garage
- Expansion pot’l – may be extra space on the lot, or possibly vertical potential for a top floor or room addition.
- Fab pentrm – fabulous pentroom, a room on top, underneath the roof, that sometimes has views
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- Frplc, fplc, FP – fireplace
- HDW, HWF, Hdwd – hardwood floors
- In-law potential – potential for a separate apartment
- Upr – upper floor
- Vw, vu, vws, vus – view(s)
Source: ‘Real Estate’s Ambiguous Language You Oughtta Understand,’ Glennon H. Neubauer, Ethos Group Publishing, Diamond Bar, CA; 1993
Important Resources:FAST FACTS FOR BUYERS
- Your Realtor has thousands of homes to choose from through the Multiple Listing Services (MLS).
- If you consider a ‘For Sale By Owner,’ take your Realtor along to help negotiate the contract. The owner may not only agree to your terms, but also agree to pay the agent’s commission.
- The Realtor who helps you buy a home is traditionally paid by the seller (See General Facts above). The Buyer generally pays for:
- Lender’s title policy premium (if a new loan)
- Escrow fee, one half (except Seller pays on all VA loan)
- Document preparation fee, if applicable
- Notary fees, if applicable
- Recording charges for all documents in Buyer’s names
- Two months Homeowner’s Association Dues
- All new loan charges (except those lenders that require Seller to pay)
- Interest on new loan from date of funding to 30 days prior to first payment date
- Assumption/Change of records fees to take over existing loan, if applicable
- Beneficiary statement fee for assumption of existing loan
- Hazard Insurance premium for first year
- All prepaid items, such as interest, or funds for an escrow account
- Courier fees, if applicable
- Professional Home Inspection – when a paid professional inspector inspects the home, searching for defects or other problems in the home. They usually represent the Buyer. The inspection usually takes place after a purchase contract between the Buyer and Seller has been signed.
- For more information on closing costs, ask for the ‘Consumer’s Guide to Mortgage Settlement Costs,’ Federal Reserve Bank of San Francisco, Public Information Department, P.O. Box 7702, San Francisco, CA 94120 or call (415) 974-2163.
- Disclosures laws vary by state, but in some states, the law requires the Seller to complete a real estate transfer disclosure statement. Here is a summary of the things you could expect to see in a disclosure form:
- A range, oven, microwave, dishwasher, garbage disposal, trash compactor; Safety features, such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom; TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump; Pool or spa, patio or deck, built-in barbeque and fireplaces; Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels; Type of water heater, water supply, sewer system or septic tank.
- Sellers are also required to indicate any significant defects or malfunctions existing in the home’s major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems.
- The form also ask Sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property. It’s also important to find out about settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.
- People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions.
- The home inspection and home warranty industries have grown significantly to accommodate increased demand from cautious buyers. Be sure to ask questions about anything that remains unclear or does not seem to be properly addressed by the forms provided to you.
- The purchase contract must include the Seller’s responsibilities, including passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
Source: LandTitle of Nevada, Inc., 702-474-3300
- Most purchase offers include two standard contingencies: a financing contingency, which makes the sale dependent on the Buyer’s ability to obtain a loan commitment from a lender, and an inspection contingency, which allows the Buyer to have professionals inspect the property to their satisfaction.
- As a Buyer, you could forfeit your deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract.
- The following home-buying costs are deductible:
- Points you pay to purchase your home loan are deductible for that year
- Property taxes and interest are deductible every year.
- Other home-buying costs are not immediately tax deductible. However, they can be figured into the adjusted cost basis of your home when you go to sell (any significant home improvements can also be calculated into your basis). These fees include title insurance, loan-application fee, credit report, appraisal fee, settlement or closing fees, bank attorney’s fee, attorney’s fee, document preparation fee and recording fees.
Source: ‘Tax Information for First-Time Homeowners,’ IRS Publication 530 and ‘Selling Your Home,’ IRS Publication 523. Call 1-800- TAX-FORM to order.
FAST FACTS ABOUT CREDIT SCORES
- You have three credit scores, one from each of the three major credit bureaus.
- You can check your own score as many times as you want without impacting your score, but make sure you do so via the bureaus or a legitimate score seller like MyFICO.com .
- Your employment, your net worth, and your income are not factored into your score.
- Paying off debts will improve your score.
- If there is information in your report that is legitimately inaccurate, you should dispute it. Credit agencies are obligated to investigate credit inaccuracies within 30 days or remove disputed information.
- When you apply for a loan or get pre-approved, the creditor checks your credit report, which shows up as an inquiry to your credit. While it is true that too many inquiries to your credit will lower your score, you can shop around for a mortgage, home equity loan or car loan without worrying about damaging your credit as long as these same types of inquiries are made within 14 days of each other. This grace period does not apply to credit cards.
- Credit card solicitations don’t affect your score – assuming that you don’t respond to the solicitations and use all of the credit that is available to you.
- When you get married, your good or bad credit is yours alone. However, when you open joint accounts, that information will be reflected on each of your credit reports.
- If y our credit score is 580, you are likely to pay nearly three percentage points more in mortgage interest than someone with a credit score of 720. To put it another way, the payments on a $150,000 30-year fixed mortgage would be about $890 if you qualify for the best rate, according to Fair Isaac, the company that created the FICO score. That same loan could cost more than $1,200 a month if your credit is poor.
Source: CNN Money, March 16, 2005.
FAST FACTS FOR SELLERS
- Traditionally, real estate agents and brokers have a fiduciary relationship to the Seller. The Seller pays the commission of both brokers, not just the one who lists and shows the property, but also to the sub-broker, who brings the Buyer to the table.
- Appraisers use several factors when estimating a home’s value, include the home’s size and square footage, the condition of the home and the neighborhood, comparable local sales, any pertinent historical information, sales performance and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 875. N. Michigan Avenue, Suite 2400, Chicago, Il 60611-1980 or call 312-335-4458.
- Disclosures laws vary by state, but in some states, the law requires the Seller to complete a real estate transfer disclosure statement. Here is a summary of the things you could expect to see in a disclosure form:
- A range, oven, microwave, dishwasher, garbage disposal, trash compactor; Safety features, such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom; TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump; Pool or spa, patio or deck, built-in barbeque and fireplaces; Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels; Type of water heater, water supply, sewer system or septic tank.
- Sellers are also required to indicate any significant defects or malfunctions existing in the home’s major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems.
- The form also ask Sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property. It’s also important to find out about settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.
- People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions.
- The purchase contract must include the Seller’s responsibilities, including passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
Source: LandTitle of Nevada, Inc. (702-474-3300)
- The home-buying costs you were not previously able to deduct can be figured into the adjusted cost basis of your home when you go to sell (any significant home improvements can also be calculated into your basis). These fees include title insurance, loan-application fee, credit report, appraisal fee, settlement or closing fees, bank attorney’s fee, attorney’s fee, document preparation fee and recording fees.
Source: ‘Tax Information for First-Time Homeowners,’ IRS Publication 530 and ‘Selling Your Home,’ IRS Publication 523. Call 1-800- TAX-FORM to order.
The ‘One Stop For Las Vegas Homes’ team thanks LandTitle of Nevada, Inc. (702-474-3300) for providing and compiling this important information.
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