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Listed in the order that a HomeBuyer might
encounter the words in the HomeBuying Process; As seen through the
eyes of an EBA ("Exclusive Buyer's Agent):
Choice:
The exercise of one's right and ability to select one option from two or
more
options. No choice is a choice to take
what ever happens!
Agent:
One who is authorized to perform an action or duty for, or in the stead of
another.
Buyer's
Agent: A licensed real estate professional that
practices single agency representation exclusively for the buyer in a
real estate transaction.
Exclusive
or Single
Agency: Where the
principal has the agent in his or her corner working exclusively for the
principal. A truly fiduciary relationship where the agent performs all
responsibilities and duties for the agent's principal with 100% full and
complete Confidentiality, Accountability, Reasonable Care, Loyalty,
Obedience, Advocacy and Due Diligence, keeping the principal fully
informed. Directed by the principal. The Agent experiences zero
conflict of interests and zero dual-agency herein.
Conflict
of interest: (as
in "Agency"); Where an agent must choose between options
that would solely benefit an agent's principle or, try to serve two
masters in the non-fiduciary capacity of dual-agency. Porpoising and
waffling to find an acceptable meeting of the minds. Dual-agents
either work in the "conflict of interest" environment or
"disclaim agency and/or representation" to either party.
Neither party wins! The double-agent does this in order to
reap payment of commission for both selling and buying activities in the
same real estate transaction.
Dual-Agency:
Where the agent (or agent's office) is authorized by both the
seller and the buyer in a transaction, to be a non-fiduciary.
A dual-agent
("double-agent") waffles between seller and buyer trying to
find a middle-ground where each party is persuaded by the dual-agent
that it's a "fair-deal". The dual-agent's goal is to be
paid both sides of the commission -- NOT to work for the best interest
of the buyer!
Economic consideration that many times limits one's lifestyle,
community, size and location of a house to live in; Usually involves the
following aspects of money: down payment, loan/mortgage, monthly
payment(s) determined by ratios of income or assets to expenses.
Commission
("Fee:): That portion of a "full purchase
price" that is designated by a seller, in Its listing agreement, as
the money to be paid to licensed and qualified real estate marketing
professionals to perform agency services for the seller and the buyer.
Any bona fide appraisal performed by a certified appraiser, for
HUD, FHA, VA, FNMA, or conventional lending purposes includes a
brokerage or marketing fee. That
fee is set by negotiations between principals and agents and not by the
government nor any of its agencies, nor by any RealtorŪ association.
Retainer
Fee: A dollar amount paid as good faith money to
secure the contract services of an EBA at the signing of an Exclusive
Buyer Agency Agreement. Such money is usually designated to be
credited toward any commission or fee earned in the transaction defined
in the contract. It is not uncommon for a portion, if not all, of
the retainer fee to be returned to the buyer at close of escrow.
When buyer's agent fees are established by contract, and the agent
receives more than the contract amount at closing, the surplus goes to
the buyer on the HUD-1 Settlement Sheet!
Qualification:
One's ability to pay for a house with one's own funds, or
to generate the funds needed, through meeting lender requirements of
credit, employment or assets held.
House/Home:
A structure, usually situated on land, that provides a specific
location for human shelter, creature comforts, functions and body
benefits. This does not exclude psychological benefits.
Lifestyle:
What and how one lives with respect to environment, habitat,
patterns of behavior, community, comfort level of design, facade and
floor plan of a structure (not always a house); That which compliments
and enhances one's values.
Principal
or Client: The
director and chief performer in a real estate transaction; One who engages the contract
services of, and authorizes an agent to carry out the principal's
decisions.
Parties:
Principals in a real estate transaction (a buyer; a seller).
Contract:
A legally binding written
agreement by and between principals.
Escrow:
A legal entity set up for a specific (usually a one-time) event,
directed by an impartial, licensed escrow officer, whose purpose is: to
accept, hold and disburse funds; and accept, develop, secure signatures
upon, record and deliver documents in accordance with mutually signed
instructions as established by the principals to a transaction.
Escrow
Officer: An impartial, licensed, legally recognized and authorized
natural person who directs an escrow.
Offer
to Buy: A buyer's legally written document stating
price, terms and conditions under which the ready, willing and able
buyer will buy a specific property and close the transaction by a
certain date. If an Offer to Buy is accepted by a seller, as
written, it becomes a legally binding contract.
Counter
Proposal: A seller's legally written response to an
Offer to Buy stating acceptance of the Offer with certain exceptions
stated, under which if accepted by the buyer, a legally binding contract
would exist.
Earnest
Money: An amount of dollars that accompanies a serious
Offer to Buy, that demonstrates sincere intent on the part of the
offeror. Such money is usually applied toward the purchase price
of the property at closing of the escrow. A buyer could loose the
earnest money if the buyer defaults on the contract.
Promissory
Note:
A loan document for an amount of money borrowed by the buyer, usually
evidenced by a "promissory note" bearing the loan amount
needed to complete the purchase price for acquisition of a
property. The down payment and the loan amount together with all
loan closing, escrow, title and one-time non-recurring prepaid costs,
equal the amount of funds needed to "close escrow" and get the
keys to the home. The promissory note is usually secured by a
mortgage or a deed of trust against the subject property. Your
promise to pay.
Deed
of Trust/Mortgage: A security and foreclosure document used to
take back the property that is being pledged as security for the note,
in the event of default on the note. If you don't pay, you can't
stay!
Physical
Inspection: Buyer usually pays for a qualified
home-inspector to make a general inspection of the physical aspects of
the property being purchased. Buyer pays to avoid "conflict
of interest" by allowing the seller to engage and pay for the
inspection. When deficiencies are discovered in the inspection,
proper documentation should pass between the parties resolving such
matters. It is time for negotiations between the parties to get
the deficiencies cured, the price adjusted or get the contract dissolved
and parties restored to their prior state before the offer became a
contract. Inspections are a very common occurrence in most states
today. Most Agents and the FHA insist on inspections being done
during the contingency period in the contract.
Market
Value: Worth expressed in terms of dollars with respect
to a specific property. This is usually done by a bona fide,
certified appraiser. An EBA will determine for the buyer that
amount of dollars that would be the top of the market. Offering
usually starts lower than that amount and skillful negotiations ensue to
a meeting of the minds and opening of escrow with a mutually signed
contract.
Amortization:
A chart or log showing details of paying off the principal and interest
of a loan. Equal monthly payments over a chosen number of years with
periodic principal balances indicated are a standard form.
Close
of Escrow: "Close of escrow" is, signing of
all pertinent documents, payment of all costs incurred and recording of
the title and loan documents.
Possession:
The Keys to the property are usually not delivered to the buyer until
"confirmation of funding" and "confirmation of
recording" have been communicated to the people involved. |
It's a Changing World
Out There 
