Includes HUD-1 Form

Transcription

Includes HUD-1 Form

Homebuyer’s
Guide
s
Include
HUD-1
Form
www.RGSTITLE.com
The Washington, D.C. Metropolitan area’s most trusted name in
residential real estate settlements for over 20 years.
W
hen making a decision as important as purchasing a home, why
not choose a settlement company that is the established leader in
the industry?
• RGS TITLE has received more awards for providing outstanding customer
service than any Washington, D.C. Metropolitan area title company.
• RGS TITLE has settled over 300,000 residential resale transactions.
• RGS TITLE will match any of our competitors’ settlement fees.*
• RGS TITLE has convenient locations throughout Virginia, Maryland, and
the District of Columbia—you choose where you want your settlement
conducted.
• RGS TITLE operates the RGS Title Real Estate Academy—offering your
Realtor® continuing education to help ensure their knowledge is always
“cutting edge”.
• RGS TITLE was the first settlement company to offer area Realtors a
24-hour “hotline”, (877) 660-5150—offering them professional support
around the clock.
• RGS TITLE was the first settlement company to produce a free, comprehensive Homebuyer’s Guide to assist purchasers through the unique real
estate settlement process.
• RGS TITLE was one of the first settlement companies to offer our services
in Spanish. Please ask your local branch for more details.
• RGS TITLE was the first local settlement company to offer Realtors and
clients on-line fee quotes 24 hours a day, seven days a week. Visit our unique
Web site at www.RGSTITLE.com for comprehensive explanations of settlement procedures and the company, educational updates and much more!
• RGS TITLE has set the standard in our industry for over 20 years. Our
award-winning customer service, multiple locations and genuine dedication
to our clients is unequaled. Contact the nearest branch office to experience
the proven professionalism of RGS TITLE LLC.
This booklet was designed to provide a no-nonsense approach to understanding the complications of the home-buying process. We hope it is helpful and urge you to call us with any questions.
*Subject to certain conditions.
A Home Buyer’s Guide
Purchasing a Home—Summary for the Buyer …………………………………………………2
The Home Buying Process (chart) …………………………………………………………4
Resale Contract for Single Family Homes ………………………………………………………5
Sample Contract ………………………………………………………………………………9
MAR Sample Contract ………………………………………………………………………33
The Mortgage Loan Process ……………………………………………………………………44
Visit us on the web at
Items Needed for Loan Application ………………………………………………………44
www.RGSTITLE.com
Estimate Your Mortgage Payment …………………………………………………………45
for office directions,
Typical Mortgage Loan Process Flow Chart ………………………………………………46
explanations of
What Can You Afford? ………………………………………………………………………47
procedures,
Finding the Cash………………………………………………………………………………48
Settlement …………………………………………………………………………………………49
our exclusive on-line
Realtor® hotline
Truth in Lending………………………………………………………………………………51
Buyer’s Estimate of Settlement Charges …………………………………………………55
and draft settlement
Maryland Transfer and Recordation Taxes ………………………………………………56
statements!
Buyer’s Settlement Costs Worksheet ………………………………………………………57
Seller’s Settlement Costs Worksheet ………………………………………………………58
Owner’s Title Insurance …………………………………………………………………………59
In Closing …………………………………………………………………………………………60
Important Telephone Numbers …………………………………………………………………61
Glossary ……………………………………………………………………………………………64
MARYLAND & WASHINGTON, D.C. OFFICES
BETHESDA
7101 Wisconsin Ave.,
Suite 112
Bethesda, MD 20814
301-654-9800
301-654-8598 FAX
BOWIE
4201 Northview Drive
Suite 407
Bowie, MD 20716
301-809-0011
301-809-6860 FAX
ROCKVILLE
11333 Woodglen Drive
Suite 202
Rockville, MD 20852
301-230-0070
301-230-2536 FAX
SILVER SPRING*
12520 Prosperity Drive
Suite 100
Silver Spring, MD 20904
301-680-0200
301-680-2043 FAX
WASHINGTON, D.C.
3553 Wisconsin Ave., NW
Suite 440
Washington, DC 20015
202-966-0550
202-966-5250 FAX
ALEXANDRIA
515 King Street
Suite 502
Alexandria, VA 22314
(703) 519-7600
(703) 519-9471 FAX
BURKE
6045-D Burke Centre
Parkway
Burke, VA 22015
(703) 239-9600
(703) 239-0605 FAX
GAINESVILLE
7512 Iron Bar Lane
Gainesville, VA 20155
(571) 248-8777
(571) 248-8788 FAX
MANASSAS
7702 Donegan Drive
Manassas, VA 20109
(703) 396-8838
(703) 396-8809 FAX
CENTREVILLE*
6101 Redwood Sq. Circle
Suite 117
Centreville, VA 20121
(703) 818-8600
(703) 803-2867 FAX
MCLEAN
1355 Beverly Road
Suite 100
McLean, VA 22101
(703) 903-9600
(703) 903-9606 FAX
STAFFORD
45 Doc Stone Road
Suite 103
Stafford VA 22556
(540) 288-1747
(540) 288-1797 FAX
ANNANDALE*
7619 Little River Turnpike
Suite 410
Annandale VA 22003
(703) 642-6100
(703) 642-6142 FAX
LAKE RIDGE
2220 Tacketts Mill Drive
Lake Ridge, VA 22192
(703) 491-9600
(703) 492-7494 FAX
STERLING
46175 Westlake Drive
Suite 250
Sterling, VA 20165
(703) 421-3300
(703) 421-6353 FAX
RESTON*
1801 Old Reston Avenue
Suite 100
Reston, VA 20190
(703) 742-9600
(703) 742-9698 FAX
WARRENTON
(540) 341-7700
(540) 341-8574 FAX
ARLINGTON*
3319 Lee Highway
Arlington, VA 22207
(703) 351-0300
(703) 351-9978 FAX
FAIR OAKS
(703) 502-3255
(703) 242-0725 FAX
VIRGINIA OFFICES
ASHBURN
(703) 726-9222
(703) 726-9368 FAX
FREDERICKSBURG
2015 Plank Road
Fredericksburg, VA 22401
(540) 372-4100
(540) 372-4114 FAX
LEESBURG
109 N. King Street
Leesburg, VA 20176
(703) 777-1286
(703) 777-1625 FAX
(703) 777-2197 DATA
(703) 777-2190 DATA
LORTON
8971 Ox Road, Suite 190
Lorton, VA 22079
(703) 495-9600
(703) 493-9302 FAX
OAKTON
2911 Hunter Mill Road
Suite 202
Oakton, VA 22124
(703) 242-9600
(703) 242-0725 FAX
SPRINGFIELD*
7202-B Old Keene Mill Rd.
Springfield, VA 22150
(703) 451-6600
(703) 451-1181 FAX
WINCHESTER
500 West Jubal Early Dr.
Suite 100
Winchester, VA 22601
(540) 723-0662
(540) 723-0664 FAX
REALTOR® HOTLINE
(877) 660-5150
*English & Spanish
A Homebuyer’s Guide from RGS TITLE
Page 2
PURCHASING
A HOME—
SUMMARY
FOR THE
BUYER
GETTING STARTED
T
he initial step in your purchase of a
home is your selection of a real estate
agent. The real estate professional that
you select will help you to focus your
search for the home that fits your needs
and desires as well as the realities of your
budget. Your Realtor® will introduce you
to the entire home buying process from
identifying areas, features and types of
homes in which you are interested, to
assisting you in determining your qualifications for the financing of your purchase.
Typically the Buyer will be working
with a Realtor® who is referred to as the
Selling Agent. The legal and ethical
responsibilities of your agent are established by Virginia statute and by Virginia
Real Estate Board regulations. Disclosure
of the brokerage relationship will be provided to you by your agent. The Realtor®
you work with may discuss the possibility of representing you as a “Buyer
Broker”. If you and your Realtor® agree
to establish such a relationship, the real
estate agent’s obligation and fiduciary
duty will be to you rather than to the
Seller. Regardless of which type of relationship you establish, the real estate professional will perform countless services
for you, all with the goal of making the
home buying and settlement process as
simple and enjoyable as possible. Your
Realtor® has available the tools and professionalism needed to help you achieve
this goal.
FINDING YOUR HOME
In order to determine the attributes of
the home you desire, it will be necessary
for your real estate agent to ask many
questions regarding your needs, your
desires, and your finances. These questions are designed to focus your search
for the perfect home to help you determine exactly what you want and what
you can afford. Prior to meeting with
your Realtor®, you may wish to develop a
wants and needs list of your own. The
more details and characteristics you are
able to identify, the more focused your
search will be.
Once you and your Realtor® have identified the general characteristics, types
and styles of homes you are interested in
as well as the areas or neighborhoods in
which you wish to purchase, and the
price range which you can afford, your
Realtor® will formulate a list of homes
that meet your guidelines.
It is also customary at this point to
select a lender and obtain a “pre-approval”
letter. This letter enables a Purchaser to
negotiate from a stronger position and
can also expedite the loan application
process. Selecting your lender and the
loan officer who will oversee the approval
of your application for financing is crucial to the smooth completion of the purchase. Your Realtor® has ready access to
the Metropolitan Regional Information
System which lists all homes currently for
sale and registered with the local Board
of Realtors®. Your Realtor® will be able to
show you these homes.
SELLER PROPERTY
DISCLOSURE STATEMENT
When you have selected the house of
your choice, the Selling Agent will help
you write a purchase contract. The
process for getting a signed contract is
discussed in the next section. Before you
have a ratified contract (i.e., one that is
fully signed by all parties), Virginia law
requires that the Seller furnish to you
as the Buyer a Residential Property
Disclosure Statement (the “Disclosure”).
If the required Disclosure is not provided
to the Buyer by the Seller prior to ratification, then the Buyer has a qualified
right to cancel the contract.
The Disclosure includes several representations or statements made by the
Seller regarding the parcel of real estate
being sold. The form (provided by the
Virginia Real Estate Board) and the representations are specific and mandated
by Virginia law. While it is referred to as a
disclosure statement, to a great extent the
Disclosure is intended to put you, the
Buyer, on notice that you should exercise
whatever due diligence is necessary to
determine if there are any issues or concerns with respect to the property. It does
not provide any specific information
about the condition of the property and
will not inform you of any defects that
may exist. A prudent Buyer will have the
property and structures inspected by a
professional to determine its condition.
CONTRACTING FOR
YOUR PURCHASE
Once you have identified the home
that you wish to purchase, you will need
to prepare a contract specifying the
details of your purchase of the property.
Your Realtor® will help you to prepare
the purchase contract utilizing your local
Board of Realtors® recommended forms.
These standardized forms are used in
order to address all important issues and
to assure that both you and the Seller
comply with the various laws and regulations that govern the home sale and purchase transaction. If there are specific
issues you wish identified in the contract
that are not provided for in the standardized forms, your Realtor® or an attorney
with Shreves Schudel Saunders Jackson
Clarke & Parello, PLLC, (General Counsel
to RGS TITLE) can recommend language tailored to meet those concerns.
Once your contract has been completed and signed by you, your Realtor® will
present it to the Seller’s agent (often
referred to as the “Listing Agent”) for presentation to the Seller. At this time your
contract is an OFFER TO PURCHASE,
and the Seller may proceed in one of
three ways. First the Seller may ACCEPT
your offer in the form presented. If the
Seller accepts your offer and signs the
contract you now have a RATIFIED contract. Often, however, the Seller, although
interested in your offer, may make a
COUNTER OFFER, by modifying one or
more of the terms of your offer to purchase. At this point you have the option
of a) accepting the Seller’s counter offer
and thus ratifying the contract; b) countering the Seller’s counter offer; or c)
rejecting the Seller’s counter offer thereby
nullifying the contract. The Seller’s third
option when presented with your initial
purchase offer is to reject that offer.
When your contract has been signed
by all parties and ratified it is important
that you contact RGS TITLE. In order to
assure a smooth and timely settlement it
is imperative that the contract be forwarded to the RGS TITLE office most
convenient to you so that we may begin
Page 3
the process of gathering all of the information necessary to conduct the settlement. It is not necessary to await
approval of your loan before forwarding
the contract to our office; in fact, to do so
may delay the date of settlement.
OBTAINING YOUR LOAN
Shortly after ratification of your
Purchase Contract it will be necessary to
make application for the financing of
your purchase. Your loan officer will be
responsible for taking your loan application and for overseeing the processing of
that application as you move toward loan
approval.
Working with the loan officer is the
loan processor. The loan processor is
responsible for gathering the information
and documentation necessary to document your application. The loan processor will be responsible for ordering your
credit report, appraisal, employment verification and several other documents.
Once this information has been received
it must be organized by the processor for
submission for loan approval.
It is imperative that your lender, loan
officer and loan processor be capable
and qualified. Your Realtor® will be able
to provide you with the names of loan
officers with whom they have worked in
the past and had successful transactions.
A more detailed analysis of the loan
process begins on page 44 of this booklet.
SETTLEMENT
Settlement is the culmination of your
hard work and time when the purchase
of your home is completed. RGS
TITLE’s role is to coordinate all of the
parties involved in this transaction, to
conduct the settlement and to complete
the vast post-settlement work. The legal
aspects of your transaction will be overseen by the attorneys of Shreves Schudel
Saunders Jackson Clarke & Parello,
PLLC, General Counsel to RGS TITLE.
On page 49, you will find a more
detailed discussion of the settlement
process and the services performed by
RGS TITLE.
PURCHASING
A HOME—
SUMMARY
FOR THE
BUYER
Page 4
PURCHASING
A HOME—
SUMMARY
FOR THE
BUYER
T
he standard contract used in this area is the
Regional Sales Contract (the “Contract”) (reprinted following this explanation). The Contract,
a document outlining the specifics of financing
and price as well as the parties’ rights and responsibilities, is used in Northern Virginia, the District
of Columbia, and parts of Maryland, Delaware,
West Virginia and Pennsylvania. In Maryland
there is an alternative contract form created by
the Maryland Association of Realtors (MAR).
Some points not directly addressed in the Contract
are addressed in attachments to the Contract
known as addenda. We have filled in the blanks of
the sample Contract and will refer to it throughout
our discussion. Please note that we have addressed
most but not all of the terms of the Contract in
this explanation. We strongly recommend that you
read the Contract in full prior to ratification and
discuss it with your Realtor®. Of course, you may
also wish to have it reviewed by an attorney.
Our discussion begins with the preamble to the
Contract. This first section contains blank spaces
for the date that the Contract offer is written by
the Purchaser, and a space for the Purchaser’s
name, Seller’s name, and the names of the listing
and selling real estate companies. You will notice
that this section also provides for the parties to
specify whom the real estate companies represent. The real estate companies’ (agents’) duties
to the Purchaser and Seller are now established
by Virginia Statute, Maryland Statute, or
Washington, DC law. Previously, both the listing
and selling companies were agents of the Seller.
Many Purchasers hire Realtors® who represent
just the Purchaser’s interest. Such a Realtor® is
known as a “buyer agent.” If you are interested in
a buyer agent arrangement you should contact
your Realtor® for more details. In the sample
contract, our Purchaser has chosen a buyer agent
relationship.
1. REAL PROPERTY. The property to be conveyed is described in this paragraph. This is done
by way of the tax map #, lot, block, and section
number and the subdivision or condominium
name. There are also spaces for the condominium unit and parking space numbers, street
address, Deed Book/Liber, Page/Folio and county
or municipality.
2. PRICE AND FINANCING. The financial terms
of the transaction are itemized in this paragraph.
Subparagraph A is where the Purchaser specifies
the amount of the down payment. In our example, we have chosen a down payment of
$40,000.00. The down payment is to be paid by
the Purchaser at settlement by a certified or
cashier’s check, or by bank wired funds. The
earnest money deposit specified in Paragraph 4 is
part of the down payment. Please note that the
down payment is in addition to any closing costs
that the Purchaser might pay at settlement.
The financing which the Purchaser will need in
order to purchase the property is set forth in
Subparagraph B. The term “Trust” used in this
paragraph refers to the deed of trust (or mortgage) that the lender will require the Purchaser
to sign at settlement. The deed of trust is the document whereby the Purchaser pledges the property as collateral for the loan.
The down payment plus the total of the financing
sought equals the total sales price of the property.
Page 5
3. DEED(S) OF TRUST. The specifics of the first
deed of trust loan and, if applicable, the second
deed of trust are entered here. The Purchasers
state whether they are obtaining a new loan or
assuming the Seller’s existing loan. The type of
loan is also specified. If the Purchaser is assuming the existing loan, the parties will use the
check boxes to specify whether there will be a
release of liability (FHA) or a substitution of the
Seller’s eligibility under a VA loan. In our case the
Purchaser has chosen to obtain a conventional
thirty year fixed rate loan. Our Purchaser has a
loan with an interest rate of 7% per year. Given
the loan amount of $160,000, this equates to a
monthly payment of principal and interest of
approximately $1,064.50.
4. DEPOSIT. The amount of the deposit or
earnest money paid by the Purchaser is entered
here along with the form of payment, such as a
check or money order, etc. This deposit is to be
held in an escrow account by the named Escrow
Agent and applied to the purchase price of the
property at settlement. Except for matters constituting gross negligence or willful misconduct, the
Escrow Agent is released from any and all liability.
5. DOWN PAYMENT. This is a reminder that
the balance of the down payment (the total down
payment minus the earnest money deposit) is to
be paid on or before settlement by certified or
cashier’s check or by bank-wired funds. It also
prohibits the use of an assignment of funds
unless prior written consent of the Seller has
been obtained.
6. SETTLEMENT. The date chosen for settlement is inserted here. The Purchaser has the
right to choose the Settlement Agent. In Virginia
however, this is achieved by designating the entity in Paragraph 10 of the Virginia Jurisdictional
Addendum. We recommend that you select our
firm by writing RGS Title in paragraph 10 of the
addendum as well as in the blank for Settlement
Agent in this Paragraph 6.
7. EQUIPMENT, MAINTENANCE AND CONDITION. Here the Purchaser and Seller agree
that the Purchaser will accept the property in its
condition, as of the contract date, except as otherwise agreed by the parties. Nonetheless, unless
provided otherwise, THE SELLER DOES WARRANT THAT ITEMS SUCH AS THE EXISTING
APPLIANCES, HEATING AND COOLING SYSTEMS, PLUMBING, AND ELECTRICAL SYSTEMS AND OTHER SPECIFICALLY ENUMERATED ITEMS SHALL BE IN NORMAL WORKING ORDER AS OF THE DATE POSSESSION
IS GIVEN TO THE PURCHASER. The property
shall be delivered to the Purchaser in broom
clean condition and in substantially the same
condition as it was at the date of Contract acceptance. Seller is required to have all utilities in service until settlement.
8. UTILITIES—WATER, SEWAGE, HEATING
AND CENTRAL AIR CONDTIONING. Here is
a checklist to identify the type of water supply,
sewage disposal system and the type of hot
water, heating and air conditioning system for
the property.
9. PERSONAL PROPERTY AND FIXTURES.
The contract here specifies certain items that are
included and others that are not included in the
conveyance to the Purchaser. It also provides a
RESALE
CONTRACT
FOR SINGLE
FAMILY
HOMES
Page 6
RESALE
CONTRACT
FOR SINGLE
FAMILY
HOMES
checklist itemizing specific personal property and
fixtures to identify whether the items convey to
the Purchaser, and space to list others. In addition
to identifying the items, the Seller can specify
which convey without warranty as to their condition or working order. Leased items, which do not
convey, are listed in this paragraph as well.
10. CONVENTIONAL FINANCING TERMS.
Subparagraph A – SELLER SUBSIDY begins
with a blank space for providing any possible
Seller contributions toward the Purchaser’s settlement charges. In our example, the Seller has
agreed to pay $2,000 of these charges. It is the
Purchaser’s responsibility to confirm that the
entire credit may be utilized. Subparagraph B –
APPRAISAL provides boxes, one of which must
be checked, to select the OPTION to choose
whether the contract is contingent or not contingent on an appraisal. The appraisal contingency
provisions appear in Paragraph 4 of the Virginia
Jurisdictional Addendum. Subparagraph C –
FINANCING also provides boxes, one of which
must be checked, to select the OPTION to choose
whether the contract is contingent or not contingent on financing. If OPTION (1) is chosen the
Contract will be contingent upon the Purchaser
securing approval for the new financing or
lender’s approval of assumption. The Purchaser
and the Seller need to agree upon the length of
time for the contingency and insert the agreed
number of days in the blank space provided
(“Financing Deadline”) and then choose whether
a “Lender’s Letter” as defined here shall be
required with the notice removing the contingency. Regional Form #100 is the form of notice
required to remove the contingency. PURCHASERS SHOULD BE AWARE that upon delivery to the Seller of the required notice, the contract is no longer contingent on financing.
If the Purchaser is unable to secure approval for
the specified financing during the contingency
period and deliver the required Regional Form
#100 to the Seller, then the Seller may give notice
that the Contract will be void, unless Form #100
with required attachment is provided within 3
days. The financing contingency will continue,
however, until the required Regional Form #100,
with the lender’s letter, if required, is delivered to
the Seller, or the Seller delivers notice to the
Purchaser that the Contract will be void.
If the loan is rejected during the contingency period, then upon delivery of a copy of the written
rejection to the Seller the Contract will become
void.
11. VA or FHA FINANCING AND APPRAISAL.
VA or FHA FINANCING AND APPRAISAL. This
paragraph contains boxes for the Purchaser to
select if VA or FHA financing applies and select
the corresponding addendum. IT IS WORTH
NOTING that the contract provides that even if
there is no such agreement, the Seller will pay
any lender charges that by law or regulation cannot be charged to a Purchaser.
Under both VA and FHA loans, the Purchaser
shall not be obligated to complete the purchase
of the property or be made to forfeit their earnest
money deposit if the lender’s appraisal is lower
than the sales price.
12. FINANCING APPLICATION. The Purchaser
agrees to make application for specified financ-
ing and for any lender required property insurance no later than seven days after the date of
ratification of the contract, if contingent on
financing. The Purchaser also gives permission
for the selling company and lender to disclose
information to the listing company regarding the
status of the Purchaser’s loan.
13. ALTERNATE FINANCING. The Purchaser
may choose a different loan and/or lender for
what is identified in Paragraphs 2 and 3 and the
Lender’s Letter under 10(C), provided the conditions in this paragraph are met, including no
delay in settlement.
14. PURCHASER’S REPRESENTATIONS.
Here the Purchaser represents whether or not the
property will be occupied as principal residence.
The Purchaser also represents that the ability to
obtain the specified financing is not contingent
upon the sale or lease of other real property. In
addition, there are boxes to check indicating
whether or not the Selling Company may disclose the Purchaser’s financial information to the
Listing Company and Seller.
15. ACCESS TO PROPERTY. The Purchaser,
inspectors, appraisers, and Realtor are allowed
reasonable access to the property, including the
right to make a final inspection within 5 days
prior to settlement.
16. TERMITE INSPECTION. Check boxes are
provided to indicate who will procure and pay
for a report from a licensed pest control firm
establishing that the dwellings or structures are
free from termites and other wood destroying
insects. Any required extermination and/or structural repairs shall be made at Seller’s expense.
17. REPAIRS. Here the parties agree that if the
Purchaser’s lender requires repairs to the property as a condition of the loan, then the Seller shall
make the repairs. If the Seller refuses to do so,
the Purchaser may either make the repairs and
bear the expense or the Contract becomes void.
18. DAMAGE OR LOSS. The risk of loss by fire
or other casualty remains with the Seller until
execution and delivery of the deed of conveyance
to the Purchaser at settlement.
19. TITLE. The Seller must comply with any
notices of violation from county or local authorities or condominium or homeowner’s associations. For example if the Seller had been cited by
the homeowner’s association for a fence built in
violation of the association rules, the Seller may
have to remove the fence prior to settlement.
Further, the Seller is required to give “good and
marketable and insurable” title to the Purchaser.
In other words, the title to the property must be
free of all liens and encumbrances except those
expressly assumed by the Purchaser. This also
means that the title must be insurable with no
additional risk premiums. If defects exist in the
title and the Seller cannot cure them within 30
days the Purchaser may void the Contract.
20. POSSESSION DATE. The Purchaser has the
right to take possession of the property at the
time of settlement unless otherwise agreed by the
parties. If the Purchaser has to take legal action
to obtain possession, Seller shall be responsible
for any and all damages and losses so incurred
by Purchaser.
21. FEES. The division of settlement fees between
Purchaser and Seller is discussed here. See also
Paragraph 12 of the Virginia Jurisdictional
Addendum.
22. BROKER’S FEE. The settlement agent is
given irrevocable instructions to disburse the listing and selling real estate brokers’ commission
as agreed.
23. ADJUSTMENTS. This provision allows for all
the expenses incurred on the property to be
charged to the appropriate parties as of the settlement date. In our example, the settlement date is
January 21. Since taxes are paid semi-annually
(first half from January 1 through June 30, and
second half from July 1 through December 31),
this means that the Purchaser will pay for the
whole first half of the year even though he will not
acquire the property until January 21. To remedy
this problem, Paragraph 23 requires the Seller to
credit back to the Purchaser the Seller’s share of
the enumerated expenses including taxes. The
Seller will pay at settlement twenty days of taxes
directly to the Purchaser who will then be responsible for paying the full six months when the bill
comes due. Any heating or cooking fuel remaining
in supply tanks at the time of settlement will
become the property of the Purchaser, unless they
are leased items.
24. ATTORNEY’S FEES. Any attorney’s fees
incurred as a result of a dispute arising under
the Contract shall be paid by the non-prevailing
party.
25. PERFORMANCE. This paragraph sets out
what would constitute sufficient tender of performance by the parties of their obligations under
the Contract. It also states that funds from the
transaction may be used to pay off existing liens
and encumbrances affecting the property.
26. DEFAULT. If the Purchaser is in default under
the Contract, the Seller has the option to either
sue to enforce the Contract or to seek monetary
damages. Remember, the earnest money deposit
may not be the extent of the Purchaser’s liability. If
the Seller defaults, the Purchaser may sue for specific performance of the Contract or to seek monetary damages. If either party wrongfully fails to
sign a release, they shall pay all court costs and
expenses of the party seeking the release. Except
for matters constituting gross negligence or willful
misconduct, the Escrow Agent is released from
any and all liability.
27. OTHER DISCLOSURES. The Seller and
Purchaser are reminded that they should seek
advice from appropriate professionals, if desired.
Subparagraph A is designed to alert the
Purchaser to certain items that might not otherwise be apparent. The provision suggests that the
Purchaser may wish to avail themselves of a
home inspection service and home warranty programs, and investigate such things as soil conditions, possible property use restrictions due to
zoning, and other issues related to the property.
The purpose is to let the Purchaser know that the
property is sold without warranty or guarantee as
to certain items and conditions, and it is left to
the Purchaser to ask the right people the right
questions to find out what “as is” includes or does
not include. Subparagraph B puts the parties on
notice that all contracts and addenda must be in
writing to be enforceable. The parties also
acknowledge that they have the right to seek legal
counsel. In Subparagraph C, the Purchaser
Page 7
acknowledges responsibility for negotiating
financing terms and that the future availability of
mortgage money is speculative. Subparagraph D
is a disclosure of the real estate broker’s possible
other real estate related activities. Subparagraph
E directs the Purchaser to the local tax authority
for information on property tax. Subparagraph F
reminds both parties of the importance of securing and maintaining property insurance with
assistance from an insurance professional.
28. ASSIGNABILITY. The Contract is not
assignable unless both the Seller and Purchaser
so agree in writing. Further, even if the Seller
and/or Purchaser agree to assign their interest to
a third party or parties, the original parties to the
Contract remain liable until settlement.
29. DEFINITIONS. This provision defines certain words used in the Contract, i.e., what these
words mean in the context of the Contract.
30. MISCELLANEOUS. Among other things, the
parties to the Contract are informed that any
typed or handwritten provisions of the Contract
will supersede any conflicting pre-printed provisions.
31. VOID CONTRACT. In the event that the
contract becomes void under any of its provisions, then the parties to the contract agree to
sign a release document.
32. ADDITIONS. Additional forms or documents to be incorporated as a part of the
Contract are identified in this paragraph.
33. HOME WARRANTY. If a home warranty
program is being purchased, the cost and name
of the provider, as well as who pays for it, are
inserted here.
34. OTHER TERMS. Additional conditions and
agreements may be added to the Contract in this
paragraph.
35. ENTIRE AGREEMENT. This provision
states that the Contract will survive the deed,
meaning that even after settlement the agreements contained in the Contract which have not
been satisfied are still binding. Further, this provision states that all agreements must be in writing and contained in the Contract or made a part
of it (i.e., addenda).
VIRGINIA JURISDICTIONAL ADDENDUM
The Regional Sales Contract is used in many jurisdictions, each with its own laws and customs.
The Virginia Jurisdictional Addendum must be
signed and attached to bring the Contract into
compliance with Virginia laws and the customs of
the Northern Virginia real estate industry.
1. DELIVERY. This paragraph specifies when
delivery is deemed to have occurred and where it
is to be sent. Purchaser and Seller are to indicate
in the blanks their delivery addresses. Copies are
to be provided to the real estate brokers as a
courtesy.
2. NOTICES. In order to be binding, notices
must be in writing and delivered to the locations
specified in the Delivery paragraph.
3. FHA/VA FINANCING. As noted in paragraph
11 of the Contract, if Purchaser is obtaining FHA
or VA financing, the appropriate Addendum
must be signed and attached.
4. APPRAISAL CONTINGENCY FOR CONVENTIONAL FINANCING (ONLY). This para-
RESALE
CONTRACT
FOR SINGLE
FAMILY
HOMES
Page 8
RESALE
CONTRACT
FOR SINGLE
FAMILY
HOMES
graph applies if Option 1 in Paragraph 10(B) of
the contract is selected. It provides a blank to
identify the time period for Purchaser to obtain
an appraisal for conventional financing and specifies notice requirements, as well as elections to
be made in the event that the lender’s appraisal is
less than the sales price.
5. VIRGINIA RESIDENTIAL PROPERTY
DISCLOSURE ACT. Virginia law requires the
Seller to deliver a disclosure statement, on forms
provided by the Real Estate Board, related to the
condition of the property based on the Seller’s
actual knowledge. Failure by the Seller to deliver
the disclosure statement by the date of ratification of the Contract gives the Purchaser a qualified right of cancellation or action for damages.
6. TARGET LEAD-BASED PAINT HOUSING.
Most residential dwellings constructed before
1978 are considered “Target Housing” for leadbased paint hazards. If the property is “Target
Housing,” there are two additional forms listed
in this paragraph which must be completed
before the Contract is binding.
7. PRIVATE WELL AND/OR PRIVATE
SEWAGE SYSTEM. In the event that the property has a private well and/or septic system, either
the Purchaser or the Seller shall procure certified
test results from the appropriate local government
(i.e., the health department) or private company.
Check boxes are provided to indicate whether the
Purchaser or Seller will procure and pay for the
tests. If either system is found defective or substandard, according to current government standards, the Seller shall take appropriate action to
cure the defect at Seller’s expense.
8. VIRGINIA PROPERTY OWNERS’ ASSOCIATION ACT. If the property is within a development subject to a homeowner’s association, certain disclosure requirements apply. The Property
Owners’ Association Act requires the Seller to furnish the Purchaser with the association disclosure
packet containing the rules and financial information of the association. The Purchaser may cancel the Contract within 3 days of receipt of the
packet or notice that the packet is not available.
9. VIRGINIA CONDOMINIUM ACT. The
Condominium Act requires the Seller to furnish
the Purchaser with the condominium association
disclosure package containing the rules and
financial information of the association. The
Purchaser may cancel the Contract within 3 days
of receipt of the package or notice that the package is not available.
10. CONSUMER REAL ESTATE SETTLEMENT PROTECTION ACT. The parties to the
transaction are notified that the Purchaser has
the right to choose the settlement agent. Also
some of the settlement agent’s duties and/or
obligations are defined here. We hope that you
will choose RGS TITLE by entering our name in
the blank space.
11. POSSIBLE FILING OF MECHANICS’
LIENS. The Purchaser is put on notice as to the
possible filing of mechanics’ liens. These liens are
filed against property for work done on the property. Mechanics’ liens for work done prior to closing may be filed after closing. In almost every
case, owner’s title insurance purchased from RGS
TITLE will provide complete protection against
mechanics’ liens for the home buyer. However,
feel free to call one of our offices for questions
and answers concerning your particular situation
including the possibility of mechanics’ liens.
12. ADDITIONAL FEES. The Seller agrees to
pay the Virginia State Grantor’s tax (.1% of the
sales price). The Purchaser agrees to pay recordation charges for the deed and any deeds of trust.
13. ARBITRATION. This paragraph simply indicates that the Contract does not preclude the
arbitration provisions of the Code of Ethics and
Standards of Practice governing real estate professionals.
14. TIME IS OF THE ESSENCE AS TO ALL
TERMS OF THIS CONTRACT. Time is of the
essence means that the parties to the transaction
must complete their obligations in a diligent and
timely manner, by the date and time specified.
15. REAL ESTATE LICENSED PARTIES. An
agent or broker who is related to one of the
parties is required to disclose that relationship.
FHA AND VA FINANCING CONTINGENCY
ADDENDA
The Regional Sales Contract form provides for
Conventional Financing terms, but there is a separate addendum for the loan in the event FHA or
VA financing is to be obtained. FHA and VA loan
programs have distinct requirements, so the
appropriate addendum must be signed and
attached in order to incorporate those required
provisions, indicate the loans terms and specify
the “Financing Deadline”.
Under either a VA or FHA loan program, the
Purchaser will not be obligated to complete the
purchase of the property or be made to forfeit the
earnest money deposit if the lender’s appraisal is
lower than the sales price as set out in Paragraph
3 of each addendum. In Paragraph 4, there is a
space to specify the amount of Purchaser’s charges
that Seller agrees to pay. It should be noted that
even if there is no such agreement, the Seller agrees
to pay any lender charges that by law or regulation
cannot be charged to a Purchaser.
OTHER ADDENDUM FORMS
Your Realtor® may also prepare other addenda to
add critical terms to the Contract. One commonly
used addendum is the CONTINGENCIES/
CLAUSES ADDENDUM which becomes a part of
the Contract if attached with all parties signing.
This addendum allows the parties to make the
Contract contingent on the happening of certain
named events, for example, the sale of the
Purchaser’s current home, as well as to modify
some of the terms of the Contract, such as providing for a pre- or post-settlement occupancy agreement. A HOME INSPECTION AND RADON
TESTING ADDENDUM is also frequently used to
provide a contingency to allow the Purchaser to
obtain a satisfactory inspection of the home to
determine its general condition and for the presence of radon.
NOTE: The Washington DC Jurisdictional
Addendum or The Montgomery County, MD
Jurisdictional Addendum must be attached,
when appropriate and applicable, to address
local issues and concerns not reflected in the
body of the Contract.
Page 9
REGIONAL SALES CONTRACT
December 1, 2010
This SALES CONTRACT (“Contract”) is made on ___________________________________
(“Contract Date”)
Paul Purchaser
between ___________________________________________________________________________________
Sue Seller
(“Seller”)
(“Purchaser”) and __________________________________________________________________________
who, among other things, hereby confirm and acknowledge by their initials and signatures herein that by prior disclosure
(“Listing Company”)
in this real estate transaction Listing Agent’s Company
Selling Agent’s Company
represents Seller, and
(“Selling Company”)
represents
X Purchaser or Seller.

The Listing Company and Selling Company are collectively referred to as (“Broker”). (If
the brokerage firm is acting as a dual representative for both Seller and Purchaser, then the appropriate disclosure form is
attached to and made a part of this Contract.) In consideration of the mutual promises and covenants set forth below, and
other good and valuable consideration the receipt and sufficiency of which is acknowledged, the parties agree as follows:
1. REAL PROPERTY Purchaser will buy and Seller will sell for the sales price (“Sales Price”), Seller’s entire interest
in the real property (with all improvements, rights and appurtenances) described as follows (“Property”):
1
A
Legal Description: Lot(s) _____________________________________
TAX Map/ID #
Anywhere Estates
Section
Subdivision or Condominium ___________________________
Block/Square
Fairfax
County/Municipality _______________________________________________
Parking Space(s) #
Page/Folio # __________________________________
Deed Book/Liber # 123 Happy Trails Court
Street Address _____________________________________________________________________________________
Fairfax
VA
22222
City ________________________________
State
Zip Code _______________________
Unit #
2. PRICE AND FINANCING
$ 40,000.00
A. Down Payment
B. Financing
1. First Trust (if applicable)
$ 160,000.00
2. Second Trust (if applicable)
$
3. Seller Held Trust
$
Addendum attached (if applicable)
TOTAL FINANCING
$ 160,000.00
SALES PRICE
$ 200,000.00
3. DEED(S) OF TRUST
X Obtain or Assume
A. First Deed of Trust Purchaser will
X Conventional FHA VA Other
a
First Deed of Trust loan
X
30
amortized over
years at a Fixed or an Adjustable rate bearing (initial) interest of
7
% per year or market rate available. Special Terms (if any):
Regional Sales Contract–Rev 03/09
Page 1 of 10
Please Initial: Seller _______/______Purchaser ______/______
Page 10
B. Second Deed of Trust Purchaser will Obtain or Assume
a Second Deed of Trust loan amortized over
years at a Fixed or an Adjustable rate bearing
% per year or market rate available. Special Terms (if any):
(initial) interest of
C. Assumption Only Assumption fee, if any, and all charges related to the assumption will be paid by the Purchaser.
X will, or will not obtain a release of Seller’s
If Purchaser assumes Seller’s loan(s): (i) Purchaser and Seller
liability to the U.S. Government for the repayment of the loan by Settlement, (ii) Purchaser and Seller
will, or will not obtain substitution of Seller’s VA entitlement by Settlement. Balances of any assumed
loans, secondary financing and cash down payments are approximate.
4. DEPOSIT
A. Purchaser has delivered a deposit (“Deposit”) to ___________________________________ (“Escrow Agent”) of
X $ 5,000.00

check and/or $
by note due
and payable on __________________________________________.
B. The Deposit will be placed in an escrow account of the Escrow Agent after Date of Ratification in conformance
with the laws and regulations of the appropriate jurisdiction and/or, if VA financing applies, as required by Title
38 of the U.S. Code. This account may be interest bearing and all parties waive any claim to interest resulting
from the Deposit. The Deposit will be held in escrow until: (i) Credited toward the Sales Price at Settlement; (ii)
All parties have agreed in writing as to its disposition; (iii) A court of competent jurisdiction orders disbursement
and all appeal periods have expired; or, (iv) Disposed of in any other manner authorized by the laws and
regulations of the appropriate jurisdiction. Seller and Purchaser agree that Escrow Agent will have no liability to
any party on account of disbursement of the Deposit or on account of failure to disburse the Deposit, except in the
event of the Escrow Agent’s gross negligence or willful misconduct.
5. DOWN PAYMENT The balance of the down payment will be paid on or before the Settlement Date by certified or
cashier’s check or by bank-wired funds. An assignment of funds shall not be used without prior written consent of
Seller.
6. SETTLEMENT Seller and Purchaser will make full settlement in accordance with the terms of this Contract
1-21-11
(“Settlement”) on, or with mutual consent before,
(“Settlement Date”) except as otherwise provided in this Contract. Purchaser selects: RGS Title LLC
(“Settlement Agent”) to conduct the
Settlement. (For transactions in Virginia, use the Virginia Jurisdictional Addendum to select the Settlement Agent.)
Either party may retain their own legal counsel. Purchaser agrees to contact the Settlement Agent within 10 Days
after the Date of Ratification to schedule Settlement and to arrange for ordering the title exam and, if required, a
survey.
7. EQUIPMENT, MAINTENANCE AND CONDITION Purchaser accepts the Property in the condition as of the
Contract Date except as otherwise provided herein. Seller warrants that, except as otherwise provided, the existing
appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required),
will be in normal working order as of the Possession Date. Seller will deliver the Property in substantially the same
condition as on the Contract Date and broom clean with all trash and debris removed. Purchaser and Seller will not
hold the Broker liable for any breach of this paragraph. Seller will have all utilities in service through Settlement or
as otherwise agreed.
Page 2 of 10
Page 11
8. UTILITIES -WATER, SEWAGE, HEATING AND CENTRAL AIR CONDITIONING (Check all that apply)
Water Supply:
Sewage Disposal:
Hot Water:
Air Conditioning:
Heating:
X

X

Public
Public
Oil
Oil
Oil

X

Private Well
Community Well
Septic for # BR ______ Community Septic Alternative Septic for # BR:
Gas
Elec.
Other
Zones ____
Gas

Heat Pump Other ____
X Elec.
Zones ____
Gas
Elec.
Heat Pump Other ___
9. PERSONAL PROPERTY AND FIXTURES The Property includes the following existing personal property and
fixtures: built-in heating and central air conditioning equipment, plumbing and lighting fixtures, sump pump, attic and
exhaust fans, storm windows, storm doors, screens, installed wall-to-wall carpeting, window shades, blinds, window
treatment hardware, smoke and heat detectors, TV antennas, exterior trees and shrubs. Unless otherwise agreed to in
writing, all surface or wall mounted electronic components/devices DO NOT convey. If more than one of an item
convey, the number of items is noted.
The items marked YES below are currently installed or offered.
Yes No #
X ___

X ___

X
___
X
___
X
___
X
___
X
___
X ___

X ___

X
___
X
___
Items
Alarm System
Built-in Microwave
Ceiling Fan
Central Vacuum
Clothes Dryer
Clothes Washer
Cooktop
Dishwasher
Disposer
Electronic Air Filter
Fireplace Screen/Door
Yes No # Items
X
___
Freezer
X ___ Furnace Humidifier

X
___
Garage Opener
___
w/ remote
X
___
Gas Log
X
___
Hot Tub, Equip,& Cover
X
___
Intercom
X
___
Playground Equipment
X
___
Pool, Equip, & Cover
X ___ Refrigerator

X ___

w/ ice maker
Yes No #
X
___
X ___

X ___

X
___
X
___
X
___
X
___
X
___
X
___
X
___
Items
Satellite Dish
Storage Shed
Stove or Range
Trash Compactor
Wall Oven
Water Treatment System
Window A/C Unit
Window Fan
Window Treatments
Wood Stove
OTHER
AS IS ITEMS
Seller does not warrant the condition or working order of the following items and/or systems:
If entire Property is sold “As Is”, appropriate addendum must be attached.
LEASED ITEMS
Any leased items, systems or service contracts (including, but not limited to, fuel tanks, water treatment systems, lawn
contracts, security system monitoring, and satellite contracts) DO NOT CONVEY absent an express written agreement by
Purchaser and Seller. The following is a list of the leased items within the Property:
Page 3 of 10
Page 12
10. CONVENTIONAL FINANCING TERMS
A. SELLER SUBSIDY Based on the financing terms specified in this Contract, Seller will pay at Settlement
toward Purchaser’s charges, (including but not limited to loan origination fees, discount
$ 2,000.00
fees, buy down or subsidy fees, prepaids or other charges as allowed by the lender). Purchaser will pay all
remaining Purchaser’s charges. If applicable, Purchaser will pay at Settlement or finance any initial private
mortgage insurance required by lender. It is Purchaser’s responsibility to confirm with his lender, if applicable,
that the entire credit provided herein may be utilized. If lender prohibits Seller from the payment of any portion
of this credit, then said credit shall be reduced to the amount allowed by the lender.
B. APPRAISAL (Must Select Option 1 or 2)
ҏOption (1) This Contract is contingent on Purchaser obtaining an Appraisal certifying the value of the
Property to be no less than the Sales Price. See Attached Addendum. If the appropriate Appraisal Contingency
Addendum is not attached, this Contract is not contingent on an Appraisal and Option (2) below will apply.
OR
Option (2) This Contract is not contingent on an Appraisal.
Purchaser shall complete Settlement without
regard to the value of the Property set forth in any Appraisal and acknowledges that this may reduce the amount
of financing available from lender and may require Purchaser to tender additional funds at Settlement. If
Purchaser fails to settle except due to any Default by Seller, then the provisions of paragraph #26 (Default) shall
apply.
C. FINANCING (Must Select Option 1 or 2) Not to be used with Seller Financing
Option (1) This Contract is contingent on Purchaser obtaining approval for loan(s) to purchase the Property
(The “Financing Contingency”).
Days after Date of Ratification (“Financing Deadline”) upon
This Contract is contingent until 9 p.m.
Purchaser Delivering Notice to Seller on the Regional Form #100 removing this Financing Contingency. Such
Notice shall or shall not be accompanied by a letter from the lender (“Lender’s Letter). Such Lender’s
Letter shall include the following statements or statements substantially similar thereto:
1) Purchaser is approved for the Specified Financing,
2) a ratified Contract has been received,
3) a written application for the financing has been made,
4) income, asset, and liability documentation on Purchaser have been received,
5) Purchaser’s credit has been reviewed, and
6) the application has been reviewed and meets underwriter and investor guidelines.
If Purchaser fails to Deliver Regional Form #100 and Lender’s Letter (if required) by the Financing Deadline, this
contingency will continue, unless Seller at Seller’s option gives Notice to Purchaser that this Contract will
become void. If Seller Delivers such Notice this Contract will become void at 9 p.m. on the third day following
Delivery of Seller’s Notice unless prior to that date and time:
a) Purchaser Delivers to Seller Regional Form #100 and Lender’s Letter (if required); or
b) Purchaser Delivers to Seller Regional Form #100 and provides Seller with evidence of sufficient
funds available to complete Settlement without obtaining financing.
Page 4 of 10
Page 13
Upon Delivery to Seller of either (a) or (b) above, this Contract will no longer be contingent on Purchaser being
approved for the Specified Financing and this Contract will remain in full force and effect.
Prior to satisfaction or removal of the Financing Contingency, if Purchaser receives a written rejection for the
Specified Financing and Delivers a copy of the written rejection to Seller, this Contract will become void.
OR
Option (2) This Contract is not contingent upon Purchaser obtaining approval for loan(s) to purchase the
Property. Purchaser acknowledges that there is not a Financing Contingency. Purchaser has provided sufficient
documentation to satisfy Seller that Purchaser has been approved for the Specified Financing or has sufficient
funds available to complete Settlement without obtaining financing. If Purchaser fails to settle except due to any
Default by Seller, then the provisions of paragraph #26 (DEFAULT) shall apply.
11.
VA or FHA FINANCING AND APPRAISAL
FHA Addendum Attached?
VA Addendum Attached?
ҏYes ҏNo
ҏYes No
If yes, see attached FHA Addendum
If yes, see attached VA Addendum
12. FINANCING APPLICATION If this Contract is contingent on financing, Purchaser will make written application
for the Specified Financing and any lender required property insurance no later than 7 days after the Date of
Ratification. Purchaser grants permission for the Selling Company and the lender to disclose to the Listing Company
and the Seller general information available about the progress of the loan application and loan approval process. If
Purchaser fails to settle except due to any Default by Seller, then the provisions of paragraph #26 (DEFAULT) shall
apply.
13. ALTERNATE FINANCING Purchaser may substitute alternative financing and/or an alternative lender for Specified
Financing provided:
(a) Purchaser is qualified for alternative financing;
(b) There is no additional expense to Seller;
(c) The Settlement Date is not delayed; and
(d) If Purchaser fails to settle except due to any Default by Seller, then the provisions of paragraph #26 (DEFAULT)
shall apply.
14. PURCHASER’S REPRESENTATIONS Purchaser will, or will not occupy the Property as Purchaser’s
principal residence. Unless specified in a written contingency, neither this Contract nor the financing is
dependent or contingent on the sale and settlement or lease of other real property. The Selling Company
is, or is not authorized to disclose to the Listing Company and Seller the appropriate financial or credit
information statement provided to the Selling Company by Purchaser. Purchaser acknowledges that Seller is relying
upon all of Purchaser’s representations, including without limitation, the accuracy of financial or credit information
given to Seller, Broker or the lender by Purchaser.
15. ACCESS TO PROPERTY Seller will provide the Broker, Purchaser, inspectors representing Purchaser and
representatives of lending institutions for Appraisal purposes, reasonable access to the Property to comply with this
Contract. In addition, Purchaser and/or Purchaser’s representative will have the right to make a final inspection
within 5 days prior to Settlement and/or occupancy, unless otherwise agreed to by Purchaser and Seller.
Page 5 of 10
Page 14
16. TERMITE INSPECTION The Purchaser at Purchaser’s expense or Seller at Seller’s expense, will furnish
a written report from a pest control firm dated not more than 30 days prior to Settlement showing that all dwelling(s)
and/or garage(s) within the Property (excluding fences or shrubs not abutting garage(s) or dwelling(s)) are free of
visible evidence of active termites and other wood-destroying insects, and free from visible structural insect damage.
Any extermination and structural repairs identified in the inspection report will be made at Seller’s expense.
17. REPAIRS If, as a condition of providing financing under this Contract, the lender requires repairs to be made to the
Property, then Purchaser will give Notice to Seller of the lender’s required repairs. Within 5 Days after such Notice,
Seller will give Notice to Purchaser as to whether Seller will make the repairs. If Seller will not make the repairs,
Purchaser will give Notice to Seller within 5 Days after Seller’s Notice as to whether Purchaser will make the repairs.
If neither Seller nor Purchaser will make the repairs, then this Contract will become void. This clause will not release
Seller from any responsibilities set forth in the paragraphs titled UTILITIES; PERSONAL PROPERTY AND
FIXTURES; EQUIPMENT, MAINTENANCE AND CONDITION; WELL AND SEPTIC; TERMITE
INSPECTION; or OTHER TERMS, or any terms specifically set forth in this Contract and any addenda. If the
Property is sold “as is”, Purchaser will be responsible for all repairs.
18. DAMAGE OR LOSS The risk of damage or loss to the Property by fire, act of God, or other casualty remains with
Seller until the execution and delivery of the deed of conveyance to Purchaser at Settlement.
19. TITLE The title report and survey, if required, will be ordered promptly and, if not available on the Settlement Date,
then Settlement may be delayed for up to 10 business days to obtain the title report and survey after which this
Contract, at the option of Seller, may be terminated and the Deposit will be refunded in full to Purchaser according to
the terms of the DEPOSIT paragraph. Fee simple title to the Property, and everything that conveys with it, will be
sold free of liens except for any loans assumed by Purchaser. Title is to be good and marketable, and insurable by a
licensed title insurance company with no additional risk premium. Title may be subject to commonly acceptable
easements, covenants, conditions and restrictions of record, if any; otherwise, Purchaser may declare this Contract
void, unless the defects are of such character that they may be remedied within 30 Days beyond the Settlement Date.
In case action is required to perfect the title, such action must be taken promptly by Seller at Seller’s expense. The
Broker is hereby expressly released from all liability for damages by reason of any defect in the title. Seller will
convey the Property by general warranty deed with English covenants of title (Virginia); general warranty deed (West
Virginia); special warranty deed (D.C. and Maryland) (“Deed”). Seller will sign such affidavits, lien waivers, tax
certifications, and other documents as may be required by the lender, title insurance company, Settlement Agent, or
government authority, and authorizes the Settlement Agent to obtain pay-off or assumption information from any
existing lenders. The manner of taking title may have significant legal and tax consequences. Purchaser is advised to
seek the appropriate professional advice concerning the manner of taking title. Unless otherwise agreed to in writing,
Seller will pay any special assessments and will comply with all orders, requirements, or notices of violations of any
county or local authority, condominium unit owners’ association, homeowners’ or property owners’ association or
actions in any court on account thereof, against or affecting the Property on the Settlement Date.
20. POSSESSION DATE Unless otherwise agreed to in writing between Seller and Purchaser, Seller will give
possession of the Property at Settlement, including delivery of keys, if any. If Seller fails to do so and occupies the
Property beyond Settlement, Seller will be a tenant at sufferance of Purchaser and hereby expressly waives all notice
to quit as provided by law. Purchaser will have the right to proceed by any legal means available to obtain possession
of the Property. Seller will pay any damages and costs incurred by Purchaser including reasonable attorney fees.
21. FEES Fees for the preparation of the Deed, that portion of the Settlement Agent’s fee billed to Seller, costs of
releasing existing encumbrances, Seller’s legal fees and any other proper charges assessed to Seller will be paid by
Seller. Fees for the title exam (except as otherwise provided) survey, recording (including those for any purchase
money trusts) and that portion of the Settlement Agent’s fee billed to Purchaser, Purchaser’s legal fees and any other
proper charges assessed to Purchaser will be paid by Purchaser. Fees to be charged will be reasonable and customary
for the jurisdiction in which the Property is located. (Recording, Transfer and Grantor’s Taxes are covered in the
appropriate jurisdictional addenda).
Page 6 of 10
Page 15
22. BROKER’S FEE Seller irrevocably instructs the Settlement Agent to pay the Broker compensation (“Broker’s Fee”)
at Settlement as set forth in the listing agreement and to disburse the compensation offered by the Listing Company to
the Selling Company in writing as of the Contract Date, and the remaining amount of Broker’s compensation to the
Listing Company.
23. ADJUSTMENTS Rents, taxes, water and sewer charges, front foot benefit and house connection charges,
condominium unit owners’ association, homeowners’ and/or property owners’ association regular periodic
assessments (if any) and any other operating charges, are to be adjusted to the day of Settlement. Any heating or
cooking fuels remaining in supply tank(s) at Settlement will become the property of Purchaser, unless leased. Taxes,
general and special, are to be adjusted according to the certificate of taxes issued by the collector of taxes, if any,
except that recorded assessments for improvements completed prior to Settlement, whether assessments have been
levied or not, will be paid by Seller or allowance made at Settlement. If a loan is assumed, interest will be adjusted to
the Settlement Date and Purchaser will reimburse Seller for existing escrow accounts, if any.
24. ATTORNEY’S FEES In any action or proceeding involving a dispute between Purchaser and Seller arising out of
this Contract, the prevailing party will be entitled to receive from the other party reasonable attorney’s fees to be
determined by the court or arbitrator(s). In the event a dispute arises resulting in the Broker being made a party to any
litigation or if the Broker is required to bring litigation to collect the Broker’s Fee, Purchaser and Seller agree to
indemnify the Broker, it’s employees, and/or licensees for all attorney fees and costs of litigation against the
responsible party, unless the litigation results in a judgment against the Broker, its employees and/or licensees.
25. PERFORMANCE Delivery of the required funds and executed documents to the Settlement Agent will constitute
sufficient tender of performance. Funds from this transaction at Settlement may be used to pay off any existing liens and
encumbrances, including interest, as required by lender(s) or lienholders.
26. DEFAULT Purchaser will be in Default even if the Financing Contingency has not been removed if Settlement does not
occur on the Settlement Date for any reason other than Default by Seller, including without limitation the following:
A. Failure to lock-in the interest rate(s) and the rate(s) increase so that Purchaser does not qualify for such financing;
OR
B. Failure to comply with the lender’s reasonable requirements in a timely and diligent manner; OR
C. Application is made with an alternative lender (one other than the lender who provided Lender’s Letter) and the
alternative lender fails to meet the Settlement Date; OR
D. Does not have the down payment, closing fees and any other required funds, including without limitation, any
additional funds required to be tendered by Purchaser if the Appraisal is lower than the Sales Price; OR
E. Makes any deliberate misrepresentations, material omissions or inaccuracies in financial information that results in
the Purchaser’s inability to secure the financing; OR
F. Failure to make application for property insurance, if required, by lender within 7 days of Date of Ratification;
OR
G. Goes or fails to do any act following the Date of Ratification that prevents Purchaser from completing Settlement.
If Purchaser fails to complete Settlement for any reason other than Default by Seller, at the option of Seller, the Deposit
may be forfeited as liquidated damages (not as a penalty) in which event Purchaser will be relieved from further liability
to Seller. If Seller does not elect to accept the Deposit as liquidated damages, the Deposit may not be the limit of
Purchaser’s liability in the event of a Default. If the Deposit is forfeited, or if there is an award of damages by a court or a
compromise agreement between Seller and Purchaser, the Broker may accept and Seller agrees to pay the Broker one-half
of the Deposit in lieu of the Broker’s Fee, (provided Broker’s share of any forfeited Deposit will not exceed the amount
due under the listing agreement). If Seller fails to perform or comply with any of the terms and conditions of this Contract
or fails to complete Settlement for any reason other than Default by Purchaser, Purchaser will have the right to pursue all
legal or equitable remedies, including specific performance and/or damages. If either Seller or Purchaser refuses to
execute a release of Deposit (“Release”) when requested to do so in writing and a court finds that such party should have
executed the Release, the party who so refused to execute the Release will pay the expenses, including, without limitation,
reasonable attorney’s fees, incurred by the other party in the litigation. Seller and Purchaser agree that no Escrow Agent
will have any liability to any party on account of disbursement of the Deposit or on account of failure to disburse the
Page 7 of 10
Page 16
Deposit, except only in the event of the Escrow Agent’s gross negligence or willful misconduct. The parties further agree
that the Escrow Agent will not be liable for the failure of any depository in which the Deposit is placed and that Seller and
Purchaser each will indemnify, defend and save harmless the Escrow Agent from any loss or expense arising out of the
holding, disbursement or failure to disburse the Deposit, except in the case of the Escrow Agent’s gross negligence or
willful misconduct. If either Purchaser or Seller is in default, then in addition to all other damages, the defaulting party
will immediately pay the costs incurred for the title examination, Appraisal, survey and the Broker’s Fee in full.
27. OTHER DISCLOSURES Purchaser and Seller should carefully read this Contract to be sure that the terms
accurately express their respective understanding as to their intentions and agreements. The Broker can
counsel on real estate matters, but if legal advice is desired by either party, such party is advised to seek legal
counsel. Purchaser and Seller are further advised to seek appropriate professional advice concerning the
condition of the Property or tax and insurance matters. The following provisions of this paragraph disclose some
matters which the parties may investigate further. These disclosures are not intended to create a contingency. Any
contingency must be specified by adding appropriate terms to this Contract. The parties acknowledge the following
disclosures:
A. PROPERTY CONDITION See paragraph #7 (EQUIPMENT, MAINTENANCE AND CONDITION) Various
inspection services and home warranty insurance programs are available. The Broker is not advising the parties as
to certain other issues, including without limitation: water quality and quantity (including but not limited to, lead
and other contaminants;) sewer or septic; soil condition; flood hazard areas; possible restrictions of the use of the
Property due to restrictive covenants, zoning, subdivision, or environmental laws, easements or other documents;
airport or aircraft noise; planned land use, roads or highways; and construction materials and/or hazardous
materials, including without limitation flame retardant treated plywood (FRT), radon, urea formaldehyde foam
insulation (UFFI), mold, polybutylene pipes, synthetic stucco (EIFS), underground storage tanks, asbestos and
lead-based paint. Information relating to these issues may be available from appropriate government authorities.
B. LEGAL REQUIREMENTS All contracts for the sale of real property must be in writing to be enforceable.
Upon ratification and Delivery, this Contract becomes a legally binding agreement. Any changes to this Contract
must be made in writing for such changes to be enforceable.
C. FINANCING Mortgage rates and associated charges vary with financial institutions and the marketplace.
Purchaser has the opportunity to select the lender and the right to negotiate terms and conditions of the financing
subject to the terms of this Contract. The financing may require substantial lump sum (balloon) payments on the
due dates. Purchaser has not relied upon any representations regarding the future availability of mortgage money
or interest rates for the refinancing of any such lump sum payments.
D. BROKER Purchaser and Seller acknowledge that the Broker is being retained solely as a real estate agent and not
as an attorney, tax advisor, lender, appraiser, surveyor, structural engineer, mold or air quality expert, home
inspector or other professional service provider. The Broker may from time to time engage in the general
insurance, title insurance, mortgage loan, real estate settlement, home warranty and other real estate-related
businesses and services. Therefore, in addition to the Broker’s Fee specified herein, the Broker may receive
compensation related to other services provided in the course of this transaction pursuant to the terms of a
separate agreement/disclosure.
E. PROPERTY TAXES Your property tax bill could substantially increase following settlement. For more
information on property taxes contact the appropriate taxing authority in the jurisdiction where the Property is
located.
F. PROPERTY INSURANCE Obtaining property insurance is typically a requirement of the lender in order to
secure financing. Insurance rates and availability are determined in part by the number and nature of claims and
inquiries made on a property’s policy as well as the number and nature of claims made by a prospective
Purchaser. Property insurance has become difficult to secure in some cases. Seller should consult an insurance
professional regarding maintaining and/or terminating insurance coverage.
Page 8 of 10
Page 17
28. ASSIGNABILITY This Contract may not be assigned without the written consent of Purchaser and Seller. If
Purchaser and Seller agree in writing to an assignment of this Contract, the original parties to this Contract remain
obligated hereunder until Settlement.
29. DEFINITIONS
A. “Appraisal” means a written appraised valuation of the Property.
B. “Day(s)” or “day(s)” means calendar day(s) unless otherwise specified in this Contract. For the purpose of
computing time periods, the first Day will be the Day following Delivery and the time period will end at 9 p.m. on
the Day specified. If the Settlement Date falls on a Saturday, Sunday, or legal holiday, then the Settlement will be
on the prior business day.
C. “Date of Ratification” means the date of final acceptance in writing of all the terms of this Contract (not the date
of expiration or removal of any contingencies).
D. For “Delivery” and “Notices” definitions, see appropriate Jurisdictional Addendum.
E. “Specified Financing” means the loan type(s) and amount(s), if any, specified in both paragraph #2 (PRICE AND
FINANCING) and paragraph #3 (DEEDS OF TRUST).
F. The masculine includes the feminine and the singular includes the plural.
G. “Possession Date” - See paragraph #20 (POSSESSION DATE).
30. MISCELLANEOUS This Contract may be signed in one or more counterparts, each of which is deemed to be an
original, and all of which together constitute one and the same instrument. Documents obtained via facsimile
machines will also be considered as originals. Typewritten or handwritten provisions included in this Contract will
control all pre-printed provisions that are in conflict.
31. VOID CONTRACT If this Contract becomes void and of no further force and effect, without Default by either
party, both parties will immediately execute a release directing that the Deposit be refunded in full to Purchaser
according to the terms of the paragraph # 4(DEPOSIT).
32. ADDITIONS The following forms, if ratified and attached, are made a part of this Contract. (This list is not all
inclusive of addenda that may need to be attached).
X
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
Yes No
Jurisdictional Addendum for:
X
DC VA
MD/County
WVA
Other
Addendum of Clauses (DC/MD)
Contingency Clauses (NVAR)
Condo/Coop Addendum
Dual Agency Form
Designated Agency Form
FHA Home Inspection Notice
Home Inspection Contingency
Lead Based Paint Disclosure
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
Lead Based Paint Inspection Contingency
Pre-Settlement Occupancy
Post-Settlement Occupancy
Property Disclosure or Disclaimer
Radon Testing Contingency
Sale of Home Contingency
Seller Held Trust
Well and Septic Contingency
Other (specify) :
33. HOME WARRANTY
Yes
No
Home Warranty Policy paid for and provided at Settlement by:
Cost not to exceed $
Purchaser or Seller.
. Warranty provider to be
Page 9 of 10
Page 18
34. OTHER TERMS
35. ENTIRE AGREEMENT This Contract will be binding upon the parties, and each of their respective heirs,
executors, administrators, successors and permitted assigns. The provisions not satisfied at Settlement will survive
the delivery of the deed and will not be merged therein. This Contract, unless amended in writing, contains the final
and entire agreement of the parties and the parties will not be bound by any terms, conditions, oral statements,
warranties or representations not herein contained. The interpretation of this Contract will be governed by the laws of
the jurisdiction where the Property is located.
SELLER:
______ /
Date
Signature
______/
Date
Signature
(SEAL)
PURCHASER:
/ _______________________________ (SEAL)
Date
Signature
(SEAL)
Date
/ _______________________________ (SEAL)
Signature
Date of Ratification see paragraph #29 (DEFINITIONS)
*************************************************************************************************
For information purposes only:
Listing Company’s Name and Address:
Selling Company’s Name and Address:
_______________________________________________
_____________________________________________
_______________________________________________
_____________________________________________
FAX #
Office #
Office #
FAX #
MRIS Broker Code and Office ID
MRIS Broker Code and Office ID
Agent Name
Agent Name
_______________________________________________
Real Estate License Number & Jurisdiction
_____________________________________________
Real Estate License Number & Jurisdiction
Agent MRIS ID#
Agent MRIS ID# _______________________________
Team Leader/Agent
Team Leader/Agent
Agent Email Address _____________________________
Agent Email Address ________________________
©2009. This is a suggested form owned by certain REALTOR® Associations ("Associations"). This form has been
created and printed exclusively for the use of REALTORS® and members of the Associations, who may copy or
otherwise reproduce this form in identical form with the addition of their company logo and with any other changes
being set forth in a clearly marked separate addendum. Any other use of this form is prohibited without prior written
authorized consent of the Associations.
Page 10 of 10
Page 19
December 1, 2010
Paul Purchaser
Sue Seller
123 Happy Trails Court, Fairfax, Virginia
Page 20
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RGS TITLE LLC
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Page 44
T
THE
MORTGAGE
LOAN
PROCESS
he majority of home purchases
involve financing obtained from an
institutional lending source. Whether
that source is a mortgage loan broker, a
federal savings bank or the bank you’ve
been associated with your entire “banking life”, you, as the borrower, will be
required to supply that lender with a
myriad of documents and a seemingly
endless flow of information. The purpose
of obtaining this information is to document and support your request that the
lender invest its money for your purchase
of a new home.
Throughout the mortgage loan process
you will be assisted by various representatives of the lender who are responsible
for compiling your personal financial
information and for presenting that
information in a manner that will best
support your request for financing.
Generally, the first person you will deal
with will be the mortgage loan officer or
mortgage banker, who will help you complete a loan application and provide you
with a list of documents you will need to
provide the lender. Following, you will
find a list of documents which are typically required for loan approval. You may
wish to collect these documents prior to
loan application to expedite the approval
process. This list is not all inclusive, but
does include the basic documents
required to support your application.
Assisting you and the loan officer will
be the loan processor. The processor’s
role is to oversee your loan application as
it proceeds toward loan approval and to
manage your file. The processor is
responsible for obtaining documentation
from you, from the credit bureau, the
appraiser, your insurance company as
well as others. It is important that you
communicate with the processor on a
frequent basis and provide requested
information in a timely fashion. Your
ability to communicate with the lender
and to quickly provide needed documentation will expedite the loan approval
process.
On page 46 you will find a flow chart
which will familiarize you with the general path that your loan will follow. It is
important to be aware that although the
time frames noted are estimates they can
be greatly delayed if you, the borrower,
do not provide complete and accurate
information.
The loan officer and processor are
bound by guidelines set by both the
lender’s risk assessors (“underwriters”) as
well as guidelines imposed by mortgage
regulating authorities known as “Fannie
Mae” and “Freddie Mac” as well as VA and
HUD. Your loan officer and loan processor
will interpret these guidelines for you so
that they may be quickly satisfied.
ITEMS NEEDED FOR
LOAN APPLICATION
• Social Security number of all applicants.
• Complete address for the past 7
years (including complete name and
address of landlords for past 24
months).
• Name, address, and all income
earned from all employers for past
24 months.
• Copies of previous two years’ W-2
forms.
• Copy of most recent year-to-date pay
stub.
• Name, address, account number,
monthly payment and current balance for: installment loans, revolving
charge accounts, student loans,
mortgage loans, and auto loans.
• Name, address, account number, and
balance of all deposit accounts,
including: checking account, savings
accounts, stocks, bonds, etc.
• Three months’ most recent statements for deposit accounts, stocks,
etc.
Page 45
• If you choose to include income
from Child Support/Alimony bring
copies of court records or cancelled
checks showing receipt of payment.
• Any debt owed on properties,
Lender’s name, address, account
number, monthly payment, and current balance.
If you are applying for a V.A.* Loan:
• Copy of previous two years Federal
Income Tax Returns with all schedules.
• DD-214, Certificate of Eligibility, or
statement from your Commanding
Officer if you are on active duty.
• If rented, copy of lease.
If you are self-employed or paid by
commission:
If you have filed bankruptcy in the last
seven years:
• Previous two years’ Federal Income
Tax Returns with all schedules and a
year-to-date profit and loss statement.
• Copy of petition and discharge,
handwritten explanation of the reason for bankruptcy.
If you own other properties:
*A loan insured by the Veteran’s Administration.
• Address of properties and current
market value.
ESTIMATE YOUR MORTGAGE PAYMENT
Multiply your monthly payment per thousand by the number of thousands you plan to borrow.
Interest
Rate
4.25%
4.5%
4.75%
5.0%
5.25%
5.5%
5.75%
6.0%
6.25%
6.5%
6.75%
7.0%
7.25%
7.5%
7.75%
8.0%
8.25%
8.5%
8.75%
9.0%
Monthly Payment
Per Thousand Dollars
15 years
20 years
30 years
$7.53
7.65
7.78
7.91
8.04
8.18
8.31
8.44
8.58
8.72
8.85
8.99
9.13
9.27
9.41
9.56
9.70
9.85
9.99
10.14
$6.21
6.34
6.48
6.60
6.74
6.89
7.03
7.17
7.32
7.46
7.61
7.75
7.90
8.06
8.21
8.36
8.52
8.68
8.84
9.00
$4.93
5.08
5.22
5.37
5.53
5.69
5.84
6.00
6.16
6.33
6.49
6.65
6.82
6.99
7.16
7.34
7.51
7.69
7.87
8.05
Interest
Rate
Monthly Payment
Per Thousand Dollars
15 years
9.25%
9.5%
9.75%
10.0%
10.25%
10.5%
10.75%
11.0%
11.25%
11.5%
11.75%
12.0%
12.25%
12.5%
12.75%
13.0%
13.25%
13.5%
13.75%
14.0%
$10.29
10.44
10.60
10.75
10.91
11.06
11.22
11.37
11.53
11.69
11.85
12.01
12.17
12.33
12.49
12.66
12.82
12.99
13.16
13.32
20 years 30 years
$9.16
9.32
9.49
9.66
9.82
9.99
10.16
10.33
10.50
10.67
10.84
11.02
11.19
11.37
11.54
11.72
11.90
12.08
12.26
12.44
$8.23
8.41
8.60
8.78
8.97
9.15
9.34
9.53
9.72
9.91
10.10
10.29
10.48
10.68
10.87
11.07
11.26
11.46
11.66
11.85
THE
MORTGAGE
LOAN
PROCESS
Page 46
Precise steps may vary from lender to lender, and time frames are estimates only.
WHAT CAN YOU AFFORD?
To be considered for a mortgage, you
generally have to meet two conditions
before your lender checks your credit:
you must be able to handle the monthly
payments of principal, interest, taxes and
insurance (PITI), and you must have an
Page 47
adequate down payment. Below is a rough
guideline of what you can afford and how
lenders make this decision. Check the
newspapers or with your real estate agent
to determine the prevailing rates, required
down payment percentages, and loan
terms.
AFFORDABLE MORTGAGE AMOUNT
Column A
Annual income before taxes
Divide by number of months
Monthly gross income
Record it in both columns. Perform
operations only on figures in the same
vertical columns.
$____________
÷12
$____________
Column B
$____________
÷12
$____________
Many lenders will not allow you to spend
more than 28% of your monthly gross
income on housing expenses: (column B)
x .28
_____________
Maximum monthly housing expense
allowance: (column B)
=$ __________
Many lenders allow 36% of monthly gross
income for long-term debt:
Long-term monthly expense allowance:
Figure out your total monthly long-term
obligations below, and subtract it
from the allowance:
child support
$ _________
auto loan
$ _________
credit cards
$ _________
association fees
$ _________
other
$ _________
Total long-term obligations
x .36
_____________
=$____________
Less $____________
=$ ___________
Look at the last amount in each column above. Record the smaller amount: $ __________
About 20% of the housing expense allowance is for taxes and insurance,
leaving 80% for payment of mortgage (principal and interest):
x .80
__________
Allowable monthly principal and interest (PI) expense:
=$ __________
Divide by monthly payment per thousand dollars on page 45
÷ __________
=$ __________
x 1,000
__________
=$ __________
Multiply by $1,000 to find what the Lender will lend
In addition to the mortgage you borrow from a lender, normally you will be
required to make a down payment—a
percentage of the purchase price you
must pay in cash. A standard down payment is 20 percent of the purchase price,
but it could be almost any amount, depending on the requirements of your lender. You
can afford a house that is the total of your
affordable mortgage amount plus the down
payment and closing costs.
THE
MORTGAGE
LOAN
PROCESS
Page 48
FINDING THE CASH
loan against future tax refunds (items 1
and 2). There are other sources too
(items 3 through 10). Verify your options
with your tax consultant, mortgage
lender, and real estate professional.
Hidden assets can put a down payment
and closing costs within your reach. Even
if you don’t have the cash now, your
friends and family may make an informal
FINDING THE CASH
Get a refund on your income tax for your monthly mortgage payment. In this example,
we’ll use a person in the 33% tax bracket who meets the standard deduction, borrows
$200,000 at 7.00% interest for 30 years, and closes on May 30.
$1161.30 Avg. monthly interest, first 12 mo.
THE
MORTGAGE
LOAN
PROCESS
x .33 Tax rate (10, 15, 25, 27, 33
or 35% in 2006)
=$383.23 Avg. monthly tax break, first
12 mo.
x 7 No. of payments, first tax year
=$2682.61 Additional refund possible
for new buyer
Informal loan against tax refund
$ _________ Avg. monthly interest, first
12 mo.
x _________ Tax rate
=$ _________ Avg. monthly tax break, first
12 mo.
x _________ No. of payments, first tax year
=$ _________ Additional refund possible
__________ for new buyer
$ ____________
Take a first-year tax deduction for points paid on a mortgage. In this example, we’ll use
a person in the 33% tax bracket who meets the standard deduction, and who pays 3.5
points to borrow $75,000.
$75,000
x .035
=$2,625
x .33
Total mortgage amount
Points (if 3.5, multiply by .035)
Deduction for points
Tax rate (10, 15, 25, 27, 33
or 35% in 2006)
=$866.25 Additional refund possible
for new buyer
$ _________ Total mortgage amount
x _________ Points
=$ _________ Deduction for points
x _________ Tax rate
=$ _________ Additional refund possible
__________ for new buyer
Informal loan against tax refund
$ ____________
First-time buyers: keep abreast of the news, as there may be special
programs designed to help you
$ ____________
State-run programs, deductions, and tax credits
$ ____________
Your employer may have a program to help valued workers buy a home
$ _____________
Money in savings
$ ____________
Sell something of value, such as a boat or car
$ ____________
Loan from a relative or friend
$ ____________
Borrow against a life-insurance policy or pension fund
$ ____________
Cash in an IRA prematurely (consult a tax expert, first)
$ ____________
TOTAL “HIDDEN” FUNDS
$ ____________
A
fter the contract has been ratified
and the loan has been approved, you
and the Seller will attend settlement to
complete the sale. At settlement you will
sign your loan documents and pay the
Seller and the Seller in turn, will deed the
property to you.
BEFORE SETTLEMENT
When RGS TITLE receives your contract from your real estate agent, we do
the following (as required by your contract or lender):
(1) Order title abstract and survey
(2) Review title abstract and survey to
determine marketability and insurability
(3) Contact your lender to schedule settlement and prepare any required documents
(4) Contact the Seller’s lender to obtain
the amount needed to pay off the Seller’s
existing loan(s)
(5) Prepare title insurance commitment
pursuant to Lender requirements
(6) Contact the local taxing authority to
verify the amount of property taxes and
determine prorations between Buyer and
Seller
(7) Contact Homeowner’s Association to
verify the amount of homeowner’s dues
and determine prorations between Buyer
and Seller
(8) Obtain the lender’s loan documents
and proceeds check
(9) Prepare the settlement sheet and any
other required documents.
On the day prior to settlement, you
should contact us to determine the
amount of money you will need. Your
contract requires that funds be in the
form of a cashier’s or certified check or
by bank-wired funds which MUST be
received by our office PRIOR to settlement in order to comply with state law
and your loan conditions. The check
should be made payable to RGS TITLE.
Also, your lender will require you to provide evidence of homeowners’ insurance
prior to settlement. Please also check with
your loan processor prior to settlement to
Page 49
see if you are required to bring any documents to settlement.
DURING SETTLEMENT
A settlement at RGS TITLE will be
conducted by an attorney or licensed settlement agent. We will go through the settlement documents as you sign them,
explaining the purpose of each. Since
many of the documents you will be signing at settlement need to be notarized,
you will need to bring to settlement a
current form of identification containing
your picture. Examples of acceptable
forms of identification include driver’s
licenses or passports. This process usually takes 45 minutes to an hour. If any
problems arise during settlement, we will
assist the parties in reaching an agreement. An attorney with Shreves Schudel
Saunders Jackson Clarke & Parello,
PLLC, General Counsel to RGS TITLE,
will be available to conduct the settlement or to assist in the resolution of disputes that may arise during settlement.
Unless you are assuming an existing
loan or paying cash, you will be signing
quite a few documents at settlement. The
following are examples and explanations
of the documents you will typically see.
HUD-1 SETTLEMENT STATEMENT
The first document you will review and
sign is the HUD-1 Settlement Statement.
This form details all the charges and
credits to the Buyer and Seller. The Buyer’s
figures are on the left-hand side of the
page, the Seller’s on the right. There is also
a page comparing the charge estimates
from the GFE to the actual charges from
page 2 of the HUD-1 statement, so the
borrower/buyer can easily see if the lender
is within allowed tolerances. We have provided a sample of this document for your
review on the following pages.
After signing the settlement sheet, you
will review and sign numerous other documents. Here are some of the forms seen
in most settlements.
HOUSE LOCATION SURVEY
If the home you are purchasing is a single family detached home or a townhouse,
SETTLEMENT
Page 50
your lender may require that you obtain a
House Location Survey.
This document is prepared by a
licensed surveyor for the purpose of showing the location of the improvements
(structures within the boundaries of the
property). RGS TITLE will arrange for
this document to be prepared on your
behalf and will submit it to your lender.
You will receive copies of the survey at
settlement.
LOAN APPLICATION
NOTE
FLOOD INSURANCE
The Note is your agreement to repay
the borrowed funds to your lender. This
document will detail terms and conditions
of your loan and the manner and form of
repayment of the borrowed funds.
This document will inform you
whether your home is located in a flood
zone. If it is, the lender will require you to
carry flood insurance on the property. If it
is not, as is usually the case, the form will
inform you that if the Federal
Government ever deems your property to
be within a flood zone, the lender will
require you to obtain flood insurance.
DEED OF TRUST
SETTLEMENT
This document is a standardized security instrument filed at the courthouse to
establish the lender’s lien on the property
for the original principal amount of the
loan. The deed of trust secures the home
as the collateral for the repayment of the
loan. This document provides that in the
event of default or non-payment, the
lender may direct the trustees to foreclose
on the property in order to recoup the
loan proceeds.
FIRST PAYMENT LETTER
This document gives a breakdown of
the total amount of your monthly payment. The total monthly payment will
typically include principal and interest as
well as any escrow for taxes, hazard
insurance or mortgage insurance.
LOAN APPROVAL LETTER OR
LOAN COMMITMENT LETTER
This is a letter from the lender which
explains that your loan has been approved
on certain terms and subject to certain
requirements. The letter will state the
terms of the loan, i.e., loan amount, interest rate, length of the loan. The lender will
also list any additional requirements, such
as a hazard insurance policy naming the
lender as mortgagee, a survey or a termite
report.
You may be asked to sign a printed
copy of the loan application. This typed
form is a confirmation of the form the
loan officer filled out when you applied
for the loan. The lender is asking you to
verify that the information is substantially
correct, and that there have been no
material changes in your employment,
marital or financial status.
NAME AFFIDAVIT
By signing this document you certify to
the lender that you are known by all the
variations of your name that the Lender
has found on the credit report or other
documents used in processing your loan.
SIGNATURE AFFIDAVIT
Your lender may require you to sign a
statement that your signature on the loan
documents is your legal signature, and
that you agree to be bound by documents
with this signature.
TAX AUTHORIZATION
Some lenders have you sign written
instructions to the local real estate taxing
authority authorizing it to send the tax
bill directly to the lender who is holding
money in escrow for payment of that bill.
TERMITE INSPECTION
You will be asked to acknowledge receipt
of a copy of the termite inspection report.
This report is prepared by a licensed exterminator and indicates whether any evidence of infestation has been discovered.
Page 51
TRUTH-IN-LENDING STATEMENT
AFTER SETTLEMENT
The Truth-in-Lending disclosure is
required by Federal law to be provided to
each borrower. The purpose of this document is to disclose to the borrower an
estimate of the annual cost as well as the
total cost of the loan over the full term of
that loan, factoring in all costs and fees
incurred in placing the loan. Below is a
detailed explanation of this form.
In order to complete the process of settlement, we do the following, as required: (1)
record the deed, deed of trust or assumption
documents in the land records at the county
courthouse, (2) audit the disbursement
sheet, (3) disburse all proceeds, (4) issue the
title insurance policy, (5) send the lender the
packet of all signed documents, (6) pay off
the Seller’s lender, if any, and obtain and
record a release of the Seller’s deeds of trust,
and (7) disburse any funds required to be
escrowed at closing.
W-9
This is an IRS form giving your social
security number and new mailing
address. You fill this out so that at tax
time you can deduct the interest you pay
to the lender.
TRUTH-IN-LENDING
ANNUAL
PERCENTAGE
RATE
The cost of your credit
at a yearly rate.
A%
FINANCE
CHARGE
The dollar amount the
credit will cost you.
$
B
Amount Financed
Total of Payments
The amount of credit
provided to you or on
your behalf.
The amount you will
have paid after you
have made all payments as scheduled.
$C
$D
Q. What is a Truth-in-Lending Disclosure
and why do I receive it?
A. The Disclosure is designed to give you information about the costs of your loan so that you
may compare these costs with those of other
loan programs or lenders.
and a fixed interest rate of 12%, the payments
would be $514.31 (principal and interest). Since
the A.P.R. is based on the Amount Financed
($48,000), while the payment is based on the
actual loan amount given ($50,000), the A.P.R.
(12.553%) is higher than the interest rate.
Q. What is the Annual Percentage Rate?
(Box A above.)
A. The Annual Percentage Rate (A.P.R.) is the
cost of your credit expressed as an annual rate.
Because you may be paying loan discount
“points” and other “prepaid” finance charges at
closing, the A.P.R. disclosed is often higher
than the interest rate of your loan. This A.P.R.
can be compared to the A.P.R. on other loan
programs to give you a consistent means of
comparing rates and programs.
Q. What is the finance charge? (Box B.)
A. The Finance Charge is the cost of credit
expressed in dollars. It is the total amount of
interest calculated at the interest rate over the
life of the loan, plus Prepaid Finance Charges
and the total amount of any required mortgage
insurance charged over the life of the loan.
Q. Why is the Annual Percentage Rate different from the interest rate for which I
applied?
A. The A.P.R. is computed from the Amount
Financed and based on what your proposed payments will be on the actual loan amount credited to you at settlement. In a $50,000 loan with
$2,000 Prepaid Finance Charges, a 30-year term,
Q. What is the Amount Financed? (Box C.)
A. The Amount Financed is the loan amount
applied for, minus the Prepaid Finance Charges.
Prepaid Finance Charges include items paid at
or before settlement, such as loan origination,
commitment or discount fees (“points”), adjusted interest, and initial mortgage insurance premium. The Amount Financed is lower than the
amount you applied for because it represents a
NET figure. If you applied for $50,000 and the
Prepaid Financed Charges total $2,000, the
Amount Financed would be $48,000.
SETTLEMENT
Page 52
OMB No. 2502-0265
A. Settlement Statement (HUD-1)
B. Type of Loan
1. ® FHA 2. ® RHS
4. ® VA
5. ® Conv Ins.
7. ® Cash Sale.
3. ® Conv Unins
6. ® Seller Fin
7. Loan Number
6. File Number
QTSHomeBuyer
8. Mortgage Ins Case Number
C. Note: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked
"(p.o.c.)" were paid outside the closing; they are shown here for informational purposes and are not included in the totals.
D. Name & Address of Borrower
E. Name & Address of Seller
F. Name & Address of Lender
Paul PURCHASER
Sue SELLER
Mortgage Lender
123 Happy Trails
548 Forwarding Lane
Fairfax, VA 22222
Lansing, MI 48915
,
G. Property Location
Subdivision of Anywhere Estates, Lot 1, Block A,
Fairfax, VA
123 Happy Trails
Fairfax, VA 22222
Sales price
per contract
H. Settlement Agent Name
RGS Title, LLC
Underwritten By: Stewart - VA - RGS Title, LLC
Place of Settlement
RGS Title, LLC
1801 Old Reston Avenue, Suite 100
Reston, VA 20190
J. Summary of Borrower's Transaction
K. Summary of Seller's Transaction
100. Gross Amount Due from Borrower
400. Gross Amount Due to Seller
101. Contract sales price
These charges are
itemized on the
second sheet.
Gross amount due
(before credits)
The amount of the
deposit you
submitted with
your original
contract offer
$200,000.00
102. Personal property
103. Settlement charges to borrower
$8,418.60
403.
404.
105.
Adjustments for items paid by seller in advance
106. City property taxes
405.
Adjustments for items paid by seller in advance
107. County property taxes
108. Assessment Taxes
109. School property taxes
110. HOA Dues
111. Other taxes
410. HOA Dues
112.
411. Other taxes
412.
113.
413.
Gross amount due
to seller.
These charges are
itemized on the
second sheet.
414.
114.
415.
115.
116.
120. Gross Amount Due From Borrower
200. Amounts Paid By Or in Behalf Of Borrower
201. Deposit or earnest money
416.
$208,418.60
$5,000.00
$160,000.00
420. Gross Amount Due to Seller
500. Reductions in Amount Due to Seller
502. Settlement charges to seller (line 1400)
503. Existing loan(s) taken subject to
204.
504. Payoff of first mortgage loan
205.
505. Payoff of second mortgage loan
207. Closing Cost Credit
$2,000.00
208.
209.
$200,000.00
501. Excess deposit (see instructions)
203. Existing loan(s) taken subject to
$7,920.50
$86,000.00
506. Earnest Money Retained by Realtor
$5,000.00
507. Closing Cost Credit
$2,000.00
508.
509.
Adjustments for items unpaid by seller
Adjustments for items unpaid by seller
You or your lender
will pay the tax
bill when it is due.
Here the seller is
giving you a credit
for the time he/she
owned the house.
$200,000.00
104.
206.
Credit for your
costs as agreed to
be paid by Seller
in your contract.
401. Contract sales price
Contract sales price
402. Personal property
202. Principal amount of new loan(s)
Your loan amount
I. Settlement Date
1/21/2011
Fund:
01/01/11 to 01/21/11
$168.70
214. HOA Dues
215. Other taxes
216.
514. HOA Dues
515. Other taxes
516.
217.
517.
218.
518.
219.
519.
01/01/11 to 01/21/11
$168.70
220. Total Paid By/For Borrower
300. Cash At Settlement From/To Borrower
$167,168.70
520. Total Reduction Amount Due Seller
600. Cash At Settlement To/From Seller
$101,089.20
301. Gross Amount due from borrower (line 120)
$208,418.60
601. Gross Amount due to seller (line 420)
$200,000.00
302. Less amounts paid by/for borrower (line 220)
$167,168.70
602. Less reductions in amt. due seller (line 520)
$101,089.20
303. Cash From Borrower
$41,249.90
603. Cash To Seller
This amount will be due at settlement.
Please bring a certified or cashier’s check
or initiate a bank wire prior to settlement.
U.S. Department of Housing and Urban Development
Page 1 of 3
$98,910.80
Cash amount to seller
HUD-1
This is the principal balance of the
loan plus all
accrued, unpaid
interest.
Amount of earnest
money deposit
retained by agent
as part of commission paid.
Credit for your
costs as agreed to
be paid by Seller in
your contract.
Credit to the
purchaser for
real estate taxes
accrued during
that portion of the
year when the
seller owned the
property.
Page 53
Total real estate
commission paid.
See lines 201/506—
Balance of commission paid outside
closing from deposit
held by broker.
Total lender/mortgage
broker fees for processing and underwriting to originate
your loan.
May be a credit or a
charge for “Points”
and any mortgage
broker credits—each
point is 1% of the
loan amount* and
may appear here or
as part of line 801.*
Net adjusted Loan
Origination Charge
(sum of Lines
801 and 802).
L. Settlement Charges
700. Total Real Estate Broker Fees
Division of Commission (line 700) as follows:
Includes all charges
required to issue title
insurance (e.g., title
search and examination, binder fee,
courier fees for documents to and from
your lender and for
recording), cost of
the lender’s title
insurance, and fee for
preparing closing
documents and conducting settlement.
In addition to your
principal and interest
payment, each month
you will pay these
amounts into your
lender’s escrow
account.
Borrower's
to Listing Agent's Company
Funds at
Funds at
702. $6,000.00
to Selling Agent's Company
Settlement
Settlement
703. Commission Paid at Settlement
(EMD $5,000 to Selling Agent's Company
704.
P.O.C.)
800.
801.
802.
803.
$0.00
$3,200.00
$0.00
804. Appraisal Fee
to
Appraisal Professionals
805. Credit report
to
Credit plus
806. Tax service
807. Flood certification
to
to
First American
FDSI
$7,000.00
(from GFE #1)
(from GFE #2)
(from GFE A)
$3,200.00
(from GFE #3)
$300.00
Prepaid interest—in
this case the first
mortgage payment
will be due 3/1/11. The
3/1/11 payment pays
for February interest.
January’s interest is
paid at closing.*
(from GFE #3)
POC (B) $55.00
(from GFE #3)
(from GFE #3)
$78.00
$14.00
(from GFE #10)
$192.94
Initial deposit to
escrow—total of all
section 1000 escrow
items, including any
aggregate adjustment
credit, line 1011.
900. Items Required by Lender To Be Paid in Advance
901. Daily interest charges from 1/21/2011 to 2/1/2011 @ $17.54/day
902. Mortgage Insurance Premium for months
903. Homeowner's insurance for years
to
to
POC (B) $560.00
(from GFE #3)
(from GFE #11)
1000. Reserves Deposited With Lender
1001. Initial Deposit for your escrow account
(from GFE #9)
1002. Homeowner's insurance
3 months @
$46.67 per month
$140.01
months @
per month
$0.00
1003. Mortgage insurance
months @
per month
$0.00
5 months @
$256.58 per month
$1,282.90
months @
per month
$0.00
months @
per month
$0.00
1008. HOA Dues
1009. Other taxes
per month
$0.00
0
months @
months @
0
months @
1010. Other taxes
1011. Aggregate Adjustment
$1,279.66
Seller charge for
preparing closing
documents and conducting settlement+.
$-143.25
1100. Title Charges
1101. Title services and lender's title insurance
to
RGS Title, LLC
1102. Settlement or closing fee
to
RGS Title, LLC
1103. Owner's title insurance
to
1104. Lender's title insurance
1105. Lender's title policy limit
(from GFE #4)
$1,209.00
RGS Title, LLC
(from GFE #5)
$616.00
to
RGS Title, LLC
$160,000.00/$464.00 .
$464.00
$200,000.00/$616.00 VA - Enh Own/Basic Loan
1106. Owner's title policy limit
1107. Agent's portion of the total title insurance premium
to
RGS Title, LLC
Stewart Title Guaranty
1108. Underwriter's portion of the total title insurance premium to
$250.00
$939.60
$140.40
1110. Delivery/Handling Service
Shreves,Schudel,
to Saunders, Jackson, Clarke
& Parello, PLLC
to RGS Title, LLC
1111. Prepare/Obtain Release Fee
to RGS Title, LLC
$125.00
1112. R-5 Compliance Fee
to RGS Title, LLC
$10.00
1113. File Archive Fee
to RGS Title, LLC
$25.00
1109. Document preparation
$195.00
$39.50
1201. Government recording charges
1202. Deed $33.00 ; Mortgage $46.00 , Release $0.00
$79.00
(from GFE #8)
$1,200.00
to Clerk of the
Court
1203. Transfer taxes
1206. Grantor's Tax
(from GFE #7)
Deed $166.67 ; Mortgage
to Clerk of the Court
$133.33
Deed $500.00 ; Mortgage
$400.00
1302. Survey Fee
1303. Pest Inspection
1304. Verify/Record Release Fee
$200.00
(from GFE #6)
to Surveyor
Termite and Pest
to
Company
to RGS Title, LLC
$250.00
Total county and
state recording
taxes.
This amount is
$1.00 per every
thousand dollars of
the sales price.
$45.00
$31.00
1400. Total Settlement Charges (enter on lines 103, Section J and 502, Section K)
County and state
recording fees and
tax stamps.
Fee to deliver papers
to and from your
lender+ and to the
court for recording.
We send the payoff by
overnight delivery or
wire. This way interest
stops on the loan as
soon as possible.
Permanent digital
record of all your
closing documents+.
1300. Additional Settlement Charges
1301. Required services you can shop for
You may use the attorneys at Shreves
Schudel Saunders
Jackson Clarke &
Parello PLLC or you
may choose your own
attorney. This is the
fee to prepare the legal
documents required
for closing+.
Fee for obtaining the
release of any note
secured by the
property+.
1200. Government Recording and Transfer Charges
1204. City/County tax/stamps
Real estate commission disbursed by
settlement agent.
to
Items Payable in Connection with Loan
Our origination charge (includes orgination point $1600)
Your credit or charge (points) for the specific interest rate chosen
Your adjusted origination charges
to Mortgage Lender
1205. State tax/stamps
Cost of Owner’s
coverage title
insurance premium.
Unlike most insurance, you only
pay for title
insurance once.*
Paid From
Seller's
701. $6,000.00
Fees charged for
other services
required to
prepare your loan.
Paid From
$12,000.00
A survey is recommended and
may be required by the lender or
title insurance company. RGS
Title will order the survey for you.
Page 2 of 3
$8,418.60
This amount is
shown on Line
103 of Page 1.
$7,920.50
This amount is
shown on Line
502 of Page 1.
HUD-1
+These fees are estimates only and are subject to change. Please call RGS TITLE for our current fees.
*These items may be tax deductible. Check with your accountant or tax attorney.
Fee for having the
property inspected for
termites.
Fee for recording the
release of existing liens
on the property.*
Page 54
Comparison of Good Faith Estimate (GFE) and HUD-1 Charges
Charges That Cannot Increase
HUD-1 Line Number
Our origination charge
# 801
Your credit or charge (points) for the specific interest rate chosen
# 802
Your adjusted origination charges
# 803
Transfer taxes
# 1203
Good Faith Estimate
$3,200.00
$0.00
$3,200.00
$1,200.00
$3,200.00
$0.00
$3,200.00
$1,200.00
Charges That in Total Cannot Increase More Than 10%
Government recording charges
Appraisal Fee
Credit report
Tax service
Flood certification
Good Faith Estimate
$80.00
$300.00
$30.00
$70.00
$15.00
HUD-1
$79.00
$300.00
$55.00
$78.00
$14.00
# 1201
# 804
# 805
# 806
# 807
Total
Increase between GFE and HUD-1 Charges
Charges That Can Change
Initial deposit for your escrow account
Daily interest charges
Homeowner's insurance
Title services and lender's title insurance
Owner's title insurance
# 1001
# 901 $17.54/day
# 903
# 1101
# 1103
$495.00
$31.00
HUD-1
$526.00
6.26%
or
Good Faith Estimate
$1,500.00
$250.00
$500.00
$900.00
$900.00
HUD-1
$1,279.66
$192.94
$560.00
$1,209.00
$616.00
Loan Terms
Your initial loan amount is
$160,000.00
Your loan term is
0 years
Your initial interest rate is
5.5%
Your initial monthly amount owed for principal, interest, and any mortgage
insurance is
$908.46 includes
x Principal
x Interest
o Mortgage Insurance
x No. ® Yes, it can rise to a maximum of 0%. The first change will be on
and can change again every after . Every change date, your interest rate can
increase or decrease by 0%. Over the life of the loan, your interest rate is
guaranteed to never be lower than 0% or higher than 0%.
Can your interest rate rise?
Even if you make payments on time, can your loan balance rise?
x No. ® Yes, it can rise to a maximum of $0.00
Even if you make payments on time, can your monthly
amount owed for principal, interest, and mortgage insurance rise?
x No. ® Yes, the first increase can be on and the monthly amount owed
Does your loan have a prepayment penalty?
x No. ® Yes, your maximum prepayment penalty is $0.00
Does your loan have a balloon payment?
x No. ® Yes, you have a balloon payment of $0.00 due in 0 years on
Total monthly amount owed including escrow account payments
® You do not have a monthly escrow payment for items, such as property
can rise to $0.00 The maximum it can ever rise to is $0.00
taxes and homeowner’s insurance. You must pay these items directly
yourself.
x You have an additional monthly escrow payment of $303.25
that results in a total initial monthly amount owed of $1,211.71. This
includes principal, interest, any mortgage insurance and any items checked
below:
x Property taxes
o Flood insurance
o
x Homeowner's Insurance
o
o
Note: If you have any questions about the Settlement Charges and Loan Terms listed on this form, please contact your lender.
INFORMATION ON THIS PAGE IS PROVIDED BY YOUR LENDER. It allows you to compare
actual HUD-1 settlement charges to the GFE provided by your lender and verify that they did not exceed
allowed tolerances. In addition it provides a summary of the basic terms of your loan and monthly payment.
Page 3 of 3
HUD-1
A
t settlement, you will be required to
have a certified or cashier’s check or
bank-wired funds for your settlement
costs. These costs will include the balance
of your down payment, charges from your
lender, the title company and government
recording fees. Every mortgage lender
structures charges to the borrower differently, and the allocation of specific charges
between the Buyer and Seller will depend
upon the type of loan and the allocation
agreed to in your sales contract. When you
apply for your loan, your lender will give
you a good faith estimate of closing costs
(GFE), on a standardized form, which will
include both the lender’s and title company’s charges as well as recording fees and
other charges for services required to close
your transaction. Keep in mind this is just
an estimate, and, while the lender is
required to disclose these charges and to
be accurate within certain tolerances, it
may not reflect the total amount of money
you need to bring to closing. Please call
RGS TITLE immediately prior to settlement to verify this amount.
We have provided a worksheet on the
next page to help you calculate the amount
of your settlement costs. We will be happy
to help you with any of these calculations—just call us. Below is an explanation
of some of the more common charges.
LENDER’S FEES
Points—each point is one percent of
the loan amount. For an FHA loan, the
origination fee is a percentage of the base
loan amount and the discount points are
based on the base loan amount plus the
mortgage insurance premium.
Document Preparation Fee—the fee the
lender charges to prepare the documents
that you will sign at settlement.
Tax Service Fee—the fee charged by the
lender for setting up a computerized tax
paying service.
PMI (Private Mortgage Insurance)—
generally charged by lenders on conventional loans when you are making a down
payment of less than 20% of the purchase
price of the property.
MIP (Mortgage Insurance Premium)—
for FHA loans. This is paid in a one-time
premium up front, plus monthly payments for the term of the loan.
Origination Charge—this term includes
all lender and mortgage broker fees for
Page 55
application, processing, underwriting,
document preparation, and other fees
required to originate the loan.
PLEASE NOTE—not all lenders
charge all these fees on every loan and
some lenders have other fees in certain
cases. YOU WILL WANT TO CONTACT
YOUR LENDER FOR THEIR FEES.
ESCROWS
An escrow is money that the lender will
hold until bills are received. Usually the
lender holds funds in escrow to pay the
hazard insurance and property taxes. To
determine the monthly amount, take the
annual amount of each bill and divide by
twelve. The estimate sheet tells you how
many months of each kind of escrow the
lender is likely to require at settlement.
TITLE CHARGES AND SETTLEMENT FEES
The following services are included
under the term “Title Charges”:
Settlement—one of the many services
RGS TITLE provides. We have documents prepared, conduct the settlement,
coordinate with the lender and all other
parties, disburse funds, record documents, procure and record releases of
existing liens, issue title insurance policies and more.
Title Search and Examination—a search
and review of the public land records to
verify ownership of property. This also
establishes the loans and other liens that
must be satisfied from the Seller’s proceeds at settlement.
Title Binder—a binder or commitment
to issue title insurance is required by your
lender to be provided to them prior to
closing.
Title Insurance Premium—The amount
paid for title insurance coverage based
upon loan amount and purchase price.
HUD requires that the premium for the
lender coverage be included with the Title
Charges. The premium for your coverage
as owner is shown separately.
Delivery—Lender and scheduling deadlines require documents that are part of
the process to be hand-carried to and
from the lender and to the courthouse.
BUYER’S
ESTIMATE OF
SETTLEMENT
CHARGES
Page 56
GOVERNMENT RECORDING
CHARGES
County and State Tax Stamps—The
various counties and the State of
Virginia each charge a transfer tax on
the recording of documents for the purchase of a home.
The District of Columbia and the various counties in Maryland charge varying
fees for each transfer of real property. In
the District of Columbia, the transfer and
recordation taxes total 2.9% of the sales
price with 1.45% being charged to each
party.* In Montgomery County, Maryland,
there is a transfer tax calculated at
$6.90/$1,000 of the purchase price up to
$500,000, after which it is $10.00 per
$1,000. The state of Maryland charges 1/2
of 1% for state stamps. These charges are
almost always split evenly by the parties.
*If the sales price is $400,000 or less and
the purchaser will make the property his/her
primary residence, then the total tax is 2.2%.
MARYLAND TRANSFER AND RECORDATION TAXES BY COUNTY
(AS OF 4/28/10)
COUNTY
BUYER’S
ESTIMATE OF
SETTLEMENT
CHARGES
Allegheny
Anne Arundel
Baltimore
Baltimore City
Calvert
Caroline
Carroll
Cecil
Charles
Dorchester
Frederick
Garrett
Harford
Howard
Kent
Montgomery
Prince George’s
Queen Anne’s
St. Mary’s
Somerset
Talbot
Washington
Wicomico
Worcester
COUNTY TRANSFER
TAX
0.500%
1.000%
1.500%
1.500%
none
0.50%
none
none
none
0.75%
none
1.00%
1.00%
1.00%
0.50%
1.00%
1.40%
0.50%
1.00%
none
1.00%
0.50%
none
0.50%
STATE TRANSFER
TAX
$6.50 per $1,000
$7.00 per $1,000
$5.00 per $1,000
$10.00 per $1,000
$10.00 per $1,000
$10.00 per $1,000
$10.00 per $1,000
$8.20 per $1,000
$10.00 per $1,000
$10.00 per $1,000
$12.00 per $1,000
$7.00 per $1,000
$6.60 per $1,000
$5.00 per $1,000
$6.60 per $1,000
$6.90 per $1,000**
$5.00 per $1,000
$9.90 per $1,000
$8.00 per $1,000
$6.60 per $1,000
$6.60 per $1,000
$7.60 per $1,000
$7.00 per $1,000
$6.60 per $1,000
STATE RECORDATION
TAX*
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
0.500%
*Reduced to 0.25% for First Time MD Homebuyers. (Seller will pay)
**Montgomery County; if over $500,000: $10.00 per $1,000.00.
PLEASE NOTE: Individual Counties and the City of Baltimore may have various Credits and
Exemptions that reduce the amounts reflected herein. Contact your local RGS Office for an explanation
of those Credit and Exemptions.
OTHER COSTS
Survey—the fee for a house location
survey showing the location of the
improvements within the boundaries of
the property.
Page 57
Homeowners’ Association or Condominium Fees—if applicable, this fee will
usually be the next month’s fee; in addition you will reimburse the Seller for
the portion of the month which follows
settlement.
BUYER’S SETTLEMENT COSTS WORKSHEET
1. Balance of Down Payment (Purchase price less
loan amount less earnest money deposit)
2. Lender’s Fees (Call your lender for an estimate)
1) Origination Fee and Discount Points to be paid by
Buyer (One point is one percentage point of the loan amount)
2) Document Preparation Fee
3) Tax Service Fee
4) First-year PMI Premium or FHA MIP, if any
5) Other Fees
3. Escrows (Annual Rate divided by 12 equals the monthly escrow)
1) Homeowner’s Insurance (2 months)
2) PMI (2 months)
3) Real Estate Tax (Includes reimbursement to Seller of prepaid
taxes, up to 8 months in counties that require payment of taxes
twice a year, up to 14 months in counties that require payment
of taxes once a year)
4. Settlement Fees (Call RGS TITLE for an estimate)
1) Settlement Services
2) Title Examination
3) Title Insurance Premium
4) Miscellaneous Fees (messenger, copies)
5. Governmental Recording Charges
A) Virginia Recording Fees
1) Recordation of Deed and Deed of Trust (Estimated at $79.00)
2) County Transfer Tax (.08333% of the Sales Price plus loan amount)
3) State Transfer Tax (.25% of the Sales Price plus loan amount)
B) Montgomery County, MD Recording Fees (Payment allocation for
these taxes is negotiable and will be determined by Contract Terms)
1) Recordation of Deed and Deed of Trust (Estimated at $80.00)
2) County Recordation Tax (____ per $1,000 of the Sales Price)
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
_______________
________________
________________
(See chart on page 56.)
3) State Transfer Tax (_____ of 1% of the Sales Price)
________________
4) County Transfer Tax (____ of 1% of Sales Price)
________________
C) Washington, DC Recording Fees
1) Recordation of Deed and Deed of Trust (Estimate at $175.00)
2) DC Transfer & Recordation Taxes (1.45% of purchase price if
over $400,000; if under: 1%)
6. Other Costs
1) Survey
2) Homeowners’ or Condo Fees
3) Miscellaneous
TOTAL ESTIMATED CHARGES
________________
________________
________________
_______________
_______________
_______________
_______________
This is simply an estimate. Please call us to verify this amount and then bring to settlement a cashier’s or certified check made payable to RGS TITLE in the appropriate
amount.
BUYER’S
ESTIMATE OF
SETTLEMENT
CHARGES
Page 58
SELLER’S SETTLEMENT COSTS WORKSHEET
AMOUNTS DUE TO SELLER:
Contract Sales Price ……………………………………………………………………$_________
Property tax and other escrow funds held by your mortgage lender (usually
refunded by the Lender one month after settlement) ……………………………$_________
Prorated portion of paid-up property taxes…………………………………………$_________
Prorated portion of paid-up homeowner’s dues ……………………………………$_________
Other ……………………………………………………………………………………$_________
GROSS AMOUNT DUE TO SELLER …………………………………………$ ________
AMOUNTS DUE FROM SELLER:
Brokerage commission (Generally 6% of the sales price) ………………………$_________
Fee to Title Company …………………………………………………………………$_________
Attorney’s Fees (For document preparation) ………………………………………$_________
Recording Fees (Usually $31.00 to release each existing lien) …………………$_________
State Grantor’s Tax (Indicates $1.00 per thousand of sales price
for all Virginia jurisdictions) ………………………………………………………$_________
Maryland
County Recordation Tax (_____ per $1,000 of the Sales Price) ………………$_________
See chart on page 56.
State Transfer Tax (______ of 1% of the Sales Price)……………………………$_________
BUYER’S
ESTIMATE OF
SETTLEMENT
CHARGES
County Transfer Tax (______ of 1% of the Sales Price)…………………………$_________
(•Contract terms will stipulate what portion/percentage of these fees/taxes seller will pay.)
Washington, DC
DC Transfer Tax (1.45% of Sales Price over $400,000; if under: 1.1%)………$_________
Special inspections you’ve agreed to pay for ………………………………………$_________
Closing Cost Credit if you’ve agreed to pay them in the contract ………………$_________
Balance of any indebtedness secured by the property ……………………………$_________
Other charges……………………………………………………………………………$_________
TOTAL PAID BY SELLER ………………………………………………………$ ________
Net Amount Due to Seller:
Gross Amount Due (from above) ………………………$_________
Less: Total Paid (from above) ……………………………$_________
Net Amount Due …………………………………………$ ________
Under Virginia Law, the Seller cannot receive any proceeds from the sale of the property
until the Deed and Security Instruments have been recorded. This will be done within fortyeight hours after settlement. If you wish to have your funds wired to you, be sure to bring to
settlement a voided check from the account to which you would like your proceeds wired. If
you are required to bring money to settlement, make sure it is in the form of a Certified or
Cashier’s check or that you initiate a bank wire prior to settlement.
WHAT IS TITLE INSURANCE?
B
efore answering “what is title insurance” it might be best to first answer
“what is title?” “Title” is the ownership in
real property. Among other things, it
means that you have the legal right to possess, occupy, peacefully enjoy and sell your
property without interference from others,
subject only to restrictions imposed by
governmental authorities or previous owners. In most cases, title is transferred by
deed which is recorded in the land records
of the county in which the property is
located. Generally, when property is sold,
an attorney for the Buyer or title examiner
goes to the record room and searches the
land records for any title defects. A title
defect is anything in the entire history of
ownership of a piece of real estate which
may encumber the owner’s rights under
the title. A title defect may cause the
owner of real property to lose all or part of
his land to a superior ownership interest
or claim of another. This is the type of loss
which title insurance protects against. In
short, if you own a title insurance policy,
the title insurance company will defend
you, without cost, against an attack or
claim upon your ownership interest in
your property as insured and you will be
protected against financial loss caused by
a title defect.
If my title has been examined, why
isn’t that enough?
There are many defects which even the
most meticulous search of the land records
will not uncover. For instance, it is impossible for an examiner to know whether the
marital rights of all previous owners have
been relinquished; whether all deeds, mortgages and judgments affecting the property
have been properly indexed in the land
records; whether all signatures are valid; or
whether an unknown heir of a previous
owner has a valid claim against the property. Without owner’s title insurance you may
have no avenue of recovery for these types
of problems.
If I am required to purchase lender’s
insurance, why do I need owner’s
coverage as well?
In almost every instance, a lender will
require you to purchase lender’s title
insurance protecting it up to the value of
Page 59
its loan on the property. This coverage
only protects the lender, not you, and the
coverage diminishes as the loan is paid
off. As you build more equity in the property, you expose yourself to a higher risk
of loss occasioned by a title defect. In this
situation the protected lender will suffer
no loss while you bear the substantial risk
of the damage. Owner’s title insurance
will protect you against any covered loss
from failure of title up to the full amount
of the policy.
IMPORTANT REASONS WHY YOU
SHOULD HAVE IT
Owner’s Title Insurance will protect
you against those hidden risks which
would not be disclosed by even the most
meticulous search of public records.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Forgery.
Fraud in connection with execution
of documents.
Undue influence on a grantor or
executor.
False personation by those purporting to be owners of property.
Incorrect representation of marital
status of grantors.
Undisclosed or missing heirs.
Wills not properly probated.
Mistaken interpretation of wills and
trusts.
Mental incompetence of grantors.
Conveyance by a minor.
Birth of heirs subsequent to date of
will.
Inadequate surveys.
Incorrect legal descriptions.
Non-delivery of deeds.
Unsatisfied claims not shown on
record.
Deeds executed under expired or
false powers of attorney.
Confusion due to similar or identical
names.
Dower or curtesy rights of ex-spouses
of former owners.
Incorrect indexing.
Clerical errors in recording legal
documents.
Delivery of deeds after death of
grantor.
OWNER’S
TITLE
INSURANCE
Page 60
B
uying a new home could be the single most important investment you
will make. It is critical that you understand the process and your options so
that you can make an informed and well
reasoned decision on every aspect of the
home buying process. That is why we
have provided you with this Guide. Your
choice of real estate agent, loan officer
and title company is as important as your
choice of which home to buy. Finding the
right professionals who understand your
needs, preferences and resources can
make the difference in whether your
experience is smooth and efficient or
lengthy and plagued with problems.
Do your research—it will be worth the
effort. Talk to your friends and business
associates for referrals. Your real estate
agent can also make you aware of a
lender and title company who have done
a “good job” for them in the past and who
will meet your needs and give you the
excellent service you deserve.
At RGS TITLE, we welcome your
questions. Not only are we happy to
answer questions regarding our fees, or
the services we perform, but we can also
help you understand or solve most of the
problems which can occur during the
home buying process.
YOUR SEARCH FOR
A SETTLEMENT COMPANY
IN
CLOSING. . .
When choosing a title/settlement company, don’t just compare prices—compare
services. Most title companies will offer a
basic range of services. These “basics”
include preparation and recordation of
the closing documents and disbursement
of funds. Title companies who only offer
these basic services may be cheaper—or
they may not be—but you need to ask
yourself whether your best interest will be
served by cutting corners. So ask questions: Will the title company work with
your lender to avoid scheduling problems,
to make sure all title and survey requirements are met, and to resolve any unexpected loan charges at settlement? Will
the title company work with your real
estate agent to ensure compliance with
the sales contract and to alert them to
any potential title or survey problems?
Will the title company work with you to
answer questions you have about the
closing documents or the settlement
process and provide you with your final
settlement charges as soon as possible
before settlement? How experienced is
the company? Will they be available in
the future long after your settlement has
taken place? Finally, you should ask, is
the title company represented by legal
counsel who is available to you and your
real estate agent to help avoid or resolve
the many legal problems which occur
during the home buying process?
The attorneys who conduct settlements
at RGS TITLE are not employed by RGS
TITLE. They are employed by the law
firm of Shreves Schudel Saunders
Jackson Clarke & Parello, PLLC, our general counsel. They are experienced in real
estate law and have dealt with the issues
that arise in the home buying process.
For that reason, many of the areas top
real estate agents have come to rely on
RGS TITLE and our general counsel.
At RGS TITLE, we draw on the experience of our professional staff to make
sure we offer you the services you need to
ensure a smooth and efficient settlement.
In each and every aspect of the closing
process, we are committed to excellent
service. We believe that is essential for an
investment as important as your new
home.
RGS TITLE
BETHESDA...................................(301) 654-9800
.................................................(301) 654-8598 FAX
BOWIE ...........................................(301) 809-0011
...................................................(301) ???-???? FAX
ROCKVILLE..................................(301) 230-0070
.................................................(301) 230-2536 FAX
SILVER SPRING ..........................(301) 680-0200
.................................................(301) 680-2043 FAX
WASHINGTON, DC .....................(202) 966-0550
.................................................(202) 966-5250 FAX
ALEXANDRIA...............................(703) 519-7600
..................................................(703) 519-9471 FAX
ANNANDALE ................................(703) 642-6100
..................................................(703) 642-6142 FAX
ARLINGTON .................................(703) 351-0300
..................................................(703) 351-9978 FAX
ASHBURN .....................................(703) 726-9222
..................................................(703) 726-9368 FAX
BURKE ...........................................(703) 239-9600
..................................................(703) 239-0605 FAX
CENTREVILLE.............................(703) 818-8600
..................................................(703) 803-2867 FAX
FAIR OAKS....................................(703) 502-3255
..................................................(703) 242-0725 FAX
FREDERICKSBURG ...................(540) 372-4100
..................................................(540) 372-4114 FAX
GAINESVILLE..............................(571) 248-8777
..................................................(571) 248-8788 FAX
LAKE RIDGE ................................(703) 491-9600
..................................................(703) 492-7494 FAX
LEESBURG ...................................(703) 777-1286
..................................................(703) 777-1625 FAX
LORTON.........................................(703) 495-9600
..................................................(703) 493-9302 FAX
MANASSAS....................................(703) 396-8838
..................................................(703) 396-8809 FAX
MCLEAN ........................................(703) 903-9600
..................................................(703) 903-9606 FAX
OAKTON ........................................(703) 242-9600
..................................................(703) 242-0725 FAX
STERLING ....................................(703) 421-3300
..................................................(703) 421-6353 FAX
RESTON.........................................(703) 742-9600
..................................................(703) 742-9698 FAX
SPRINGFIELD..............................(703) 451-6600
..................................................(703) 451-1181 FAX
STAFFORD ....................................(540) 288-1747
..................................................(540) 288-1797 FAX
WARRENTON ...............................(540) 341-7700
.................................................(540) 341-8574 FAX
WINCHESTER..............................(540) 723-0662
..................................................(540) 723-0664 FAX
Page 61
OTHER IMPORTANT
PHONE NUMBERS
Lender: ________________________________
Loan Officer:___________________________
Telephone Number:_____________________
FAX Number: __________________________
Email: _________________________________
Processor: _____________________________
Realtor®: _______________________________
Listing Agent: __________________________
FAX Number: __________________________
Email: _________________________________
Selling Agent: __________________________
FAX Number: __________________________
Email: _________________________________
Settlement Company: RGS TITLE
Attorney: ______________________________
Processor: _____________________________
FAX Number: __________________________
Email: _________________________________
Insurance Agent: _______________________
FAX Number: __________________________
Email: _________________________________
Home Inspector: _______________________
FAX Number: __________________________
Email: _________________________________
Or, visit us on the web at www.RGSTITLE.com
IMPORTANT
TELEPHONE
NUMBERS
Page 62
Utilities and Schools—Northern Virginia
Telephone Verizon (toll-free) 1-800-483-4000
Verizon ........................................540-954-6222
www.verizon.net
Comcast .......................................703-823-3000
www.comcast.com
Cox Communications ................703-378-8422
www.cox.com
Utilities
AmeriGas....................................(540)869-5360
www.amerigas.com
City of Fredericksburg.............(540) 372-1182
www.fredericksburgva.gov
Culpeper County ......................(540) 825-0345
www.culpepercounty.gov
Fauquier.......................................540-349-2092
www.fcwsa.org
Town of Warrenton ....................540-347-2678
www.warrentonva.gov
Falls Church ................................703-248-5071
www.fallschurchva.gov
Herndon.......................................703-435-6814
www.herndon-va.gov
Town of Leesburg.......................703-771-2701
www.leesburgva.org
Loudoun .....................................571-291-7780
www.loudounwater.org
City of Manassas.........................703-257-8245
www.manassascity.org
Prince William ............................703-335-7950
www.pwcsa.org
Madison County.......................(540) 948-6700
www.madisoncountyutilities.com
Dale City Water (VA American
Water Co.)..................................703-549-7080
www.amwater.com
City of Manassas.........................703-257-8219
www.manassascity.org
Dale City Sewer (Dale Service Corp)
.......................................................703-590-4495
Dominion Virginia Power .........888-667-3000
www.dom.com
Town of Hamilton ......................540-338-2811
www.town.hamilton.va.us
Northern Neck Electric..............800-243-2860
www.nnec.coop
Town of Purcellville....................540-751-2328
www.purcellvilleva.com
Northern Virginia Electric.........888-335-0500
www.novec.com
Town of Round Hill....................540-338-7878
www.roundhillva.org
PEPCO-DC...................................800-424-8028
www.pepco.com
City of Fredericksburg ...............540-372-1182
Rappanhannock Electric...........540-898-8500
www.myrec.coop
King George County ..................540-775-2746
www.king-george.va.us
Columbia Gas .............................800-543-8911
www.columbiagasva.com
Washington Gas..........................703-750-1000
www.washgas.com
Spotsylvania County................(540) 507-3700
www.spotslvania.va.us
Public Schools Websites
Fairfax County ...........................www.fcps.edu
Loudoun County ......www.loudoun.k12.va.us
Arlington County...www.arlington.k.we.va.us
Stafford County........................(540) 658-8616
www.co.stafford.va.us
Fauquier ....................................www.fcps1.org
Water
Warren .............................www.wcps.k12.va.us
Alexandria....................................703-549-7080
www.alexsan.org
King George County .......www.kgcs.k12.va.us
Spotsylvania .......www.spotsylvania.k12.va.us
Fredericksburg..............www.cityschools.com
Arlington......................................703-228-6570
www.arlingtonva.us
IMPORTANT
TELEPHONE
NUMBERS
Orange County .......www.ocss-va.org/schools/
index.htm
Madison County..........www.madisonschools.
k12.va.us
Town of Culpeper .......................540-829-8220
www.culpeper.to
Prince William..........................www.pwcs.edu
Fairfax County ............................703-698-5800
www.fcwa.org
Stafford County ..............www.pen.k.12.va.us/
Div/Stafford
City of Fairfax .............................703-385-7920
www.fairfaxva.gov
Town of Vienna ...........................703-255 6385
www.vienna.gov
Special Education Office...........540-829-2110
www.doe.virginia.gov/special_ed/index/shtml
Page 63
Utilities—Fredericksburg/Stafford
Natural Gas
Electric.........www.simplyfredericksburg.com
Columbia Gas .............................800-543-8911
Dominion Virginia Power .........888-667-3000
www.dom.com/companies/vapower/
NOVEC...........888-335-0500 or 703-335-0500
www.novec.com
Rappahannock Electric .............540-898-8500
www.rappelect.com
Verizon of Virginia .....................540-720-9500
www.verizon.com
Adelphia Cable.........................1-888-683-1000
www.adelphia.net
Cox Cable of Fredericksburg ....540-373-6343
www.cox.com/fredericksburg
Columbia Gas of VA...................540-368-3200
Washington Gas..........................703-750-1000
www.washgas.com
Propane/Bottled Gas
AmeriGas........540-898-0357 or 866-325-0399
www.amerigas.com
Anderson Propane......................540-373-9096
www.andersonpropane.com
Blossman Propane .....................540-548-0254
www.blossmangas.com
Ferrell Gas ...................................866-699-2600
www.ferrellgas.com
Water/Sewer
Quarles Divisions: Central—Caroline,
King George, Louisa, Orange,
Spotsylvania, Stafford..............888-309-4174
Bowling Green (Town limits)....804-633-6212
www.townofbowlinggreen.com
Culpeper—Culpeper, Fauquier,
Louisa, Orange..........................866-807-5401
Caroline County..........................804-633-4390
www.co.caroline.va.us
Suburban Propane .....................800-776-7263
www.suburbanpropane.com
Culpeper (Town limits) ..............540-727-3423
www.culpeper.to
Southern States ..........................703-373-3631
www.southernstates.com
Fauquier County.........................540-349-2092
www.fcwsa.org
Miss Utility of Virginia ............(800) 552-7001
Fredericksburg (City).................540-372-1182
Maryland & DC Utilities
Lake Caroline (Ladysmith Water
Co.) ...........................................804-448-2330
www.co.caroline.va.us/lcwater
Lake of the Woods & Orange
County......................................540-972-2133
www.orangevirginia.info/utilities.htm
Spotsylvania County ..................540-898-4096
www.spotsylvanis.va.us
Stafford County ..........................540-658-8616
www.gostaffordva.com
WSSC ...........................................301-206-4001
Washington Gas..........................800-752-7520
PEPCO .........................................202-833-7500
DC Water .....................................202-354-3600
Rockville Water...........................301-309-3370
Frederick Gas Company............301-662-2151
Frederick Water ..........................301-694-1179
Comcast..............................www.comcast.com
Direct TV..............................www.directtv.com
District of Columbia .....................www.dc.gov
Montgomery County.........www.montgomery
countymd.gov
IMPORTANT
TELEPHONE
NUMBERS
Page 64
GLOSSARY
Adjustable Rate Mortgage (ARM)—
interest rates on this type of mortgage are
periodically adjusted up or down,
depending on a specified financial index.
Agent—acts on behalf of another, representing that person’s interests and serving as an intermediary.
Amortization—a method of equalizing
the monthly mortgage payments over the
life of the loan, even though the proportion of principal to interest changes over
time. In the early part of the loan, principal repayment is very small and interest
repayment very high; at the end of the
loan, that relationship is reversed.
Annual Percentage Rate (APR)—the
actual finance charge for a loan, including points and loan fees in addition to the
stated interest rate.
Appraisal—an expert judgment of the
value or worth of a property.
ARM—see “Adjustable Rate Mortgage”
Assessed Value—the value placed on
property by a municipality for purposes
of levying taxes. It may differ widely from
appraised or market value.
Assignment of Funds—a direction to
a third party to transfer funds from the
sale or mortgage of one property directly
to the Settlement Agent for the specified
contract property.
Assumption of Mortgage—Buyer
assumes liability for an existing mortgage
note held by the Seller. This is subject to
approval by the lender, who must be willing to approve the Buyer and release the
Seller.
Balloon Payment—a large principal
payment due all at once at the end of
some loan terms.
Broker—a real estate professional who
has a higher level of training than an
agent. Generally, this is one who is the
legal representative or proprietor of the
office.
Cap—limit on how much the interest
rate can change in an ARM.
Closing—see “Settlement.”
Commission—fee (usually a percentage of total transaction) paid to an agent
or broker for services performed.
Condominium (Condo)—type of real
estate ownership where the owner has
title to a specific unit and shared interest
in common areas.
Contingency—a condition in a contract that must be met for the contract to
be binding.
Contract—binding legal agreement
between two or more parties that delineates the conditions for the exchange of
value (for example: money exchanged for
title to property).
Conversion Clause—a provision that
allows converting an ARM to a fixed-rate
loan after a specified interval.
Deed—legal document that formally
conveys ownership of property from
Seller to Buyer.
Down Payment—percentage of the
purchase price that the Buyer must pay
in cash and may not borrow from the
lender.
Earnest Money—a large deposit paid
when the sales contract is signed before
the closing.
Equity—the value of the property
actually owned by the homeowner: purchase price plus appreciation plus
improvements, less mortgages and liens.
Escrow—a fund or account held by a
third-party custodian until conditions of
a contract are met.
Fannie Mae—see Federal National
Mortgage Association.
Federal Home Loan Mortgage
Corporation (Freddie Mac) and
Federal National Mortgage
Association (FNMA, called “Fannie
Mae”)—privately owned corporations
created by Congress that buy mortgage
notes from local lenders and are responsible for the guidelines a majority of
lenders use to qualify borrowers.
Finance Charge—the total cost,
including all fees, points and interest
payments a borrower pays to obtain
credit.
Fixed Rate Mortgage—interest rates
on this type of mortgage remain the
same over the life of the loan term.
Compare to “Adjustable Rate Mortgage.”
Fixture—a recognizable entity (such
as a toilet bowl, kitchen cabinet, or light
unit) that is permanently attached to
property and belongs to the property
when it is sold.
GFE—Good Faith Estimate provided
by the lender on a federally mandated
form to disclose to borrower the estimated charges for closing.
Hazard Insurance—compensates for
property damage from specified hazards
such as fire and wind. More complete
coverage is given by all-risk homeowner’s
insurance.
Home Inspection Report—prepared by a
qualified inspector, it evaluates a property’s
structure and mechanical systems.
HUD-1—A precise breakdown of closing
costs for both Sellers and Buyers (Also
known as HUD-1 Settlement Statement)
required by the Real Estate Settlement
Procedures Act.
Impounds—Another term sometimes
used for “Escrows” collected and held by a
lender to pay taxes and insurance on the
mortgaged property.
Interest—The cost of borrowing money,
usually expressed as a percentage over time.
Lien—a security claim on property until a
debt is satisfied.
Listing Contract—agreement whereby an
owner engages a real estate agent for a specified period to sell property, for which sale
the agent receives a commission.
Market Value—the price that is established by present economic conditions, locations, and general trends.
Market Price—the actual price at which
a property sold.
Mortgage—security claim by a lender
against property until the debt is paid.
Metropolitan Regional Information
System (MRIS)—a system that provides to
its members detailed information about
properties for sale.
Negative Amortization—A method of
calculating fixed monthly payments in combination with a variable interest rate. When
monthly payments are not enough to cover
interest costs, unpaid interest is added to the
principal balance.
Origination Fee—application fee(s) for
processing a proposed mortgage loan.
PITI—principal, interest, taxes, and
insurance, forming the basis for monthly
mortgage payments.
Point—one percent of the loan principal.
It’s charged in addition to interest and fees.
Prepayment Penalty—a fee paid by a
borrower who pays off the loan before it is
due.
Prequalification—informal estimate of
how much financing a potential borrower
might expect to obtain, done before paying
substantial loan application fees.
Principal—one of the parties to a contract; or the amount of money borrowed, for
which interest is charged.
© 1992–2011, RGS TITLE LLC
All rights reserved.
Prorate—divide or assess proportionately.
Realtor®—a member of the National
Association of Realtors®.
RESPA Statement (see HUD-1)—Real
Estate Settlement Procedures Act, a precise
breakdown of closing costs for both Sellers
and buyers. (Also known as HUD-1 Settlement Statement.)
RGS TITLE—The Washington, D.C.
Metropolitan area’s leading residential settlement company for over 20 years.
Settlement—all financial transactions
required to complete contract performance/obligations.
Title—document that indicates ownership of a specific property.
Title Insurance—protects against loss
from defects in the title.
Title Search—detailed examination of
the entire document history of a property
title to make sure there are no encumbrances.
Types of Ownership—There are four
types of ownership: They are:
a. Sole Ownership—Only one person
owns the property.
b. Tenants in Common—Two or more persons have an undivided ownership in the
property. The percentage of ownership need
not be equal; each party has a right to sell
his interest, and upon the death of any of
the owners that owner’s interest in the property goes to the deceased’s heirs.
c. Joint Tenants—Ownership taken by two
or more persons at the same time in equal
percentages with an undivided right to possession. If one owner dies, his or her interest automatically goes to the remaining
owner(s).
d. Tenants by the Entireties—Owners are
husband and wife and together they hold
title to the property with a right of survivorship. Upon the death of either, the survivor
takes sole ownership to the exclusion of the
deceased spouse’s heirs.
Unreleased Trust—A mortgage or lien
recorded in the Court records that appears
to be outstanding (where no Certificate of
Satisfaction/release has been recorded).
Wherever Your Business May Take You…
WE’RE
ALREADY
THERE!
■
Convenient locations throughout Virginia,
Maryland, and Washington, D.C.
■
More than 300,000 residential settlements
performed!
■
More than 20 years of service to metropolitan
area Realtors!
■
Free Homebuyers Guide available!
■
24-hour Realtor® Hotline: (877) 660-5150!
■
Visit our unique Web site at www.rgstitle.com
for comprehensive explanations of procedures,
office directions and online fee quotes 24
hours a day, seven days a week!
■
More awards for outstanding customer service
than any other local title company!
Find us on Facebook.
T
he most trusted name in residential
settlements for more than twenty years.
VIRGINIA OFFICES
Alexandria
Burke
Gainesville
Manassas
Reston*
Winchester
(703) 519-7600
(703) 519-9471 FAX
(703) 239-9600
(703) 239-0605 FAX
(571) 248-8777
(571) 248-8788 FAX
(703) 396-8838
(703) 396-8809 FAX
(703) 742-9600
(703) 742-9698 FAX
(540) 723-0662
(540) 723-0664 FAX
Annandale*
Centreville*
Lake Ridge
McLean
Springfield
Realtor Hotline
(703) 642-6100
(703) 642-6142 FAX
(703) 818-8600
(703) 803-2867 FAX
(703) 491-9600
(703) 492-7494 FAX
(703) 903-9600
(703) 903-9606 FAX
(703) 451-6600
(703) 451-1181 FAX
(877) 660-5150
Arlington*
Fair Oaks
Leesburg
Oakton
Stafford
(703) 351-0300
(703) 351-9978 FAX
(703) 502-3255
(703) 242-0725 FAX
(703) 777-1286
(703) 777-1625 FAX
(703) 242-9600
(703) 242-0725 FAX
(540) 288-1747
(540) 288-1797 FAX
Ashburn
Fredericksburg
Lorton
Sterling
Warrenton
(703) 726-9222
(703) 726-9368 FAX
(540) 372-4100
(540) 372-4114 FAX
(703) 495-9600
(703) 493-9302 FAX
(703) 421-3300
(703) 421-6353 FAX
(540) 341-7700
(540) 341-8574 FAX
MARYLAND & WASHINGTON, D.C. OFFICES
Bethesda
Bowie
Rockville
Silver Spring*
Washington, DC
(301) 654-9800
(301) 654-8598 FAX
(301) 809-0011
(301) 809-6860 FAX
(301) 230-0070
(301) 230-2536 FAX
(301) 680-0200
(301) 680-2043 FAX
(202) 966-0550
(202) 966-5250 FAX
*English & Spanish