Home Buying & Selling Guide

www.austintitle.com

Table of Contents

- Rent or Own?

Home Buyers- Finding and Using a Realtor

- Reasons to Buy a Home Now

- What Should You Buy

- Tax Benefits of Home Ownership

- Home Appraisals - Before You Buy

- How to Use Your Smartphone to Find Your Dreamhome

- House Hunters Checklist

Home Sellers- Finding and Using a Realtor

- Preparing Your Home to Sell

- 10 Best Home Improvements and Low Cost Construction Tips

- Showing Your Home

- 10 Mistakes that Could Ruin Your Open House

- Real Estate Definitions

- Moving Checklist

Home Sellers

Finding And Using A Realtor®Selling a property is not something you do every day so knowing what to look for in a realtor® isn't exactly an easy thing

to do. Interviewing realtorS® is similar to a job interview. The job description you're after should include the following: "A

person you like, who presents well, who genuinely likes your property, who you believe will act in your best interests and be

honest with you at all times and will work hard to get you the highest price possible". Picking the right person could easily

make a five percent or more difference in the final sale price so do your research and choose wisely.

Do Your Homework on Real Estate Companies• Pay attention to the quality of the companies website. Was it easy to find them and navigate through to view properties? Do they add descriptions which make you want to inspect their properties? What's their area profile like?

• Become a mystery shopper with any real estate companies you are considering going with. See how they really treat prospective buyers.

• Ask your friends for a referral to someone they have dealt with. Have they worked with a realtor® who did a great job? Once you have a list of realtorS®, make an appointment with each one to learn more about their services. Always interview at least three realtorS® and if you don't like what you see pick another three.

• Listen to your instincts. Show each realtor® around your home. Watch their level of interest by seeing if they ask questions or make notes.

Questions to Ask a Prospective realtor®• "What will you do to get the best price for my home?" and "What will you do to sell my home if the advertising you suggest doesn't work?"

• Ask them to explain the benefits of any marketing tactics that will be used to sell your house; including print, the Internet and other types of advertising (you'll already know much of this if you've done your research on them).

• What's their commission rate? How does it compare to that of other agencies that offer the same services? Don't pick the cheapest or the nicest; you should pick the best person for the job and as long as their fee is reasonable then use them.

• Find out how long they want you to list with them, keeping in mind that three months is pretty standard.Some will say to you “I would have this sold in afew weeks with the amount of buyers I have onmy books”, so offer them a four week agreement and gauge their reaction.

Preparing Your Home For SaleRemember: First Impressions Are The Strongest!

When little things that are easily corrected are left undone, it’s human nature to wonder about the things that you can’t see. In contrast, when all the little cosmetic things are in great shape, the overall perception of your property is positive.

Completed Needs Work

Curb AppealHealthy, weed free, neatly cut, trimmed lawn ❏ ❏Shrubs trimmed neatly and to not touch the house ❏ ❏Weed free driveway, front walk and shrub areas ❏ ❏Sealed blacktop driveway ❏ ❏Toys, garden tools, clutter removed from yard ❏ ❏

House ExteriorRecently painted siding and trim ❏ ❏Repair/repaint fences and gates ❏ ❏Clean and align gutters and down spouts ❏ ❏Wash and align shutters ❏ ❏Wash all windows and screens ❏ ❏

Front Door-Entrance Area - ExteriorClean, wash and scrub front steps and porch ❏ ❏Check front doorbell and light ❏ ❏Replace welcome mat ❏ ❏Paint or wash storm door, lubricate hinges ❏ ❏Polish brass door lockset and brass hinges ❏ ❏Clean and wash front door tread ❏ ❏

Front Door-Entrance Area - InteriorClear entry area or foyer of all clutter ❏ ❏Reduce volume and clutter in front closet ❏ ❏Clean and polish the front entry floor ❏ ❏Wash, polish and replace light bulbs ❏ ❏Remove fingerprints and scuff marks on walls ❏ ❏Paint to lighten and refresh entrance area ❏ ❏

Living-Family-Dining RoomsRepaint or touch up walls, ceiling and trim ❏ ❏Repair or replace damaged moulding and trim ❏ ❏Refinish, clean and wax hardwood and vinyl floors ❏ ❏Shampoo/steam clean carpet ❏ ❏

BedroomsRepaint, repaper, touch up trim on walls and ceiling ❏ ❏Replace or clean drapes, bedspread and accessories ❏ ❏Shampoo carpet or wax and polish floor ❏ ❏Organize and clean out closets ❏ ❏Clear off top surfaces of bedroom furniture ❏ ❏Put all clothing away and out of sight ❏ ❏

KitchenPaint walls, ceiling, trim a light cheery color ❏ ❏Wallpaper with small pattern and light colors ❏ ❏Remove wax, scrub and repolish floors ❏ ❏Wash, wipe down cabinets and appliances ❏ ❏Thoroughly clean range and ovens ❏ ❏Clean out refrigerator and wash interior ❏ ❏Empty dishwasher and clean around controls ❏ ❏Check operation of all appliances ❏ ❏Neatly arrange all food storage areas ❏ ❏Clear all clutter from cabinets ❏ ❏Clean all cabinets and drawers ❏ ❏Wash or replace curtains ❏ ❏Clean and put away all pet feeding/watering dishes ❏ ❏

Completed Needs Work

BathsPaint or wallpaper using light colors ❏ ❏Scrub tile, bleach and repair grout ❏ ❏Check to see that the drawers/doors open easily ❏ ❏Clean and polish floor ❏ ❏Seal around tubs and showers ❏ ❏Clean out medicine cabinet ❏ ❏Check for evidence of water at toilet base ❏ ❏Replace old toilet seats ❏ ❏Replace old shower curtains ❏ ❏Buy a new set of color coordinated bath linens ❏ ❏

LaundryCheck operation of appliances and clean them ❏ ❏Clean, organize laundry area and remove clothes ❏ ❏Provide adequate light ❏ ❏

GeneralRemove clutter, papers and all unnecessary items ❏ ❏Replace burned out bulbs throughout the house ❏ ❏Remove cobwebs from ceiling and corners ❏ ❏Remove paint splash on tile, floors and counters ❏ ❏Wash and polish all hardware and handrails ❏ ❏Reorganize and clean out all closets ❏ ❏Replace switches, outlets that don’t work ❏ ❏Add colorful plants and flowers to several rooms ❏ ❏Replace and rejuvenate pillows and accessories ❏ ❏Clean out and sweep garage ❏ ❏Organize attic ❏ ❏

Showing Your HomeThe feeling they get from the house and the way they picture themselves enjoying the home are two of the most important factors inthe decision to buy. The following list offers a few suggestions to help the buyers create their own good feelings and visualize themselves owning your home.

Prior to Every Showing…• Open drapes and blinds• Turn on lights• Turn on soft music• Put dog outside• Cool in summer/warm in winter• Do not speak to potential purchasers• Stay out of the way (in one room or outside)

Remember: Repairs made prior to the inspection will save time and aggravation. Depending on the type of loan or the terms of the contract, some or all of the following list may apply:

Before the Inspector Arrives...• Slope ground away from the foundation (out four (4) feet where possible).• Allow for four (4) inches of foundation to show, including above flowerbeds.• Cut tree limbs away from house.• Wash stained siding and brick to remove discoloration or mildew.• Install splash blocks at downspouts.• Clean gutters and repair where necessary.• Repair all rotted wood and paint to match.• Remove any items stacked (firewood, etc.) against the house or garage.• Repair or replace damaged screens.• Cover exposed wiring with flexible conduit.• Install blanks in circuit breaker box where any are missing.• Check all electrical outlets for proper wiring.• Check firebrick in the fireplace. Seal with fireplace mortar where necessary.• Clean chimney.• Clean and inspect heater and check for holes or cracks in the heat exchanger.• Check A/C. It should cool to twenty (20°) degrees below outside temperature.• Check condensing unit and clean away any debris, leaves, grass, etc.• Test all smoke detectors. Add new batteries where necessary.• Toilets should be secured (should not rock).• Make sure tubs and/or showers do not leak.• Have all cracks in masonry repaired by professional mason.• Re-grout any cracks in ceramic tile.• Repair dripping faucets.

Remember: When buyers make a decision to purchase a home they do it emotionally!

Seller Should Make Every Effort To...

• Respond courteously and helpfully to realtors® requests to show property.

• Leave the property when a realtor® is showing it.

• Only discuss why you love this home with the other realtor®. Never talk about why, when or where you are moving.

• Remember that the other realtors® are representing the buyers so ask them to call your realtor® for additional information.

• Always ask for a card and proper identification before letting a realtor® into your home.

• Keep in close contact with your realtor®. Call them after every showing.

Best 10 Home Improvements for Return on InvestmentEvery consideration should be taken regarding market value of homes in an area. Market value is the key indicator of actual return on investment and so the numbers described below are based on U.S. national averages.

Siding Replacement (Fiber Cement) average costs are $13,212 and the return on investment is 88.1%Deck Addition (Wood) average costs are $10,347 and the return on investment is 85.4%Siding Replacement (Vinyl) average costs are $9,910 and the return on investment is 83.2%Minor Kitchen Remodel average costs are $21,185 and the return on investment is 83%Windows (Vinyl) average costs are $10,448 and the return on investment is 79.3%Windows (Wood) average costs are $11,384 and the return on investment is 79.3%Bathroom Remodel average costs are $15,789 and the return on investment is 78.3%Major Kitchen Remodel average costs are $55,503 and the return on investment is 78.1%Deck Addition (Composite) average costs are $15,039 and the return on investment is 77.6%

Worst 5 Home Improvements for Return on InvestmentThese are the home improvements you need to reconsider and only complete if necessary

Home Office Remodel average costs are $27,193 and the return on investment is 57%Backup Home Generator average costs are $13,357 and the return on investment is 58%Sun Room Addition average costs are $69,817 and the return on investment is 59.1%Master Suite Addition average costs are $98,163 and the expected on investment is 64.1%Garage Addition average costs are $82,108 and the return on investment is 64.6%

1. Clean/de-clutter - Remove clutter. Rent a storage space or sell excess items, if needed. Keep every room very clean during open homes.

2. Lighten and brighten - Replace any burnt-out bulbs and use higher wattage bulbs. Make sure skylights are clear and keep drapes open during the day.

3. Yard - Store away personal effects from front yard. Trim back the overgrowth and maintain yard. Make sure that your lawn has a healthy green appearance.

4. Plumbing and electrical - Consider repairing or replacing any defective plumbing or electrical items in your home.

5. Staging - Buy some fresh flowers, live plants and other decorations to liven up the home. Dispose of old furniture or other large items.

6. Update kitchen and bath - Update kitchen and baths by resurfacing cabinets or painting with neutral color. Replace toilet seats, dated fixtures and drawer/cabinet handles. Freshly caulk and redo grout in countertops, sinks, tubs and showers.

7. Paint interior - Repair any damaged interior walls by patching all chips, holes and cracks; then touch up or repaint interior walls with neutral color.

8. Carpeting - If carpets are only lightly soiled, shampooing and/or spot removal should suffice. If there are rips, fading, heavy wear, smells or deep stains, replace with neutral color.

9. Flooring - Repair and refinish damaged floors, or cover with neutral-colored wall to wall carpet and note damage in your disclosure.

10. Paint exterior - Repaint or resurface the outside walls of house, as needed. Patch and repair any damaged areas.

Low Cost/No Construction Tips

10Mistakes thatCould Ruin Your Open House

NO. 1: HOVERINGAs a seller, your job is to get out of the way. Let your agent andtheir team interact with the buyers. Nothing scares off buyersfaster than getting cornered by a desperate seller, says ElizabethWeintraub, a Realtor with Lyon Real Estate in Sacramento,California. "Buyers don't like it when they are hovered over. Givethe buyer some information and let them look through the homeon their own."

NO. 2: HALF-BAKED STAGINGIf you are going to professionally stage your home, stage thewhole house, or at least one entire floor. Nothing is more jarringthan two elegantly appointed rooms followed by an empty diningroom or den, says Maureen Reddy, a professional stager andowner of DaVinci Designer Gallery in Winthrop, Massachusetts.

"Nothing done halfway is ever any good," she says. And unlessyour agent is a professionally trained stager or interior designer,hire someone who knows what they are doing to handle thissensitive job. Don't let your agent start bringing in his or herfurniture for the open house -- it happens more than you wouldthink and it can backfire badly, Reddy says.

NO. 3: ROOKIE AGENT ON DUTYYour agent may not be the one to actually show your house. Butmake sure you are confident your Realtor has a capable and welltrained team, Weintraub says. While you don't want the agent atyour open house to bombard potential buyers with information,you want to make sure whoever is there is available to answerany and all questions and is not more concerned with texting orreading a book.

NO. 4: MUSICYou don't need music to sell a house. "At best it is distracting,"says Rona Fischman, owner of 4 Buyers Real Estate inSomerville, Massachusetts. "At worst, buyers will get suspiciousthat there is more road noise, or mechanical noise or neighbornoise that you are covering up."

NO. 5: FAILURE TO PROVIDE MARKETING MATERIALSAll buyers who walk through your house should be able to pickup an info packet to take with them, says Weintraub. There's noexcuse for running out of copies. Otherwise it's out of sight, outof mind.

NO. 6: SMELLSForget heavy air fresheners. Like other attempts to spice up theatmosphere, at best it's a distraction and at worst it may raisequestions about what you are hiding.

And yes, while pristine cleaning is paramount, the night beforeyour open house is not the time to plaster your abode withindustrial cleaners. The stench of bleach -- and the immediatequestions it will raise in a buyer's mind -- will do more damageto your chances than that tiny patch of mold in the corner of theshower.

Skip the cookies baking in the oven as well. Maybe it worked inthe 90s, but buyers figured that one out a long time ago, saysFischman. "You only get one opportunity to make a first impressionand if the impression is an overwhelming smell, you lose," she says."Whether it cookies or disinfectant, if it is noticeable -- and notmerely background -- buyers will notice."

NO. 7: LEAVING JEWELRY, VALUABLES ABOUTFrom gawkers to serious buyers, quite a crowd will trampthrough your house. Don't tempt anyone's honesty. Besideslosing something precious, you could also poison the deal withneedless suspicion when something goes missing and everyoneis suddenly is a suspect, Fischman says.

NO. 8: PETSLetting your beloved pets hang around on open house day couldprove costly. Not only should you put your dog or cat in a kennelfor the open house, you need to remove all signs of your belovedanimal friends. That means litter boxes as well -- a number oneturnoff for sellers. "The kitty-litter box has no place at an openhouse," says Reddy.

NO. 9: THE WRONG TEMPERATUREThis one's simple: Your house should be warm but not hot in thewinter and cool but not cold in the summer. Don't blow it byplaying games with the thermostat.

NO. 10: BAD PHOTOSIf the online photos of your house are dim, blurry, taken at oddangles or of odd rooms, don't be surprised if no one shows up.Bad photos prevent potential buyers from ever showing up inthe first place.

Common Real Estate DefinitionsAdministrative Fee Fee charged to process the loan for approval.Appraisal Fee Fee for lender-required appraisal to establish property value.Assumption Fee Fee assessed by lender to the buyer to assume seller’s existing loan.Attorney’s Fee Charges by independent attorney for preparation of legal documents and acts of representation.Attorney’s Fee (Release) Charge for preparation of the release of lien document when seller is paying off his existing loan.Commission Fee generally paid by seller to real estate agents for sale of property.Credit Report Fee assessed by lender for required credit information from credit bureau.Discount Points Points lender charges to increase the investor’s yield. May be paid by either buyer and/or seller as negotiated per contract. Points fluctuate with mortgage.Escrow Balance Buyer’s purchase of seller’s existing reserve account, i.e. taxes and insurance.Escrow Fee Charge by title company to escrow money and documents. Flood Certificate Required by lender to obtain information designating status of subject property regarding flood plains.Home Warranty Fee One year home systems and appliance warranty.Homeowner’s Assoc. Dues Maintenance fee assessed property owners within a condo or townhouse complex, a planned unit development or a single family residence subdivision.Homeowners Assoc. Fees Charges by association to provide information and change ownership records.Insurance Premium paid year in advance for buyers hazard or homeowner’s policy.Lender Inspection Fee As required by lender to determine condition of the property.Lender Required Tax Reserve Money required by lender, collected at closing, going into its escrow account. Insurance premiums, taxes, etc…are paid from escrow account for borrower.Lender Messenger Fee Covers delivery charges incurred.Mobile Home Processing Fee Charge by title company to process paper work with TDHCA.Mortgagee’s Title Policy (MTP) Required by lender to ensure that lender has a valid lien; does not protect buyer. It is sometimes required for second mortgages and seller financed transactions.Mortgagee's Title Policy Endorsements Additional title insurance coverages as required by lender.Origination Fee Fee buyer pays to lender to originate a new loan. Normally one percent of loan amount.Owner’s Title Policy (OTP) Insures buyer against loss due to any defect of the title not excepted to or excluded from the policy.Owner’s Title Policy Survey Amdmt. Area and boundary coverage in owners title policy.Pay Off Amount needed to pay off existing mortgage lien on the property being sold.Processing Fee Charge to process loan for application submittal to underwriting.Recording Fee Charge by county clerk to record documents in the public records. Charges based on per page recorded.State of Texas Guaranty Fee Fee assessed by the State of Texas for each policy issued.Survey Land survey required by lender: lot size, easements, encroachments, locations of improvements, etc.. May be a negotiated requirement on a cash contract.Tax Certificate Issued by taxing authorities to show amount of current year’s taxes and the last date that taxes were paid.Tax Proration Property tax adjustments between buyer and seller based on closing date.Tax Service Fee Fee required by lender for collection and disbursement of tax escrow by a servicing company.Termite Inspection Fee Required by lender showing property free of active termites. May be negotiated requirement on cash contract.Underwriting Fee Fee lender charges for underwriting the loans on behalf of the investor.VA Funding Fee An administrative fee charged by the Veterans Administration.Wire/Funding Fee Lender’s charge for sending “good funds” to title company.

Moving ChecklistEliminate moving stress! This quick and easy checklist will help you track dozens of details on your upcoming move or relocation.

Several Weeks Prior to Move:- Have a garage sale to dispose of unwanted items. - Donate unwanted clothing or household goods to charitable organizations. Obtain receipts showing the items' approx. value for possible tax deductions.- Begin to use up supplies of canned goods, frozen foods and other household items. Buy only what will be used before moving.- Return library books and anything borrowed from friends or neighbors, and collect things you may have loaned.- Review your relocation package if you have one, and determine what expenses will be paid by your company.- Start a log of moving expense receipts (some may be tax deductible).- Get written estimates from moving companies. Check the limits of insurance they offer, and if it covers replacement cost.

Prior to Moving Day:- Confirm with your employer that you're scheduled to be off on moving day.

- Purchase supplies like packing tape, bubble wrap and furniture pads, Boxes, boxes, boxes!- Drain fuel from your power mower and other machinery.- Pack "Open First" Boxes. For each room you pack, set aside one box that contains everything you'll need the first few days in your new home. Label the boxes "Open First" so that these will be the first boxes you unload.- Finish taking apart furniture that needs to be disassembled.- Sort out any plants you're taking.- Check that all the paperwork related to your house sale/purchase is complete.- Close bank accounts if necessary.- Finish your major packing.- Pack up your computer and electrical equipment. Write down serial numbers.- Make sure all boxes are clearly marked/labelled.- Start cleaning the house as you go.- Make sure you have all the documents related to your move on hand.- Check in with the movers and confirmthe start !me of your move.- Have measurements taken of the

rooms in your new place to determine where everything will go.

And Don’t Forget to:- Defrost freezer/refrigerator. Place charcoal to dispel odors.- Have appliances serviced for moving.- Plan special care needs of infants, children, seniors, pets and potted plants.- Clean out club, gym and school lockers; pick up all dry cleaning.- Check all closets, cabinets and rooms to make sure you didn't leave anything. Take out the garbage. Lock the windows. - Leave all keys and garage door openers needed by new owner. Leave a note with your contact information for the new owners.

And On Moving Day, Don’t Forget:- Before you load a single item, check the truck, trailer, or portable container for cracks, leaks, or other signs of wear. Raise any concerns with the movers.- It's easiest to load the truck if you have everything organized in a predesignated order. Load first items you need the least, and load "Open First" boxes last.- Carry currency, jewelry, and documents yourself, or use registered mail.- Check thermostat and make sure temperature is set appropriately.

At New Home:- Be on hand to accept delivery. If you cannot be there personally, be sure you authorize an adult to be your representative to accept deliver and pay charges.

- Place a floor plan of your new home by the entrance to help movers determine where each piece of furniture should go.- Give the kids a job to do - let them start on their rooms. Usually, the kitchen and the kids rooms are the best to set up first, as it helps them feel at home.- Supervise moving crew on location of furniture and boxes. Begin unpacking necessary basics first - basic kitchen utensils, bath toiletries, etc. - Check to make sure all utilities are on and working properly.

Send Change of Address to:• Alumni associa!ons• A"orneys• Banks (auto loans, checking accounts, credit cards, home equity, mortgage, safe deposit box, savings account)• Cell phone provider• Child care/daycare• City/County Tax Assessor• Credit bureaus• Credit card issuers• Department of Motor Vehicles• Dry cleaning pick-up and delivery• Employer• Family members• Health clubs• Health: medical, dental, prescription histories. Ask doctor and dentist for referrals, transfer needed prescriptions, x-rays. Contact pharmacies.• House cleaning service and lawn care• Insurance coverage: life, health, fire, and auto.• Magazine and newspaper subscrip!ons• New business cards• Passport• Pet si"er/ dog walker/ pet day care• Post office (give forwarding address)• Professional organiza!ons• Re!rement plan holders• Schools/Parent-teacher associa!on (ask for copies or transfer records.)• Social Security Administra!on• State/Federal Tax Bureaus and accountant/tax preparer• Swimming pool maintenance/membershiips • Utility companies: gas, light, water, telephone, fuel and cable• Veterinarian (pet licenses, vaccinations, tags, etc)• Veterans Administration

Begin making a "Survival Box" for

the move. This shouldinclude paper, pens,stamps, envelopes,

cellophane & heavy dutytape, scissors, tapemeasure, paper cups,ziplock bags, paper

plates & towels, plasticutensils, facial &

toilet tissue, instantcoffee or tea,

cream/sugar, soap, moisttowelettes, aspirin,bandaids, can opener,bottled water, travel

alarm, flashlight, smalltools kit, trash bags,

snacks or drinks, children's games,

address book, spare carkeys, phone books for

the city you are leavingand your destination.

Sellers Estimated ChargesWhere Austin Closes

www.austintitle.com

Payoff

Principal $

Interest $

Escrow Shortage $

Penalty $

Late Fees $

Release Fee $

Estimated Charges

Summary

Sale Price $

Payoff $

Closing Costs $

Approximate Total Due Seller

*A veteran may not pay attorney fees and messenger fees if he or she is paying a 1% origination fee.

* Amount based on actual charges.

These are estimates and subject to change. Please contact the lender for actual charges.

Conventional VA FHA Assumption Cash

Attorney's Fee

Attorney's Fee (Release)

Commission

Discount Points

Escrow Fee

Flood Certificate

Guaranty Fee

Homeowners Warranty Fees

Homeowners Assoc. Fees

Lender Inspection Fee

Messenger Fee

Mobile Home Processing Fee

Owners Title Policy (OTP)

Payoff

Processing Fee

Recording Fee

Tax Certificate

Tax Proration

Tax Service Fee

Termite Inspection Fee

Underwriting Fee

150 325 150 150 150

75 75 75 0 75

Per Listing Agrmt. Per Listing Agrmt. Per Listing Agrmt. Per Listing Agrmt. Per Listing Agrmt.

Negotiable Negotiable Negotiable 0 0

275 275 275 275 275

0 30 0 0 0

3 3 3 3 3

450 450 450 450 450

250 250 250 250 250

0 175 0 0 0

*25 *25 *25 *25 *25

75 150 75 75 75

Promulgated by the Texas Department of Insurance

Principal + Interest from 1st Thru Close Date 0 Principal + Interest

0 500 0 0 0

40-60 40-60 40-60 40-60 40-60

50 50 50 50 50

January 1st thru Close January 1st thru Close January 1st thru Close January 1st thru Close January 1st thru Close

0 95 95 0 0

0 100 0 0 0

0 750 0 0 0