Mortgage 101
This three letter mortgage term compares a borrower's monthly debt obligations to their gross monthly income and plays a major role in determining how much home they can qualify to purchase.
What is DTI or debt to income ratio
We are the documents that establish client/agent relationships and spells out the agent's duties and compensation.
Buyer's Agency Agreement and Exclusive Right to Sell.
An agent advertises a listing "guaranteed to increase in value" This is problematic because the agent cannot fully guarantee what?
Future market value
Before sending homes from a buyer's preferences. This establishes what price range your financed buyer can actually purchase.
What is a lender preapproval.
You arrive for a vacant home showing and find the front door standing wide open. This comes before getting your buyers inside to stay on schedule.
What is safety.
This document from a mortgage lender indicates that a buyer's credit, income, assets and other financial information have been reviewed and that the buyer appears qualified to purchase a home up to a certain amount.
What is a preapproval
Miss these dates and your buyer could lose an important contractual protection.
What is a contingency deadline.
"Do not show my house to people of a certain religion." This federal law makes following that instruction a major ethical concern.
What is the fair housing act.
What is a CMA (Comparative Market Analysis)
The refrigerator was there during the time of inspection but is now gone at the final walkthrough. Your first stop for determining whether there is a problem is this.
What is Agreement of Sale - Specifically Inclusions/Exclusions.
This independent professional opinion of a property's value is commonly ordered during the mortgage process to help determine whether the property provides adequate collateral for the loan.
What is an appraisal
A buyer receives their inspection report and discusses with their agent. This is what they request repairs on.
What is an Addendum.
Are there a lot of families with kids here? Answering based on who ives in the neighborhood could implicate this protected Fair Housing Class.
What is familial status?
What is staging
The buyer celebrates going under contract by purchasing a new car. This person should be contacted immediately
Who is the lender.
These are funds that a seller agrees to contribute toward certain allowable buyer closing costs, prepaid expenses, or other financing costs as part of the transaction.
What are seller concessions.
This is the monetary amount the buyer provides that shows the seller that they have "skin in the game."
What is an Earnest Money Deposit.
Your seller tells you that they would take $20,000 less than their purchase price. A buyer's agent calls you to ask if the seller is flexible on their purchase price. This duty keeps that information between you and your seller.
What is confidentiality.
Your seller needs $400,000 "in their pocket" after closing. The listing price alone won't answer whether that's possible; this calculation will.
What is the seller's net sheet.
DAILY DOUBLE
"We love this house so much. We would pay $30,000 more than the asking price. Do you think that we could get a deal though since it's been on market for two months?" says your buyer during their showing all while being within earshot of the seller's security system. They've potentially damaged this.
What is Negotiation position/leverage.
Unlike a basic pre qualification or preliminary approval, this type of mortgage approval means the borrowers financial file has already been reviewed by an underwriter before they have found a property, subject to any remaining conditions and the home itself.
What is a fully underwritten commitment.
This is assumed in Delaware and allows for the agent to represent the buyer and seller
What is dual agency.
Your seller tells you to tell other agents that have interested buyers that you have additional offers because they think it will cause people to offer higher. You do not have additional offers in hand. Saying you had offers would be an example of this.
Misrepresentation.
It is not enough to say "the seller's pay me" A professional consultation should clearly explain THIS before representation begins.
What is agent compensations and the buyer's potential financial obligations under the representation agreement.
What is legal advice.