Real Estate 101

What is the Marketing plans?
Your property will be marketed to ALL 6,500+ REALTORS in the Dallas/Ft. Worth area - and their prospective buyers! That's a key benefit too because approximately eighty percent of all homes are still sold through REALTORS.  We just make it a lot less expensive!
You don't have to show your home yourself! We will provide you with a REALTOR-issued electronic lockbox for storing a spare key to your home and communicate your showing instructions to the same familiar showing service used by thousands of REALTORS in the Dallas/Ft. Worth area.

What is a Competitive Market Analysis?
A Competitive Market Analysis is a technique used by REALTORS and licensed appraisers to estimate market value based on comparable (similar) properties that have recently sold, are currently listed for sale, as well as those that failed to sell.
This technique works particularly well when a number of homes in your neighborhood that are substantially similar to yours in size (lot size and interior square footage), configuration (number of bedrooms, baths, garage spaces, swimming pool, etc.) and construction (upgrades) have sold within the past six months.
Armed with the sold prices per square foot of the comparable homes, any adjustments that may be appropriate to the subject property (i.e. square footage, upgrades, etc.) are then factored in and an estimated sales price (usually expressed as an estimated low and high sales price range) is produced!
Note: A REALTOR-generated Competitive Market Analysis should NOT be substituted for the advice of a licensed appraiser.

How will you schedule showings of my home?
Any listing inquiry calls we get from prospective buyers (from our yard sign, listing flyers, newspaper/magazine ads,, etc.) will be routed to me who listed your property! I will then answer any questions the prospective buyer has about your property over the phone. If the prospective buyer is interested in seeing your property, I will conduct the showing for you! As another key benefit of this service, other REALTORS who represent prospective buyers may show your property as well! We provide you with an electronic lockbox that hangs on your front door and stores a spare key to your home. In addition, we communicate your showing instructions (i.e. appointment required, one-hour notice, security codes, etc.) to the same familiar showing service used by thousands of REALTORS in the Dallas/Ft. Worth area! The net benefit is that you don't have to be home during showings!

What does your yard sign look like?
We have invested a lot of time and money to create what we think is the most attractive, effective and flexible yard sign on the market!
Notice that the property description inserts can be replaced and stacked specifically for your home! We also attach a weather-resistant brochure box for storing listing information flyers and your REALTOR'S business cards!

What type of listing flyers do you provide?
One of the most important, but oftentimes overlooked advertising mediums is the listing flyer. Our flyer is professionally-designed and organized to display as much information about each room as possible. Why? As a general rule, the more property features listed, the higher the justified sales price!
With our service, we will prepare and provide you with an initial set of 100 color listing flyers printed on white paper. Electronic copies are also available. These flyers are intended to be displayed inside your home and in the yard sign brochure box.

How important is it to put a For Sale sign in my yard?
It is VERY important! Statistics show that approximately ONE-THIRD of homes are sold as a result of somebody seeing a REALTOR'S yard sign! We have invested a lot of time and money into our yard signs to ensure they are very attractive and effective!
If you have a very good reason why you cannot place a yard sign in the yard (i.e. homeowner's association rule, privacy issues, etc.), let us know and we will take that under consideration.

What can I exclude from the sale of my home?
As a general rule, things that are not attached to your property (loose personal possessions and non-built-in furniture and appliances) may be removed. Custom window treatments are typically considered a part of the home, but under certain circumstances, can be excluded.
A partial list of items that are typically included in the sale of a home are: window treatments; ceiling fans; built-in kitchen equipment; fireplace screens and artificial logs; heating and air conditioning equipment; satellite dish system and controls; security and fire protection systems; plumbing and lighting fixtures; garage door openers and controls; pool equipment and maintenance accessories.
Recent case law seems to support this. When in doubt, ask a REALTORS or your attorney.

I want to market my property to Buyer Agents. How much commission should I offer them?
The commission you offer Buyer Agents is negotiable, but we require that it be competitive. Naturally, you want to offer enough commission to attract agents without needlessly giving away too much of your equity. We want the same thing for you.
As a general rule, a commission offering in the range of 1.5% to 4% of the final sales price is usually reasonable. Ultimately, however, the demand for homes in your area, and the Buyer Agent commissions being offered, determine how competitive your commission offering should be.
Property Guys will be happy to provide you with guidelines that are appropriate for your property.

What is an electronic lockbox?
An electronic lockbox is a box that typically hangs on your front door knob and holds a spare key to your home. Access to the box is electronically controlled to limit access to only those people who possess an active electronic keycard. It is also usually programmed to only allow access to the box during certain times of day. Typically, the local Board of REALTORS is the body that grants and monitors access and use of the electronic keycards.
In addition to storing a spare key to your home, the lockbox also records the entry date, time, and ID of the keycard that entered your home, which is handy for security reasons.

What is a "showing service"?
A showing service is a third party REALTORS call to set up appointments to show your property.
At the time a listing is taken, the listing agent discusses and documents your showing instructions and records the name and phone number of the showing service used to provide showing instructions into the REALTORS' Multiple Listing Service (MLS).
The listing agent then communicates the showing appointment type (i.e. appointment required, one-hour notice, courtesy call, etc.), enter/exit instructions (electronic lockbox, security in and out codes, pet information, etc.), and any special information that may be required to the showing service.
When a REALTOR calls the showing service to set up an appointment to see the property, after properly authenticating their identity, the showing service then contacts the seller for authorization (as may be required). Once the showing appointment has been authorized, the showing service passes the showing instructions on to the calling REALTOR and records the showing date and time, and showing REALTOR'S information in their database. Finally, the showing information is made available to the listing agent.

What is a Contract "Terms Sheet"?
A contract terms sheet, commonly known as a Letter of Intent, is a non-binding document that allows a seller and prospective buyer to document the proposed terms of sale in which they are prepared to agree to in a subsequent legally binding contract.
Once the proposed terms of sale are documented in a contract terms sheet, an attorney, or other authorized person, may then uses the proposed terms of sale to complete a legally binding sales contract.
In the real estate industry, a state-level "Real Estate Commission" (e.g. Texas Real Estate Commission - TREC), typically comprised of attorneys and experienced real estate brokers, creates fill-in-the-blank style ("promulgated") real estate sales contract forms and addendums that licensed and trained real estate agents may use to create legally binding sales contracts - providing they stay within the limits prescribed by law.
When used, a contract terms sheet allows sellers and prospective buyers to focus on the proposed terms of sale and not the legally-binding contract forms and addendums. That's what a REALTOR is trained and licensed to do!

What is my home's "legal" description?
Unlike postal addresses, whose street names and zip codes oftentimes change, a legal description is permanently recorded in your local (typically county) property records office.
Although the format of legal descriptions are not consistent throughout the U.S., perhaps the most common format is the lot, block, track (subdivision) system.  With this system, the lot number, block number, and subdivision name referenced in a particular volume and page number in the local property records office are used to reference the property.
Highly irregularly shaped parcels of land, and some areas of the country use a metes and bounds measurement as the legal description for a property. With this method, a surveyor's precise measurements, originating from the earth's latitude and longitude coordinates, and using well-known and/or previously established landmarks, are used to define the property's location within the  legal 'section' and 'township' in which it belongs.
These legal descriptions may be obtained from the deed to your property, your tax statements, or through your local property records office.

Mortgage Glossary
Below are some terms and their meaning, these terms are commonly used in the mortgage process.
Adjustable-rate mortgage (ARM): 
A mortgage with an interest rate and payment that change periodically over the life of the loan based on changes in a specified index.

Callable debt: 
A debt security whose issuer has the right to redeem the security at a specified price on or after a specified date, but prior to its stated final maturity.

The portion of principal and interest due on a loan that is written off when deemed to be uncollectible.

Common stock: 
A security that represents ownership in a company but gives no legal claim to a definite dividend or to a return of capital.

Conventional mortgage: 
A mortgage loan that is not insured or guaranteed by the federal government.

Credit enhancement: 
A method to reduce credit risk by requiring collateral, letters of credit, mortgage insurance, corporate guarantees, or other agreements to provide an entity with some assurance that it will be recompensed to some degree in the event of a financial loss.

Credit loss ratio: 
The ratio of credit-related losses to the dollar amount of MBS outstanding and total mortgages owned by the corporation.

Credit-related expenses: 
The sum of foreclosed property expenses plus the provision for losses.

Credit-related losses: 
The sum of foreclosed property expenses plus charge-offs.

Credit scoring: 
A process that uses recorded information about individuals and their loan requests to assess - in a quantifiable, objective, and consistent manner - their future performance regarding debt repayment.

Debt security: 
A security in which the issuing company generally agrees to repay the principal (typically, the original amount borrowed) and make interest payments according to an agreed schedule.

The failure of a borrower to comply with the terms of a note or the provisions of a mortgage.

A mortgage loan on which a payment has not been made by the due date.

A financial instrument which derives its value from an underlying security or notional amount.

The weighted-average life of the present value of all future cash flows, both principal and interest, of a security. It is used as a measure of the sensitivity of the value of a security to changes in interest rates.

Earnings per share (EPS): 
The net earnings of a corporation divided by the average number of shares of its common stock outstanding during a period. A common method of expressing a corporation's profitability.

Fixed-rate mortgage: 
A mortgage loan in which the interest rate does not change during the entire term of the loan.

The lender's postponement of legal action when a borrower is delinquent. It is usually granted when a borrower makes satisfactory arrangements to bring the overdue mortgage payments up to date.

The legal process by which property that is mortgaged as security for a loan may be sold to pay a defaulting borrower's loan.

Global Debt Facility: 
A debt issuance facility through which U.S. dollar and foreign currency debt securities may be offered to investors worldwide with the feature of clearing and settlement through a variety of clearing systems.

Guaranty fee: 
Compensation paid by a lender to Fannie Mae for the guarantee of timely payments of principal and interest to MBS security holders.

Interest rate swap: 
A transaction between two parties in which each agrees to exchange payments tied to different interest rates or indices for a specified period of time, generally based on a notional principal amount.

Intermediate-term mortgage: 
A mortgage loan with a contractual maturity at time of purchase equal to or less than 20 years.

Lender option commitments: 
An agreement giving a lender the option to deliver loans or securities by a certain date at agreed-upon terms.

Loan servicing: 
The tasks a lender performs to protect a mortgage investment, including collecting monthly payments from borrowers and dealing with delinquencies.

Loan-to-value (LTV) ratio: 
The relationship between the dollar amount of a borrower's mortgage loan and the value of the property.

Loss mitigation: 
Activities designed to reduce either the likelihood of the corporation suffering financial losses on a loan or the final dollar value of those losses in the event of a borrower default.

Mandatory delivery commitment: 
An agreement that a lender will deliver loans or securities by a certain date at agreed-upon terms.

Medium-term notes: 
Unsecured general obligations of Fannie Mae with maturities of one day or more and with principal and interest payable in U.S. dollars.

Any change to the original terms of a mortgage.

A legal document that pledges property to a lender as security for the repayment of the loan. The term also is used to refer to the loan itself.

Mortgage-Backed Security (MBS): 
A Fannie Mae security that represents an undivided interest in a group of mortgages. Principal and interest payments from the individual mortgage loans are grouped and paid out to the MBS holders.

Multifamily housing: 
A building with more than four residential rental units.
Abbreviation for Notice Of Default.
Notice of Default
An official notice filed and recorded by a designated trustee at the request of a lender indicating lender has commenced foreclosure action. 

Nonperforming asset: 
An asset such as a mortgage that is not currently accruing interest or on which interest is not being paid.

Notional principal amount: 
The hypothetical amount on which interest rate swap payments are based. The notional principal amount in an interest rate swap generally is not paid or received by either party.

Preferred stock: 
Stock that takes priority over common stock with regard to dividends and liquidation rights. Preferred stockholders typically have no voting rights.

Preforeclosure sale: 
A procedure in which the borrower is allowed to sell his or her property for an amount less than what is owed on it to avoid a foreclosure. This sale fully satisfies the borrower's debt.

Real Estate Mortgage Investment Conduit (REMIC): 
A security that represents a beneficial interest in a trust having multiple classes of securities. The securities of each class entitle investors to cash flows structured differently from the payments on the underlying mortgages.

Repayment plan: 
An agreement between a lender and a borrower who is delinquent on his or her mortgage payments, in which the borrower agrees to make additional payments to pay down past due amounts while still making regularly scheduled payments.

Return on average common equity: 
Net income available to common stockholders, as a percentage of average common stockholders' equity.

Reverse mortgage: 
A financial tool which provides seniors with funds from the equity in their homes. Generally, no payments are made on a reverse mortgage until the borrower moves or the property is sold. The final repayment obligation is designed to not exceed the proceeds from the sale of the home.

Risk-based capital: 
The amount of capital necessary to absorb losses throughout a hypothetical ten-year period marked by severely adverse circumstances.

Secondary mortgage market: 
The market in which residential mortgages or mortgage securities are bought and sold.

A financial instrument showing ownership of equity (such as common stock), indebtedness (such as a debt security), a group of mortgages (such as MBS), or potential ownership (such as an option).

Serious delinquency:
A single-family mortgage that is 90 days or more past due, or a multifamily mortgage that is two months or more past due.
Short Refinance:
Short refinance is the replacement of a mortgage, usually with a reduced mortgage, when the borrower is already in default. This is done to transition the borrower to a more affordable payment structure. The lender has to write off the difference between the old mortgage and the new mortgage, but in some cases this may be preferable to foreclosure.
Short Sale:
To sell a home through negotiation with the bank or lender, who agrees to accept less than the full amount owed to satisfy the debt allowing the debt to be ‘paid off’, short. Short sales are subject to bank approval and are often used as options in lieu of foreclosure.

Stockholders' equity: 
The sum of proceeds from the issuance of stock and retained earnings less amounts paid to repurchase common shares.

Stripped MBS (SMBS): 
Securities created by "stripping" or separating the principal and interest payments from the underlying pool of mortgages into two classes of securities, with each receiving a different proportion of the principal and interest payments.

Transfer agent: 
A bank or trust company charged with keeping a record of a company's stockholders and canceling and issuing certificates as shares are bought and sold.

The process of evaluating a loan application to determine the risk involved for the lender. It involves an analysis of the borrower's ability and willingness to repay the debt and the value of the property.


Real Estate Glossary
Below are some terms and their meaning, you may often hear in the real estate industry.
An authorized person who manages or transacts business for another. Laws governing real estate--especially relating to agents--vary considerably from state to state. While some standardization has been achieved, it is best to check the particulars in each state.
Buyer Agent 
An agent who represents the buyer in a real estate transaction. A buyer agent may be paid by the buyer, seller, or listing agent at closing, provided all parties consent.
Dual Agent
An agent representing both parties in a transaction. In almost every state, dual agency is illegal and unethical without the written consent of both the buyer and the seller.
Listing Agent
The agent who represents the seller.
Selling Agent
The agent who obtains a buyer. A selling agent may represent the buyer, or may be a subagent of the seller.
A salesperson who works for an agent.
Features that enhance the value or desirability of a property. 
To pay a debt in periodic amounts until the total amount, including any interest, is paid.
A qualified party's opinion of the value of a property. This may include examples of sales of similar properties.
An increase in value
A process where disputes are mortgage to cover processing costs. settled by referring them to a fair and neutral third party (arbitrator). The disputing parties agree in advance to agree with the decision of the arbitrator. There is a hearing where both parties have an opportunity to be heard, after which the arbitrator makes a decision.
ARM (Adjustable Rate Mortgage) 
A financing technique in which the lender can raise or lower the mortgage interest rate according to a set index, such as six-month Treasury bills. 
Assessment / Assesed Value
An official valuation of property for tax purposes. Payments made by condominium or cooperative owners for their share of building maintenance expenses.
Balloon Payment/Mortgage
A mortgage with monthly payments often based on a 30-year amortization schedule, with the unpaid balance due in a lump sum payment at the end of a specific period of time (usually 5 or 7 years). The mort-gage may contain an option to “reset” the interest rate to the current market rate and to extend the due date if certain conditions are met.
Legally declared unable to pay your debts. Bankruptcy can severely impact your credit and your ability to borrow money.
An independent business person who sets real estate office policies, hires employees, determines their compensation, and supervises their activities.
CLO (Computerized Loan Origination) 
A computer network of major lenders that allows agents to initiate mortgage applications in their office. HUD has approved the procedure as long as 1) full disclosure is made of the fee; 2) multiple lenders are displayed on the computer screen to give borrowers a basis for comparison; 3) the fee charged is a dollar amount rather than a percentage of the loan.
The point at which real estate formally changes ownership. Closing costs are fees paid for services associated with a home's closing such as title insurance, surveying fees, recording fees, deeds, and affidavits.
CMA (Competitive Market Analysis) 
A method of determining the value of a property by comparing the prices paid for similar properties.Code of Ethics A written standard of ethical conduct embraced by the NATIONAL ASSOCIATION OF REALTORS®, a trade organization of more than 700,000 members representing all branches of the real estate industry.
Compensation paid to a real estate agent (usually by the seller) for services rendered in connection with the sale, exchange, or lease of property.
Condominium (Condo) 
Individual ownership of a portion of a building, with common areas shared by all owners. Maintenance fees called "assessments" are paid to the condominium association to maintain, repair, or improve the property.
Conventional Loan 
A fixed-rate, fixed term loan that is not insured by the government.
Co-operative (Co-op) 
An arrangement in which a corporation made up of residents owns a building. The buyer owns a proprietary lease, rather than real property, and a corresponding number of shares in the corporation.
Counter Offer 
A new offer as to price, terms, and conditions, made in response to a prior, unacceptable offer. A counter offer terminates an original offer.
CRS (Certified Residential Specialist) 
A professional designation awarded to experienced agents who complete an advanced course of study in residential real estate and demonstrate proficiency in sales and production. CRS Designees are members of the Residential Sales Council, a not-for-profit affiliate of the NATIONAL ASSOCIATION OF REALTORS®. 
A legal document transferring ownership of a property from one party to another.
Deed in Lieu of Foreclosure
The voluntary surrender of property by an owner or borrower to a lien holder (such as a bank) that eliminates the need to continue foreclosure action by the lien holder. The lien holder can refuse to accept the Deed in Lieu and file a Notice of Non Acceptance with the County Recorder.
Revealing what previously was private knowledge. Any statement of fact that is required by law.
Down Payment 
A percentage of the purchase price the buyer pays in cash.
Earnest Money 
A buyer's partial payment to the seller as a show of good faith in completing the transaction.
The difference between the current market value of a property and the claims--such as the unpaid portion of a mortgage--that exist against it.
The closing of a real estate transaction through a neutral third party who holds funds and/or documents for delivery after specific conditions have been met.
Exclusive Listing 
A written agreement in which the seller appoints only one agent to market the property for a specific period of time. If the owner sells the property himself, he is not required to pay a commission.
Exclusive Right of Sale Listing 
A written agreement between an agent and a property owner stating that the owner will pay a commission to the agent if the property is sold during a specific time period--whether or not the agent is responsible for the sale.
Fannie Mae (Federal National Mortgage Association) 
Fannie Mae purchases home mortgages, thus serving as a source of funds for mortgage lenders. It is a privately owned corporation whose shares are traded on the New York Stock Exchange, but it is subject to the strict supervision of the secretary of the U.S. Department of Housing and Urban Development (HUD).Federal Fair Housing Law Refers to Title VIII of the Civil Rights Act, and stipulates that discrimination based on race, color, sex, familial status, handicap, religion, or national origin is illegal in connection with the sale or rental of most dwellings. 
FHA (Federal Housing Administration) 
A federal agency established to improve housing standards and conditions. The FHA provides mortgage insurance to approved lending institutions.
Forbearance Agreement
An agreement between a mortgage holder and a borrower that specified a loan payment plan and halts the foreclosure action if borrower meets requirements and terms of the agreement. The payment plan generally includes provisions for repayment to the mortgage holder of all delinquent interest and fees and could include extending the life of the mortgage beyond it's original term.
The legal process by which property that is mortgaged as security for a loan may be sold to pay a defaulting borrower's loan.
Freddie Mac (Federal Home Loan Mortgage Corporation) 
A federally chartered corporation established to purchase mortgages in the secondary, or resale, market. Freddie Mac's policies are designed to serve the needs of savings and loan associations. It is subject to oversight by the U.S. Department of Housing and Urban Development (HUD).
A pledge made by one person (the guarantor) to ensure that another person (the obligor) will fulfill an obligation to a third party (the obligee).
HUD (U.S. Department of Housing and Urban Development 
A federal department active in a variety of national housing programs including urban renewal and public housing.
Additions intended to increase the value of a property.
An examination of a property by the buyer, agent, title insurance company, or other interested party.
A charge or claim by one party on the property of another as security for the payment of a debt.
A written agreement between a property owner and a real estate broker authorizing the broker to find a buyer.
Loss Mitigation
Banks and lenders look to limit losses on delinquent mortgages by working out solutions with borrowers through a Loss Mitigation Department, generally operated by the bank or lender to deal specifically with delinquent accounts.
Market Value 
The price a property will command on the open market.
MLS (Multiple Listing Service) 
A means by which agents are informed of the properties offered for sale by other agents.
A legal document pledging property as security for the payment of a loan.
Mortgage Insurance 
An insurance plan that protects the lender if the borrower does not repay a loan. Mortgage insurance is required when a home buyer makes less than a 20% down payment at the time of purchase. Private mortgage insurance (PMI) covers conventional (fixed-year, fixed-rate) loans. The Federal Housing Administration charges a mortgage insurance premium (MIP) on FHA loans.
A trade organization serving over 700,000 members from all branches of the real estate industry. Members subscribe to a strict Code of Ethics which governs their conduct.
Abbreviation for Notice Of Default.
Notice of Default
An official notice filed and recorded by a designated trustee at the request of a lender indicating lender has commenced foreclosure action.
A proposal to purchase property at a specified price and terms.
Open House 
The common real estate practice of showing "For Sale" homes to the public during established hours.
Origination Fee 
A lender's charge for establishing and processing a new mortgage loan. It is generally computed as a percentage of the loan and may be tax deductible.
Owner of Record 
The person named in the public record as the owner of a property or mortgage.
A one-time charge paid to the lender for issuing a loan. Each point equals one percent of the loan amount and is used to obtain revenue in addition to the interest rate.
The amount of money upon which interest is paid.
Qualified Buyer 
A buyer who has demonstrated the financial ability to afford the asking price of a home. Prequalifying with a lender can expedite the home buying transaction.
A registered trade name that may only be used by members of the NATIONAL ASSOCIATION OF REALTORS®, an organization with over 700,000 members who represent all branches of the real estate industry. REALTORS® subscribe to a strict Code of Ethics which governs their conduct.
Obtaining a new loan to pay off an existing loan. Refinancing is a popular practice when interest rates drop.
Residential Sales Council 
A not-for-profit affiliate of the NATIONAL ASSOCIATION OF REALTORS®. The Council awards the Certified Residential Specialist (CRS) Designation, to experienced members who have completed an advanced course of study in residential real estate.
Serious delinquency 
A single-family mortgage that is 90 days or more past due, or a multifamily mortgage that is two months or more past due.
Short Refinance
Short refinance is the replacement of a mortgage, usually with a reduced mortgage, when the borrower is already in default. This is done to transition the borrower to a more affordable payment structure. The lender has to write off the difference between the old mortgage and the new mortgage, but in some cases this may be preferable to foreclosure.
Short Sale
To sell a home through negotiation with the bank or lender, who agrees to accept less than the full amount owed to satisfy the debt allowing the debt to be ‘paid off’, short. Short sales are subject to bank approval and are often used as options in lieu of foreclosure.
Lawful ownership of property.
Title Insurance 
An insurance policy that protects against losses arising from title defects such as forged or misfiled documents
Title Search 
An examination of the public records to determine whether the current title is clear or defective.
Town House 
Also known as a row house, generally refers to a type of dwelling having two floors, with the living area and kitchen on the first floor, and the bedrooms on the second. Town houses share a common wall between units.
VA (Veterans Administration) 
A federal agency designed to 
 help veterans enter the housing market.
VA Loan 
A loan guaranteed by the U.S. Department of Veterans Affairs (VA). VA loans are made to honorably discharged veterans or their unremarried widows or widowers. Such loans require a minimal or no down payment and offer lower interest rates.
A final inspection of a property before it changes ownership.

Contact Property Guys now on all your real estate needs!

Thank you,

Don McGrath

Real Estate Licensed in the State of Texas

Texas Realtor Licence # 0602731

Texas Broker License (Lovejoy Homes Realty) # 9004137

Contact me at Don@PropertyGuys.US