Homeowner's Guide to Buying & Selling

fidelitytucson

A Proud History of Trust and Reliability

Rely on Fidelity to

Protect Your Property Ownership

Over our long and proud history, Fidelity National Title Insurance Company

has grown to become one of the nation’s largest and most respected title and escrow

companies. Whether you’re purchasing a home, business or any other type

of property, we’ve established a reputation in the real estate industry for superior

service, complete integrity and unmatched professional expertise.

www.fntic.com


1961: Fidelity National Title is granted authority

to begin doing business in Nebraska.

1981: Fidelity National Title is ranked the

48th largest title insurer in the U.S.

Showcasing a History of Trust and Reliability

1848: C.V. Gillespie, a San Francisco notary

public and searcher of public records, launches

the company that will eventually become

Fidelity National Title Insurance Company.

1906: During the devastating San Francisco

earthquake and fire, employees of the predecessor

company to Fidelity National Title save

the title plant and other important property

records. The documents become a valuable

resource when San Francisco’s City Hall and

the Hall of Records are destroyed.

2002: Fidelity National Title’s parent company,

Fidelity National Financial, (NYSE:

FNF) is named a Fortune 500 company and is

named to Fortune’s “America’s Most Admired

Companies” list. FNF makes the list again in

2003, 2005 and 2007.

2003: Forbes selects FNF and its family of

companies as America’s best-managed insurance

company.

2006: FNF launches MihogarenCalifornia.

com, a bilingual English and Spanish language

website developed to educate Hispanic consumers

on the process of buying a home.

2007: Fidelity National Title’s website,

www.fntic.com, is launched in Spanish, Chinese,

Korean and Vietnamese versions

to help more multicultural populations better

understand homeownership and real estate

closings in the United States.

Title Insurance: The Ultimate Property Protection

If ownership of your property is ever challenged,

Fidelity National Title Insurance will

defend your possession of the property —

and assume the legal costs of that defense

— for as long as you and your heirs own the

property.

What’s more, if any challenge to your property’s

title proves to be legitimate, Fidelity National

Title Insurance will pay for your losses,

just as your title insurance policy provides.

Your entire real estate investment depends

upon receiving clear title to your property.

Take advantage of Fidelity National Title’s expertise,

strength and superior service for your

peace of mind and the ultimate in protection

for your property.

Service

The experience and dedication of our

full-service, nationwide network of

professionals assure you of an expert

title search and examination and an

accurate, timely closing.

Security

We’re leaders in combating mortgage

fraud to help protect you against those

who misrepresent themselves or the

property or who attempt identity theft.

GET THE COMPLETE OWNERSHIP SECURITY YOU NEED WITH

FIDELITY NATIONAL TITLE INSURANCE COMPANY’S FOUR PILLARS OF PROTECTION:

Technology

We hold the industry’s largest collection

of real estate-related data,

documentation and public record

information. Using comprehensive,

intuitive technology tools and rapid

communications, our professionals can

quickly and securely search and clear

property titles.

Trust

Home buyers trust our passionate

commitment to helping consumers

understand the steps, fees and requirements

of real estate transactions. Our

open process and availability to answer

all your questions provide the clarity

you need about what is often your largest

and most valuable purchase.


QUICK REFERENCE

Complete the blanks as the information becomes available.

Certain entities may ask for the name of your title company

and your escrow number.

FIDELITY NATIONAL TITLE INSURANCE COMPANY

ESCROW NO. ____________________________

NEW ADDRESS ____________________________________

_______________________________________________

CITY/STATE/ZIP____________________________________

Name_______________________________________ Phone: ( ) ____________________________

OTHER INSURANCE LENDER ESCROW REALTOR®

Address _____________________________________ Cell: ( ) ____________________________

Company ____________________________________ Other: ( ) ____________________________

Address _____________________________________ Fax: ( ) ____________________________

City/State/Zip _________________________________ E-mail: ________________________________

Escrow Officer ________________________________ E-mail: ________________________________

Escrow Assistant ______________________________ E-mail: ________________________________

Address _____________________________________ Phone: ( ) ____________________________

City/State/Zip _________________________________ Fax: ( ) ____________________________

Company ____________________________________ Phone: ( ) ____________________________

Loan Officer __________________________________ Fax: ( ) ____________________________

Address _____________________________________ E-mail: ________________________________

Other Service _________________________________________________________________________

Existing Agent ________________________________ Policy # ________________________________

Phone ( ) _________________________________ Fax: ( ) ____________________________

New Agent ___________________________________ Policy # ________________________________

Phone ( ) _________________________________ Fax: ( ) ____________________________

IMPORTANT: Do NOT cancel your home insurance or disconnect utilities prior to the close of escrow.

Newspapers: Arizona Republic 602-444-1000 Other: ________________________________

Post Office: __________________________________ Other: ________________________________

Fidelity National Title Insurance Company


MOVING CHECKLIST

At Your Present Address

■ Post Office: Give forwarding address

■ Charge accounts, credit cards

■ Subscriptions: Notice requires several weeks

■ Friends and relatives

Bank

■ Transfer funds, arrange check cashing in new city

■ Obtain cashier’s check necessary for closing real estate

transaction. Be sure to ask your bank if this check is

drawn on an Arizona (your state) Institution

■ Arrange credit references

Insurance

■ Notify company of new location for coverages: Life,

Health, Fire and Auto

Utility Company

■ Gas, electric, water, telephone, fuel, garbage, cable

■ Get refunds on any deposits made

Delivery Service

■ Laundry, newspaper, milk or water

Medical, Dental, Prescription Histories

■ Ask doctor and dentist for referrals: transfer any

needed prescriptions, eyeglasses, x-rays. Obtain

birth records, medical records, etc.

School

■ School transcripts

Church, Club, Civic Organizations

■ Transfer memberships: get letters of introduction

Pets

■ Ask about regulations for licenses, vaccinations,

tags, etc.

Don’t Forget

■ Empty freezer; plan use of foods

■ Defrost freezer and clean refrigerator. Place charcoal to

dispel odors.

■ Have appliances serviced for moving.

■ Remember arrangements for TV and cable/satellite.

■ Clean rugs or clothing before moving.

■ Check with your Moving Company, insurance coverage,

packing and unpacking labor, arrival day, various

shipping papers, method and time of expected

payment.

■ Plan for special care needs for infants.

On Moving

■ Carry enough cash or traveler’s checks to cover cost of

moving services and expenses until you make banking

connections in new city

■ Carry jewelry and documents yourself, or use

registered mail.

■ Plan for transporting pets; they are poor traveling

companions if unhappy.

■ Let a close friend or relative know route and schedule

you will travel, including overnight stops; use him/her

as message headquarters.

■ Double check closets, drawers, shelves to be sure they

are empty.

■ Leave all old keys and garage door openers needed by

new tenant or owner with Realtor ® or neighbor.

At Your New Address

■ Check on service of telephone, gas, electricity, and

water.

■ Check pilot light on stove, hot water heater, incinerator,

and furnace.

■ Have appliances checked.

■ Ask mail carrier for mail they may be holding for your

arrival.

■ Have new address recorded on driver license.

■ Visit city offices and register for voting.

■ Register car within five days after arrival in state or

penalty may have to be paid when getting new license

plates.

■ Obtain city inspection sticker and transfer motor club

membership.

■ Apply for state driver license.

■ Register family in your new place of worship.

■ Register children in school.

■ Arrange for medical services: doctor, dentist, etc.

Fidelity National Title Insurance Company


Admission to Statehood: February 14, 1912

State Land Area: 113, 594

ABOUT ARIZONA

Origin of State’s Name: Spanish interpretation of “arizuma” an

Aztec Indian word meaning “silver-bearing.” Also based on Pima

Indian word “arizonac” for “little spring place.”

State Nickname: The Grand Canyon State

State Motto: Ditat Deus God Enriches

Arizona Area Codes: (480), (520), (602), (623), (928)

Bordering States: California, Colorado, Navada, New Mexico,

Utah

State Bird: Cactus Wren

State Flower: Saguaro Cactus Carnegiea gigantea

State Population: 6,553255 (2012)

State Capital: Phoenix, AZ

Pima County Population: 980,263 (2012)

Highest Point: Mount Lemmon at an elevation of 9,157 feet

above sea level.

Lowest Point: 660 feet west of Ajo

Economy:

Tucson is home to major military installations, prominent companies

in the high tech and aerospace industries and major medical

and research facilities. The University of Arizona, ranked among

the top 20 public research universities nationwide, is located in

Tucson as well as one of the largest community colleges in the nation

-- Pima Community College.

In 2013, The University of Arizona was one of the largest public

sector employers with 10,846 employees. The University is an integral

part of the local economy and receives almost a half billion

dollars in research grants each year.

The remaining large employers represent a balanced mix of health

care, retail trade, education, government, and military entities.


ABOUT ARIZONA

Top 25 Private Employers in Southern Arizona

(Arizona Daily Star, 2013)

Raytheon Missile Systems......................

Wal-Mart Stores Inc................................

UA Healthcare........................................

Freeport-McMoRan Copper & Gold...........

Carondelet Health Network......................

TMC HealthCare.....................................

Fry's Food Stores...................................

Corrections Corp. of America...................

Asarco LLC...........................................

Afni Inc..................................................

Southern Arizona VA Health Care............

Citi........................................................

Bashas' Inc............................................

APAC Customer Service.........................

Safeway Inc...........................................

Target Stores Inc....................................

Northwest Medical Center.......................

Walgreens.............................................

IBM.......................................................

TEP/UniSource Energy...........................

Sol Casinos............................................

Union Pacific Railroad..........................

Circle K Stores.......................................

GEICO......................................................

Ventana Medical Systems, Inc...........

10,300

7,450

6,099

5,463

3,668

2,977

2,700

2,314

2,297

2,199

2,182

2,000

1,800

1,777

1,685

1,640

1,757

1,420

1,375

1,232

1,300

1,200

1,200

1,155

1,150

Top 10 Public Employers in Southern Arizona

(Arizona Daily Star, 2013)

University of Arizona................................

Davis-Monthan Air Force Base..................

State of Arizona.......................................

Tucson Unified School District..................

Pima County...........................................

U.S. Customs & Border Patrol..........

City of Tucson.........................................

U.S. Army Intelligence Center and

Fort Huachuca.....................................

Tohono O'odham Nation...........................

Pima Community College.................

10,846

9,100

8,807

6,790

6,500

6,076

4,585

5,096

4,350

2,384

State Flag: Adopted in 1917, the 13 rays of red and gold on the

top half of the Arizona State flag represent both the 13 original colonies

of the Union, and the rays of the Western setting sun. Red

and gold were also the colors carried by Coronado’s Spanish expedition

in search of the Seven Cities of Cibola in 1540. The bottom

half of the flag has the same Liberty blue as the United States

flag. Since Arizona was the largest producer of copper in the nation,

a copper star was placed in the flag’s center.


TUCSON AREA MAP


TUCSON & SURROUNDING AREAS MAP


IMPORTANT NUMBERS & WEBSITES

EMERGENCY NUMBERS

EMERGENCY 911

City of Tucson Police Department 520-791-4444

Poison Control Center 800-222-1222

Suicide Prevention Hotline 520-622-6000

FIRE DEPARTMENT - non-emergency

City of Tucson 520-791-4512

Rural Metro 520-297-3600

Northwest 520-887-1010

Northwest Fire District 520-297-2564

South Tucson 520-917-1566

Golder Ranch 520-791-5536

Drexel Heights 520-883-4341

CITY OF TUCSON GOVERNMENT

City of Tucson 520-791-4221

Pima County Assessor's Office 520-740-8630

Pima County Recorder's Office 520-740-4350

Pima County Zoning Dept 520-740-6450

STATE GOVERNMENT

Driver's License & Vehicle Registration 520-629-9808

Arizona Income Tax Information 602-255-3381

Voter Registration 602-506-1511

POST OFFICES 800-275-8777

Downtown Tucson 141 S. 6th Ave, Tucson, AZ. 85701

Tucson - Cherrybell 1501 S. Cherrybell, Tucson, AZ. 85726

Tucson - Silverbell 975 N. Silverbell, Tucson, AZ. 85745

Tucson - Desert Foothills 1700 E. River Rd., Tucson, AZ. 85718

Tucson - Mission 315 W. Valencia Rd., Tucson, AZ. 85706

Tucson - Rita Ranch 8235 S. Houghton Rd., Tucson, AZ. 85747

Green Valley 50 E. Continental Rd., Green Valley AZ 85614

Benson 250 S. Ocotillo Ave., Benson, AZ. 85602

AIRPORTS

Tucson International (520) 573-8100

7250 S. Tucson Blvd., Tucson, AZ 85756

Phoenix Sky Harbor International (602) 273-3300

3400 E. Sky Harbor Blvd. Phoenix, AZ 85034


Services and Utilities

WATER

Avra Water Co-op 682-7331 Southwest Gas 889-1888

City of Tucson Utilities - Water 791-3242

GAS

Community Water 625-8409 CABLE TV SERVICE

Flowing Wells Irrigation District 887-4192 Comcast Digital 744-1900

Lago Del Oro Water Company 825-3423 Cox Communications 884-0133

Lazy C Water Service 743-0758

Marana Water 382-2570 GARBAGE & RUBBISH COLLECTION

Marana Domestic Water 682-5027 City of Tucson 791-3171

Metro Water 575-8100 Desert Dwellers Disposal, Marana 682-8002

Mount Lemmon Co-op Water Company 576-1538 Saguaro Environmental Services 745-8820

Oro Valley Water 229-5000 Waste Management of Tucson 744-2600

Rancho Del Conejo Water Co-op 682-8335

Rancho Sahuarita Water Company 399-1105 POST OFFICE

Ray Water Company, Inc 623-1332 Main Post Office

Rincon Water Company 298-0173 Zip Code Information

Rincon Ranch Estates Water Company 298-0173

Saguaro Water Company 577-2616 SCHOOL DISTRICTS

1-800-275-

8777

1-800-275-

8777

Sandario Water Company 623-5172 Tucson Unified #1 225-6000

Spanish Trail Water Company 577-2616 Tanque Verde #13 749-5751

Tucson Water Company 791-3242 Sunnyside #12 545-2000

Vail Water Company 647-3679 Flowing Wells #8 690-8800

Winterhaven Water & Development,

Inc 327-0111 Amphitheater #10 696-5128

Catalina Foothills #16 299-6446

ELECTRIC Marana #6 682-3243

Tucson Electric Power Company 623-7711

TRICO Electric Cooperative Inc 744-2944 NEWSPAPER

TELEPHONE - Qwest

New Service - Home

New Service - Business

TNI 573-4511

1-800-244-

1111

FIRE DEPARTMENT – nonemergency

1-800-603-

6000 City of Tucson 791-4512

Rural Metro 297-3600

Northwest 887-1010

Northwest Fire District 297-2564

South Tucson 917-1566

Golder Ranch 791-5536

Drexel Heights 883-4341


GENERAL INFORMATION

Arizona Vehicle Registration and Driver License

As a new resident to the State of Arizona, you are required to obtain an Arizona driver license

and to register your vehicles in this state. By definition, you are an Arizona resident and must

comply with state laws if you work in Arizona (other than for seasonal agricultural work), place

children in school without paying the tuition rate of a nonresident, have a business with an office

in Arizona, and that bases and operates vehicles in this state, obtain a state license or pay

school tuition fees at the same rate as an Arizona resident, have a business that operates vehicles

to transport goods or passengers within Arizona or remain in Arizona for a total of 7 months

more during any calendar year, regardless of your permanent residence. An “out-of-state student”

enrolled with 7 or more semester hours is not considered a resident, even if employed.

Military personnel based in Arizona who qualify for exemption under the Soldiers and Sailors

Relief Act are not considered Arizona residents.

Arizona state law requires that all applicants for an original driver license or identification card

present two forms of identification, one must have your photo (or three forms of identification if

no photo identification is available). All must be originals or copies certified by the issuing agency.

All must be in English. You are required to provide your Social Security Number. It will be

used to verify your identity and to comply with federal and state child support enforcement laws.

It will not be used as your driver license number.

If you are under 18, your application for an instruction permit or driver license must be signed by

at least one adult. The adult will be responsible for any negligence or willful misconduct when

you are driving. For more information, please contact the Arizona Department of Transportation

in Tucson at (520) 629-9808, and elsewhere in Arizona at (800) 251-5866.

Arizona has many people from other states who are now residents and visitors. This in itself can

cause problems because of the differences between laws here and laws “back home”. What applies

there may not apply here. Use extra caution when driving in any state with a growing population

and a wealth of tourists.

Arizona has tough drunk driving laws. Driving privileges can be revoked on the spot. Convictions

can bring large fines, time in jail and a suspended or revoked license.

Left turn arrows vary from city to city. Some appear before the green light and some appear after.

Photo radar is currently catching speeders in several cities and metropolitan areas and cameras

are also snapping pictures of drivers running red lights at certain intersections. Tickets are

mailed to the registered car owners.


GENERAL INFORMATION

SEAT BELT REQUIREMENTS

Occupants of the front seat of a vehicle must have the lap and shoulder belt properly adjusted and securely

fastened at all times while the vehicle is in motion.

Any children five years old or younger must be in a qualified child-restraint seat in the back seat of the

car. Infants should be in a reclined infant car seat of convertible seat in the infant position, and must face

the rear of the car. Never use a car seat in a seat where there is an air bag.

As of August 2012 the existing Arizona car seat law covering children up to 5 years of age changed, additionally

requiring that children ages 5—7 (Younger than 8) and 4ft 9inches or shorter must ride in a vehicle

booster seat. If you are stopped and it is determined by the police officer that there is a child that is

not properly restrained, the officer will issue a citation which results in a $50 fine.

Pima County law requires that all dogs (and cats) over four months wear a collar displaying a current license.

In addition, it is a good idea to attach a separate tag that lists your name, address, and phone

number. The law also prohibits you from allowing your dog/cat to roam freely outside of your property

at any time. When you take your dog/cat outside of its confined area it must be restrained on a leash

that is no longer than six feet in length.

According to the law, all dogs over the age of three months are required to have a license and rabies

vaccination (the vaccination must be administered by a licensed veterinarian).

For lost pets and other pet services:

PETS

Pima Animal Care Center (PACC) - (520) 243-5900 or www.pimaanimalcare.org

4000 N. Silverbell Rd., Tucson, AZ 85745

Humane Society of Southern Arizona— (520) 327-6088 or www.hssaz.org

3450 N. Kelvin Blvd., Tucson, AZ. 85716


Area School Information

Tucson Places a high priority on education, which is evident in the fact that Tucsonans regularly surpass national

educational averages. The Greater Tucson Economic Council (www.TREOAZ.org) has found that around 80% of

the city’s population has completed high school, compared with the national average of 66%. 20% of Tucsonans

have completed at least four years of college, as opposed to the national standard of 16%

Tucson students’ routinely score above the national average in SAT scores, as well as reading, math and

language testing at both the elementary and high school levels.

At the K-12 grade levels Tucson is home to several Top Rated Public Schools, Charter Schools, and Private

Schools. For Assistance or more information on these please visit the Arizona Department of Education website

(www.azed.gov) or (www.greatschools.org) .

UNIVERSITY OF ARIZONA

The University of Arizona is a premier, student-centered research institution. Established in 1885 as

the first university in the Arizona Territory and the state's only land grant institution, the UA embraces

its three-fold mission of excellence in teaching, research and public service. Now in its second century

of service to the state, the UA has become one of the nation's top 20 public research institutions. It is

one of only 62 members in the Association of American Universities, a prestigious organization that

recognizes universities with exceptionally strong research and academic programs. With world class

faculty in fields as diverse as astronomy, plant science, biomedical science, business, law, music and

dance, The University of Arizona offers a rewarding educational experience to all who choose to focus

on excellence.


ARIZONA IS WILDCAT COUNTRY

Tucson is a college town that has a Real passion for sports. And when it comes to Real Competition,

the Wildcats deliver. Be a part of the movement that is making Arizona Wildcat Country.

To learn more about the University of Arizona (520) 621-2211 or visit www.arizona.edu.

Pima Community College

Pima Community College is a two-year college serving the greater Tucson metropolitan area at six

locations throughout Pima County. Founded in 1966, Pima's credit courses award certificates and

associate's degrees in a variety of fields. PCC also provides workforce development, career training

programs, continuing education, and adult education.

Pima is committed to providing convenient, affordable, and accessible high quality education with the

power to transform the lives of our students, and improve our community.

History & Mission

The mission of Pima Community College is to develop our community through learning. This mission,

along with our vision and values, provide the framework for College activities.

Pima's history shows a firm commitment to making a difference in our community.

To learn more about Pima Community College (520) 206-4500 or www.pima.edu


University of Phoenix - Southern Arizona Campus

Attend University of Phoenix in Tucson, Arizona

The University of Phoenix Southern Arizona Campus is located in Tucson, Arizona and caters to working

professionals like you who want to earn a college degree while keeping up with your active lifestyle. The

University of Phoenix in Arizona makes this possible by providing on-campus college courses. We also offer

a selection of undergraduate and graduate degree programs that can be completed through the Online

Campus.

Earn your college degree at the Southern Arizona Campus

At the Southern Arizona Campus, you'll have the opportunity to earn your college degree in far less time

than you think. The faculty members at the Southern Arizona Campus put time and effort into providing a

quality education to each University of Phoenix student. Our faculty members typically hold advanced

degrees in their fields. Furthermore, many of our faculty members work for major companies that are

known throughout the world. You can feel secure in the quality of education you'll enjoy at University of

Phoenix.

Education options in Tucson, Arizona

Though we offer a wide range of options through our Southern Arizona Campus, our business, education,

and nursing programs are among the most popular. Depending on your course of study, you can pursue

your bachelor's or master's degree either through our Online Campus or at a local campus. Either way,

you'll find a program that works with your busy schedule instead of against it. For example, if you enroll in

our Bachelor of Science in Education/Elementary Education program, you can choose between our online

and on-campus learning formats and pursue your education while staying on top of your commitments.

For more information (866) 766-0766 or (520) 881-6512

300 S. Craycroft Road, Tucson,AZ. 85711 ● www.phoenix.edu


BUYER

The Process of Buying Your Home

Contact Licensed Real Estate Agent

Obtain Pre-Approval from Lender

Market Education

View Properties

Write Offer with Real Estate Agent

Purchase Offer Presented to Seller

Negotiate Terms of Purchase Contract (Agents)

Offer Accepted

Open Escrow with Fidelity National Title Insurance Company

Deposit Earnest Money

Disclosures and Inspections

Title Search and Preliminary Title Report

Additional Negotiations – If Necessary (Agents)

Signing of Documents

Additional Funds Deposited – If Applicable

Loan Funding

Close of Escrow – Documents Recorded at County Recorder’s Office

Get Keys and Move In!

Fidelity National Title Insurance Company


BUYER

How to Become a Buyer

You are about to embark on one of the most important and exciting decisions in your lifetime, the selection and purchase of

a home. It is a decision that will bring you years of comfort and joy. Yet, the idea of spending your free time evaluating homes

and neighborhoods, figuring your down payment and monthly costs, applying for a loan, and finalizing the purchase can be an

overwhelming process. For some buyers, the process is tedious and confusing. This is why consulting a professional Realtor ® is

a smart decision.

A licensed real estate agent can help you find a house, efficiently and quickly. Discuss with your agent the type of home you

believe will be right for your needs. Is your family growing? Do you entertain a lot? Garden? Barbeque? Work at home? Are you

a chef? A wardrobe buff? Are you a fixer-upper or a total coach potato?

Your Realtor’s ® expertise and experience will be crucial in helping you find the right home of your dreams. He/she has access

to the Multiple Listing Services (MLS), which provides information on virtually every home for sale in the market. This is a

useful tool because it provides the most current comparative information available for more informed shopping.

In addition, your agent will show you homes that you can comfortably afford. He/she will have the resources to help you

understand how much a lender will let you borrow and on what basis it’s calculated. Once you have calculated a price range,

your Realtor ® will work with you to establish the criteria that will lead you to the right home.

When you are ready to make an offer, your Realtor ® can assist you. He/she cannot suggest a lower price than what is listed,

but he/she can tell you what comparable homes are selling for in the same neighborhood. Your Realtor ® will act as the

intermediary between you and the seller who is likely to also be represented by an agent. If there are negotiations over price,

closing dates, contingencies, and items – such as appliances – to be left or taken, your Realtor ® will be your representative.

Once your offer is accepted, you will have a lot to do in a short period of time. Your Realtor ® will direct you to a lender, and

inspection and insurance professionals and Fidelity National Title Ins. Company for your escrow and title needs. He/she will keep

you on track and organized.

Shop smarter…not harder.

Fine tune those dreams of your next home by working on the answers to two questions:

1. How much house can you afford?

2. What are your needs and preferences in a home?

How Much House Can You Afford?

Though you may be willing to spend until it hurts, the name of the game is how much a lender calculates you can afford. Your

Realtor ® will put you in touch with a lender that he/she trusts to help you through the financial process of

pre-qualifying (targeting the amount that a financial institution will lend you).

In general, lenders allow your total monthly housing costs to go as high as but not more than 30% of your gross monthly income.

The second requirement is that not more than 36% of your gross monthly income can be tied up in total monthly house payment

and payments on outstanding long term debt.

Lenders use slightly different formulas for arriving at “total monthly house payment”. These costs generally include your

mortgage principal and interest payment, property taxes as a monthly figure, and hazard insurance as a monthly figure. These

four items are referred to as PITI (principal, interest, taxes and insurance). If you’re required to pay private mortgage insurance

(PMI) because your down payment is less than 20%, those premium payments will also be included. If you decide to buy a

condominium or town house, the monthly homeowner’s association fees will be included. Keep in mind, these formulas aren’t

cut and dried and things change from lender to lender, so your best bet is to consult.

Fidelity National Title Insurance Company


BUYER

Get your Financing in order

You can get together with a lender to get your loan application completed and the financing process started. Be prepared to

provide the lender with copies of any important and necessary information.

Making your Purchase

Once you have found the perfect house, your Realtor ® will take you through the

purchasing process:

• Submit your offer to buy the house. The seller may accept your first offer, or you may

go through one or several counter-offers before you and the seller agree on the

terms of the sale. Once you both agree, you have a contract of sale which spells

out the details and responsibilities of all parties involved in the transaction.

Making the Decisions About Your Purchase

Below are some of the items you will need to consider and how the purchase

process works.

How Much Should You Offer to Pay?

Should you offer to pay the seller’s asking price or a lower one? Consider such factors

as: How long has the house been on the market? Is its price reasonable? Your Realtor ® can

show you comparable home sales (comps) for similar properties in the neighborhood to help you.

How competitive is the area’s home buying market? If the seller is offering an assumable mortgage or

financing, how much is it worth to you?

What Happens to the Earnest Money?

A “deposit” is made, in part, to show the seller your seriousness about buying. Your Realtor ® will inform you of the amount

that is usually given in your area. The seller doesn’t actually receive the earnest money. A third party, Fidelity National Title

Insurance Company, holds the amount in a special trust or escrow account until the sale is closed or the contract is broken.

How Does the Seller Prove the “Title” is Clear?

A “title” spells out who has the right to ownership of a property. It is said to be “clear” if there are no substantial claims or

liens (such as a mortgage) against it. A standard contract asks you, in essence, how you want the seller to show you that he or

she owns the property and that the “title” has no claims against it that would prevent transfer to you.

A “title search” is done by Fidelity National Title Insurance Company and an Owner’s Policy of Title Insurance is issued. In order

to issue this insurance policy, which protects you against losses that come from claims against the title, Fidelity National Title

Insurance Company first searches the title. Because you are insured (usually for the sales price), the owner’s insurance provides

the most protection.

A Title Report is prepared showing a brief history of the ownership and any legal documents that affect its title.

What conditions do you want to place on the home youÕre buying?

When you commit to buy the home through your offer, you may make that commitment contingent upon certain things

happening, such as you securing financing for the home. In a similar vein, you may make the purchase contingent upon the sale

of your present home by a certain time and under certain terms.

You will also want to make sure the home is in good shape. You may make the contract subject to your being satisfied with a

building inspector’s report and/or an inspection for termites. The purchase should also be subject to your being satisfied with

your own inspection of the home just prior to closing.

Fidelity National Title Insurance Company


BUYER

What are you buying?

The contract should spell out everything that is part of the purchase that may not be clearly part of the real estate. Common

items that could cause questions include appliances, light fixtures (such as the chandelier in the dining room), shades, blinds,

curtains and rods, sun screens, shelving or cabinets, potted flowers, shrubs and trees, or perhaps a swing set that is

cemented down.

What special provisions should be included?

Most contracts for sale include some standard provisions, such as one for property taxes, insurance costs, utility bills, and

special assessments to be prorated at closing between buyer and seller. Others outline particulars about what happens if the

property is damaged before closing or if the seller or buyer fails to go through with the sale. You may want to add your own

special provisions. For example, you may want a new home builder to provide you with home warranty insurance at no cost to you.

The settlement process

All the pieces are starting to come together. Your lender has approved your loan. Except for the seller’s paying off the existing

mortgage, the title is clear. The property inspector you hired has submitted a report and finds no major structural or

mechanical flaws in the house. You, your Realtor ® , and the seller’s agent have completed a “walk-through”, a final inspection of

the property. (The walk-through inspection assures you that no damage has occurred since the property inspector looked over

your house, or that work you specified in the contract was completed.)

What are all those closing costs?

After you applied for your loan, you should receive from your lender a “good faith estimate” of the fees charged for closing.

This good faith estimate includes fees charged not only by the lender, but all parties involved.

The uniform settlement sheet you receive at closing will be divided into categories so that it’s easier to see what the charges are

related to. For example, some of the categories are: payments connected with loan, the title, money that must be placed in escrow,

money that must be paid in advance to the lender, the broker’s commission, recording fees, and document preparation fees.

In your contract, you and the seller agree who will pay what and although it’s likely you won’t by paying all the closing costs,

here’s a general rundown on what some of the costs include.

Charges related to the loan

The loan origination fee covers the lender’s administrative costs. The loan discount, referred to as points (each point being

equal to 1 percent of the loan amount), is extra interest paid to the lender to make up the difference between market interest

and the interest of the loan.

Why do lenders charge points?

Whenever governmental regulation, state usury laws and/or competitive practices prohibit the lender from charging a rate of

interest which would make the real estate loan competitive with other fields of investments, the lender must seek some other

methods of increasing the yield for the investors. By charging “points”, the lender can bring the real estate loan up to those other

investments. Please contact your lender for additional information.

Are “points” called by different names?

Yes. Commitment Fee, Discount Fee, Warehousing Fee, Funding Fee, etc.

Who must pay the points?

FHA: The Buyer is usually charged with the Loan Origination Fee. The Discount Fee can be paid by the Buyer or Seller.

VA: The Buyer is usually charged with the Loan Origination Fee and the Funding Fee. Discount Fee may be paid by Seller,

Buyer or split.

Conventional: Points can be paid by the Buyer, the Seller, or split between the two. State on Contract of Sale!

City/County/State government sponsored loans: As published by them.

Fidelity National Title Insurance Company


BUYER

Do the number of points charged fluctuate?

Yes. If rates on mortgage loans are lower than other investments (such as stocks, bonds, etc.) then funds will be drawn away

from the mortgage market. Also, when there is a heavy demand upon the money market because of business needs, military

requirements or other government borrowing, the result is that money for home mortgages becomes scarce and more

expensive. When that occurs, more points can be charged. Points balance the market. Points are not set by government

regulation but by each lender individually.

Is FHA or VA financing unfair to sellers?

No. Homes can sell faster because more buyers can qualify with the lower down payment requirement, lower interest rate,

or long term loans with lower monthly payments. The purpose of these loans is to provide purchasers the opportunity to buy

homes with minimal cash investment thus providing a bigger market for sellers.

Are points deductible for income tax purposes?

Points on a home are deductible if they are generally charged in the geographical area where the loan is made. If you are in

doubt about points being deductible you should contact your tax return preparer.

Other charges will most likely include an appraisal fee (to make sure the house is worth what you’re paying for it, thereby

assuring the lender that the house has enough value to cover the loan amount), and a credit report. If you are required to pay

PMI (Private Mortgage Insurance for less than 20% down), a charge will be included since the lender obtains the insurance for

you. If you are assuming the seller’s mortgage rather than getting a new loan, an assumption fee will be listed.

Items paid in advance to the lender

Items paid in advance generally include mortgage interest (from the closing date and the date your first payment is due), the

first year’s hazard insurance, and, if required, the first year’s PMI premium.

Deposits or reserves with the lender

Extra amounts (usually 2 months) for hazard insurance, property taxes (this depends on the time of year you close the

transaction), and PMI (if required). If you are buying a condominium or town house, you may also have to pay some portion of

the homeowner’s association fees.

Title charges

Title charges include fees for the title search and fees for preparing the documents for closing and transfer of title. There will

be a one time fee/premium for the owner’s title insurance and a one time fee/premium for the lenders title insurance. For more

information, please refer to the title and escrow section.

Recording and transfer charges

These fees are for recording the Deed of Trust (mortgage) and the grant deed. There may also be transfer taxes which are

fees for transferring property, and notary fees.

Closing

Before closing, any issues (such as problems you found during the walk through) should be resolved. The closing becomes a

formality in which your Fidelity National Title Escrow Officer will explain the documents and will ask you to review and sign them.

As a buyer, you’ll sign a note in which you agree to pay back the mortgage loan and pledge the house as security until it is

paid off. You’ll also sign a number of other documents that are required by the government and acknowledgments that you have

received all the information you should have about the loan and the transaction. Don’t be surprised if some of the documents

seem repetitive.

Fidelity National Title Insurance Company


BUYER

Step 1.

The Application

The key to the loan process

going smoothly is the initial

application interview. At this time

the lender obtains all pertinent

documentation so unnecessary

problems and delays may be

avoided. The realtor opens

escrow with Fidelity National

Title at this time as well.

The Loan Process

Step 2.

Requesting

Documentation

Withing 24 hours of application,

the lender requests a credit report,

an appraisal on the property,

verifications of employment and

funds to close, mortgage or

landlord ratings, a preliminary title

report, picture ID, W2í s (2 years),

Certificate of Eligibility and DD214

(VA only), and any other necessary

supporting documentation.

Step 3.

Loan Submission

Once all the necessary documentation

is in, the loan processor puts the loan

package together and submits it to

the underwriter for approval.

Step 4.

Loan Approval

Loan approval generally takes

anywhere from 24 to 72 hours.

All parties are notified of the

approval and any loan conditions

must be received before the loan

can close.

Step 5.

Documents are

Drawn

Within 1 to 3 days after the loan

approval, the loan documents

(including the note and deed of

trust) are completed and sent to

Fidelity National Title. The escrow

officer calls the borrowers to come

in when the papers are ready for

final signature. At this time, the

borrowers are told how much

money they will need to bring in to

close the loan.

Step 6.

Funding

Once all the parties have signed

the loan documents, they are

returned to the lender, who

reviews the package. If all the

forms have been properly

executed, the funds are

transferred by wire.

Step 7.

Recordation

When Fidelity National Title

receives the funding check from

the lender, they make the lender’s

security for the loan a matter of

public record. They do this by

recording the Deed of Trust at the

county recorder’s office. Escrow is

now officially closed.

Step 8.

Congratulations.

you are the proud

owner of a new home!

This is the most gratifying step

in the home buying experience.

Fidelity National Title Insurance Company


BUYER

Mortgage Loan Checklist

In order to expedite the mortgage loan process, please by sure you bring everything applicable on this list to make your

appointment and the loan process as smooth as possible. (Refer to your lender for your specific loan payments.)

■ Copy of Sales Contract (on the purchase of your new home).

■ Copy of Sales Contract and certified copy of Closing Statement (on the sale of your present home).

■ Residence History

Past 24 months of residence with complete addresses.

Length of time you lived at each residence.

Name of landlord and his/her address (if currently renting).

■ Employment History

Employers for the past two years with complete addresses.

Dates of employment for each place.

W-2s of most recent two years.

Most recent two year’s tax returns (with all schedules).

Year-to-date profit and loss statement and current balance sheet (if self-employed)

If there have been any gaps in your employment, be prepared to explain.

■ Copies of most recent monthly statements for all loans or credit card balances.

■ Accounts

Copies of most recent three month’s bank statements for all accounts, stock brokerages, mutual funds, IRAs, Pensions, etc.

■ Current Real Estate

Property addresses.

Estimated market values.

Outstanding loan balances (bring copy of most recent loan statement).

Amount of monthly payment.

Amount of monthly rental income, if any (copy of rental agreements).

■ Personal Property

Net cash value of your life insurance.

Year, make and value of all vehicles.

Value of your furniture and personal property.

■ If applicable, for the following:

Copy of divorce papers.

Certificate of eligibility & DD214 (for VA only).

Copy of driver license and Social Security Card (for FHA only).

Arizona’s Good Funds Law

Arizona Revised Statue 6-843. Disbursements; applicability

A. Except as provided by subsection B, an escrow agent may only disburse money out of an escrow account if

deposits are previously made that are at least equal to the disbursements and the deposits relate directly to the

transaction for which the money is being disbursed. The deposits shall be in at least one of the following forms:

1. Wire transfers so that the monies are received by the escrow agent or the agent’s depository.

2. Except as provided in paragraphs 1, 4 and 5, checks, drafts, negotiable orders of withdrawal, money orders or any

other item that has become available for withdrawal in accordance with the federal expedited funds availability act

(P.L. 100-86; 101 Stat. 635; 12 United States Code section 4001).

Fidelity National Title Insurance Company


BUYER

3. Credit transfers through the automated clearing house that are deemed available by the depository institution

receiving the credits. The credits must conform to the operating rules set forth by a national automated clearing

house association.

4. Cashier's checks, certified checks or teller's checks that have been deposited in the escrow agent's depository

account.

5. Checks made by an affiliate of a state or federally regulated depository institution where the check is drawn on the

affiliated depository institution so that the monies are deposited in the escrow agent's depository account.

B. An escrow agent may disburse up to five hundred dollars per transaction or any funds that are available as cash

without complying with subsection A.

C. Subsection A does not apply to account servicing.

In addition to the Arizona Good Funds law, Fidelity National Title Insurance Company (Fidelity) has the following policies:

DRAFTS

Until a draft has been submitted to our depository bank for collection and Fidelity has confirmed payment has been received

and credited to our account, no disbursement can be made against said draft.

THIRD PARTY CHECKS & FOREIGN CHECKS

Fidelity does not accept Third Party or Foreign Issued checks.

House Bill 2074 requires that “escrow agents not disburse money from an escrow account until funds related to the

transaction have been deposited and available.” The legislation specifies which forms of payments are acceptable for deposit.

Guide to Closing Costs

Buyer Generally pays…

• Title insurance premiums*

• Escrow fee*

• Notary fees

• Recording charges for all documents in buyer’s name

• Termite inspections (according to contract)

• Tax proration (from date of acquisition)

• Homeowner’s transfer fee

• All new loan charges (except those required by lender for seller to pay)

• Interest on new loan from date of funding to 30 days prior to first payment

• Assumption/change or records fee for takeover of existing loan

• Beneficiary statement fee for assumption of existing loan

• Inspection fees (roof, property inspection, geological, etc.)

• City transfer/conveyance tax (according to contract)

• Fire insurance premium for first year

• Courier fee

*These items might not apply to your county. Some counties split their title and escrow fees between the sellers and buyers.

While some counties, the Sellers are responsible for paying the title insurance and escrow fees and the Buyers pay the title

insurance. Please check with your Fidelity National Title Insurance Company Escrow Office for this information.

Fidelity National Title Insurance Company


BUYER

FOR BUYERS

You’ve decided to purchase a home – Congratulations! A licensed Realtor can make your home buying experience effortless.

The following are just a few of the many reasons you should work with a Realtor:

• It’s FREE! Your Realtor’s ® commission is typically paid by the seller.

• Realtors who are member of the Multiple Listing Service (MLS), have hundreds of homes to choose from.

• A Realtor’s duty is to get the best possible price and terms for you.

• A Realtor should act in your best interest and provide you with all available facts about

properties that could influence your decision to make an offer on a home.

• A Realtor will offer informational materials to help you make a realistic offer.

• A Realtor will prepare and present your offer (purchase contract) to the seller

on your behalf.

• A Realtor should give you “what if” scenarios about clauses, timeframes, and

requirements in a contract.

• A Realtor should accompany you on your visit to any new home developments

to work with builder specific terms and issues.

• A Realtor will track and manage many of the tasks required to close your

transactions, such as home inspections, title insurance, home warranty, and contract

deadlines.

• A Realtor has the knowledge and expertise to negotiate and resolve any problems that may arise.

The purchase of a home is a major investment. A licensed, real estate professional will work by your side throughout the

buying process to assure a successful home purchase.

Fidelity National Title Insurance Company


D O C U M E N T U P D A T E D :

OCTOBER 2014

A real estate agent is vital to the purchase of

real property and can provide a variety of

services in locating a property, negotiating

the sale, and advising the buyer.

A real estate agent is generally not qualified to

discover defects or evaluate the physical

condition of property; however, a real estate

agent can assist a buyer in finding qualified

inspectors and provide the buyer with

documents and other resources containing

vital information about a prospective property.

This Advisory is designed to make the purchase of

real property as smooth as possible. Some of the

more common issues that a buyer may decide to

investigate or verify concerning a property

purchase are summarized in this Advisory.

Included in this Advisory are:

1. Common documents a buyer should review;

2. Physical conditions in the property the buyer

should investigate; and

3. Conditions affecting the surrounding area that

the buyer should investigate.

In addition, a buyer must communicate to the

real estate agents in the transaction any special

concerns the buyer may have about the property

or surrounding area, whether or not those issues

are addressed in this Advisory.

REMINDER:

This Advisory is supplemental to obtaining professional property inspections. Professional

property inspections are absolutely essential: there is no practical substitute for a professional

inspection as a measure to discover and investigate defects or shortcomings in a property.

Page | 1 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


Table of Contents

SECTION 1

COMMON DOCUMENTS A BUYER SHOULD REVIEW

3 Purchase Contract

3 MLS Printout

3 The Subdivision Disclosure Report

(Public Report)

3 Seller’s Property Disclosure

Statement (SPDS)

3 Covenants, Conditions and

Restrictions (CC&Rs)

4 Homeowner’s Association (HOA)

Governing Documents

4 HOA Disclosures

4 Community Facilities District

4 Title Report or Title Commitment

4 Loan Information & Documents

4 Home Warranty Policy

5 Affidavit of Disclosure

5 Lead-Based Paint Disclosure Form

5 Professional Inspection Report

5 County Assessors/Tax Records

5 Termites and Other Wood

Destroying Insects and Organisms

5 Foreign Investment in Real Property

Tax Act (FIRPTA)

SECTION 2

COMMON PHYSICAL CONDITIONS IN THE PROPERTY

A BUYER SHOULD INVESTIGATE

6 Repairs, Remodeling and

New Construction

6 Square Footage

6 Roof

6 Swimming Pools and Spas (Barriers)

6 Septic and Other On-Site

Wastewater Treatment Facilities

6 Sewer

7 Water/Well Issues

(Adjudications, CAGRDs)

7 Soil Problems

7 Previous Fire/Flood

7 Pests (Scorpions, Bed bugs,

Roof Rats, Termites & Bark Beetles)

8 Endangered & Threatened Species

8 Deaths & Felonies on the Property

8 Indoor Environmental Concerns

(Mold, Chinese Drywall, Radon Gas &

Carbon Monoxide, Drug labs, Other)

8 Property Boundaries

9 Flood Insurance / Flood Plain Status

9 Insurance (Claims History)

9 Other Property Conditions

(Plumbing, Cooling/Heating,

Electrical systems)

SECTION 3

CONDITIONS AFFECTING THE AREA SURROUNDING

THE PROPERTY THE BUYER SHOULD INVESTIGATE

9 Environmental Concerns

(Environmentally Sensitive

Land Ordinance)

10 Electromagnetic Fields

10 Superfund Sites

10 Freeway Construction

& Traffic Conditions

10 Crime Statistics

10 Sex Offenders

10 Forested Areas

10 Military and Public Airports

11 Zoning/Planning/

Neighborhood Services

11 Schools

11 City Profile Report

SECTION 4

OTHER METHODS TO GETTING INFORMATION ABOUT A PROPERTY

11 Talk to the Neighbors 11 Drive around the Neighborhood

SECTION 5

RESOURCES

11 Market Conditions Advisory

12 Fair Housing & Disability Laws

12 Additional Information Services: NATIONAL ASSOCIATION OF

REALTORS®, Arizona Government, Arizona Department of

Real Estate, and Arizona Association of REALTORS®

BUYER ACKNOWLEDGMENT p.13

Page | 2 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


Section 1

COMMON DOCUMENTS A BUYER SHOULD REVIEW

The documents listed below may not be relevant in every transaction, nor is the list exhaustive. Unless otherwise stated,

the real estate agent has not independently verified the information contained in these documents.

1 Purchase Contract

Buyers should protect themselves by taking the time

to read the real estate purchase contract and

understand their legal rights and obligations before

they submit an offer to buy a property.

http://bit.ly/1piCoUF

(AAR Sample Residential Resale Purchase Contract)

2 MLS Printout

A listing is a contractual agreement between the

seller and the listing broker and may authorize the

broker to submit information to the Multiple Listing

Service (MLS). The MLS printout is similar to an

advertisement. Neither the listing agreement nor the

printout is a part of the purchase contract between

the buyer and seller. The information in the MLS

printout was probably secured from the seller, the

builder, or a governmental agency, and could be

inaccurate, incomplete or an approximation.

Therefore, the buyer should verify any important

information contained in the MLS.

3 The Subdivision Disclosure

Report (Public Report)

A Subdivision Disclosure Report (Public Report) is

intended to point out material information about a

subdivision. Subdividers (any person who offers for

sale or lease six or more lots in a subdivision or who

causes land to be divided into a subdivision) are

required to give buyers a Public Report. Read the

Public Report before signing any contract to

purchase property in a subdivision. Although some

of the information may become outdated,

subsequent buyers can also benefit from reviewing

the Public Report. Public Reports dating from January

1, 1997, are available on the Arizona Department of

Real Estate (ADRE) website.

http://services.azre.gov/publicdatabase/SearchDevelopments.aspx

(ADRE Search Developments)

http://www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx

(ADRE Property Buyer’s Checklist)

ADRE does not verify the information in the Public

Report. Therefore, the Report could be inaccurate so

it should be verified by buyer.

4 Seller’s Property Disclosure

Statement (SPDS)

Most sellers provide a SPDS. This document poses a

variety of questions for the seller to answer about the

property and its condition. The real estate broker is

not responsible for verifying the accuracy of the items

on the SPDS; therefore, a buyer should carefully

review the SPDS and verify those statements of

concern.

http://bit.ly/1AkzsL5 (AAR Sample SPDS)

http://www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx

(ADRE Property Buyer’s Checklist)

5 Covenants, Conditions

and Restrictions (CC&Rs)

The CC&Rs are recorded against the property and

generally empower a homeowner’s association to

control certain aspects of property use within the

development. By purchasing a property in such a

development, the buyer agrees to be bound by the

CC&Rs. The association, the property owners as a

whole, and individual property owners can enforce the

contract. It is essential that the buyer review and agree

to these restrictions prior to purchasing a property.

http://www.realtor.com/BASICS/condos/ccr.asp

(NATIONAL ASSOCIATION OF REALTORS®)

http://www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx

(ADRE Property Buyer’s Checklist)

Page | 3 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


ADRE ADVISES:

“Read the deed restrictions, also called CC&Rs

(covenants, conditions and restrictions). You might find

some of the CC&Rs are very strict.”

Buyers should consult legal counsel if uncertain of the

application of particular provisions in the CC&Rs.

6 Homeowners Association (HOA)

Governing Documents

In addition to CC&Rs, HOAs may be governed

by Articles of Incorporation, Bylaws, Rules and

Regulations, and often architectural control

standards. Read and understand these documents.

Also, be aware that some HOAs impose fees that

must be paid when the property is sold, so ask if the

purchase of the property will result in any fees.

Condominium and planned community HOAs are

regulated by Arizona statutes. They are not under the

jurisdiction of the Department of Real Estate.

http://bit.ly/1mSfOOn

(Chapter 16 and 18 of the Arizona Revised Statutes –Title 33)

http://bit.ly/1rCq9kd (ADRE HOA Information)

7 HOA Disclosures

If purchasing a resale home in a condominium or

planned community, the seller (if fewer than 50 units

in the community) or the HOA (if there are 50 or

more units) must provide the buyer with a disclosure

containing a variety of information.

http://www.azleg.state.az.us/ars/33/01260.htm

http://www.azleg.state.az.us/ars/33/01806.htm

(Arizona Revised Statutes)

8 Community Facilities District

The Arizona Community Facilities District Act allows

for the formation of a community facilities district

(CFD) by a municipality or county for the purpose of

constructing or acquiring a public infrastructure. It is

important when purchasing property to determine

whether it falls within the boundaries of a CFD as this

may result in an additional tax burden upon the

owner. While the presence of a CFD may be noted

on the Residential Seller’s Property Disclosure

Statement, prospective buyers can further investigate

the issue by contacting the treasurer’s office or

assessor’s office for the county in which the property

is located.

9 Title Report or Title Commitment

The title report or commitment contains important

information and is provided to the buyer by the

title/escrow company or agent. This report or

commitment lists documents that are exceptions to

the title insurance (Schedule B Exceptions). Schedule

B Exceptions may include encumbrances, easements,

and liens against the property, some of which may

affect the use of the property, such as a future

addition or swimming pool. Make sure you receive

and review all of the listed documents. Questions

about the title commitment and Schedule B

documents may be answered by the title or escrow

officer, legal counsel, or a surveyor.

www.alta.org/consumer/questions.cfm

(American Land Title Association)

http://www.azinsurance.gov/

(Arizona Department of Insurance)

10 Loan Information and Documents

Unless a buyer is paying cash, the buyer must qualify

for a loan in order to complete the purchase. A buyer

should complete a loan application with a lender

before making an offer on a property if at all possible

and, if not, immediately after making an offer. It will

be the buyer’s responsibility to deposit any down

payment and ensure that the buyer’s lender deposits

the remainder of the purchase price into escrow prior

to the close of escrow date. Therefore, make sure you

get all requested documentation to your lender as

soon as possible.

http://1.usa.gov/1tfzFvP (Ginnie Mae Consumer Information)

http://1.usa.gov/1uNYamL (HUD)

http://www.homeloanlearningcenter.com/default.htm

(Mortgage Bankers Association)

http://www.namb.org/namb/Home_Buyers_Home.asp

(National Association of Mortgage Brokers)

11 Home Warranty Policy

A home warranty [policy] is a service contract that

typically covers the repair and/or replacement costs

of home appliances and major systems such as

heating, cooling, plumbing, and possibly other

components of a home that fail due to normal usage

and age. Coverage varies depending on the policy. Be

aware that pre-existing property conditions are

generally not covered. A home warranty may be part

of the sale of the home. If so, buyers should

Page | 4 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


thoroughly read the home warranty contract to

understand coverage, limitations, exclusions, and

costs associated with the policy.

12 Affidavit of Disclosure

If the buyer is purchasing five or fewer parcels of land

(whether improved or vacant), other than subdivided

land, in an unincorporated area of a county, the seller

must furnish the buyer with an Affidavit of Disclosure.

http://bit.ly/1p6CjDO

(AAR Sample Affidavit of Disclosure)

13 Lead-Based Paint Disclosure Form

If the home was built prior to 1978, the seller must

provide the buyer with a lead-based paint disclosure

form. Buyer is further advised to use certified

contractors to perform renovation, repair or painting

projects that disturb lead-based paint in residential

properties built before 1978 and to follow specific

work practices to prevent lead contamination.

http://www2.epa.gov/lead , http://1.usa.gov/1uO5wGS (EPA)

http://bit.ly/1rCq9kd (ADRE Lead Based Paint Information)

14 Professional Inspection Report

The importance of having a property inspected by a

professional inspector cannot be over-emphasized. An

inspection is a visual physical examination, performed

for a fee, designed to identify material defects in the

property. The inspector will generally provide the

buyer with a report detailing information about the

property’s condition. The buyer should carefully review

this report with the inspector and ask the inspector

about any item of concern. Pay attention to the scope

of the inspection and any portions of the property

excluded from the inspection.

www.btr.state.az.us (BTR – List of Certified Inspectors)

http://www.azashi.com/articles (Additional Information)

http://bit.ly/XvvS2X (NAR – Guidance for Hiring an Inspector)

15 County Assessors/Tax Records

The county assessor’s records contain a variety of

valuable information, including the assessed value

of the property for tax purposes and some of the

physical aspects of the property, such as the

reported square footage. The date built

information in the assessor’s records can be either

the actual or effective/weighted age if the

residence has been remodeled. All information on

the site should be verified for accuracy.

Apache:

http://bit.ly/1AsrXSi

Coconino:

http://1.usa.gov/1n2zoY0

Graham:

http://1.usa.gov/1oUTsLP

La Paz:

http://bit.ly/1BuxdWY

Mohave:

http://bit.ly/Yq6nAj

Pima:

http://1.usa.gov/1oUVefT

Santa Cruz:

http://bit.ly/1yRYwXl

Yuma:

http://bit.ly/1tgCImE

Cochise:

http://bit.ly/1oUS7ok

Gila:

http://bit.ly/Yq3bV9

Greenlee:

http://bit.ly/1md668Y

Maricopa:

http://1.usa.gov/1pWx1tF

Navajo:

http://bit.ly/1pWxgVA

Pinal:

http://1.usa.gov/1rOIQBr

Yavapai:

http://bit.ly/1AsANj5

16 Termites and Other Wood Destroying

Insects and Organisms

Termites are commonly found in some parts of

Arizona. The Office of Pest Management (OPM)

regulates pest inspectors and can provide the buyer

with information regarding past termite treatments n

a property.

http://opm.azda.gov (Office of Pest Management)

http://tarf.sb.state.az.us

(Obtain a Termite History Report on a Property)

www.sb.state.az.us/TermiteInsp.php (What You Should Know

about Wood-Destroying Insect Inspection Reports)

www.sb.state.az.us/index.php

(Additional Information on Pest Management)

17 Foreign Investment in

Real Property Tax Act (FIRPTA)

Foreign Investment in Real Property Tax Act (FIRPTA)

may impact the purchase of property if the legal

owner(s) of the property are foreign persons or nonresident

aliens pursuant to FIRPTA. If so, consult a

tax advisor as mandatory withholding may apply.

http://1.usa.gov/1ldMdnq (I.R.S. FIRPTA Definitions)

www.irs.gov/Individuals/International-Taxpayers/FIRPTA-Withholding

(I.R.S. FIRPTA Information)

Page | 5 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


Section 2

COMMON PHYSICAL CONDITIONS IN THE

PROPERTY A BUYER SHOULD INVESTIGATE

Because every buyer and every property is different, the physical property conditions requiring investigation will vary.

1 Repairs, Remodeling and

New Construction

The seller may have made repairs or added a room to

the property. The buyer should feel comfortable that

the work was properly done or have an expert evaluate

the work. Request copies of permits, invoices or other

documentation regarding the work performed.

http://www.azroc.gov/Acrobat/News/homeownersinfo.pdf

(10 Tips for Hiring a Contractor)

www.greaterphoenixnari.org (National Association of

Remodeling Industry – Phoenix Chapter)

http://www.nariofsouthernarizona.memberlodge.com/

(National Association of Remodeling Industry –

Southern Arizona Chapter)

https://apps-secure.phoenix.gov/PDD/Search/Permits

(City of Phoenix – Building Permit Records)

2 Square Footage

Square footage on the MLS printout or as listed by the

county assessor’s records is often only an estimate and

generally should not be relied upon for the exact

square footage in a property. An appraiser or architect

can measure the property’s size to verify the square

footage. If the square footage is important, you should

have it confirmed by one of these experts during the

inspection period in a resale transaction and prior to

executing a contract in a new home transaction.

https://boa.az.gov/directories/appraiser

(Arizona Board of Appraisals –List of Appraisers)

www.btr.state.az.us

(Board of Technical Registration – List of Appraisers)

3 Roof

If the roof is 10 years old or older, a roof inspection by a

licensed roofing contractor is highly recommended.

www.azroofing.org

(Arizona Roofing Contractors Association)

www.azroc.gov/Acrobat/News/homeownersinfo.pdf

(Hiring a Licensed Contractor)

4 Swimming Pools and Spas

If the property has a pool or a spa, the home

inspector may exclude the pool or spa from the

general inspection so an inspection by a pool or spa

company may be necessary.

Barriers: Further, each city and county has its own

swimming pool barrier ordinance.

www.aaronline.com/documents/pool_contacts.aspx (AAR)

http://azdh.gov/phs/oeh/pool_rules.htm

(Arizona Department of Health Services)

www.azleg.state.az.us/ars/36/01681.htm

(Arizona Revised Statutes)

5 Septic and Other On-Site

Wastewater Treatment Facilities

If the home is not connected to a public sewer, it is

probably served by an on-site wastewater treatment

facility (septic or alternative system). A qualified

inspector must inspect any such facility within six

months prior to transfer of ownership. For

information on current inspection and transfer of

ownership requirements, contact the specific county

environmental/health agency where the property is

located or the Arizona Department Environmental

Quality (ADEQ).

http://bit.ly/1DnuAr7 (ADEQ)

http://az.gov/app/own/home.xhtml

(File a Notice of Transfer Online)

6 Sewer

Even if the listing or SPDS indicates that the property

is connected to the city sewer, a plumber, home

inspector, or other professional should verify it. Some

counties and cities can perform this test as well.

Page | 6 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


7 Water/Well Issues

You should investigate the availability and quality of

the water to the property.

http://bit.ly/1rj4DFW or http://bit.ly/VAuDO8

(Wells & Assured/Adequate Water Information)

Adjudications: Arizona is undertaking several Stream

Adjudications, which are court proceedings to

determine the extent and priority of water rights in

an entire river system.

For information regarding water uses and watersheds

affected by these adjudications, and the forms upon

sale of the property, visit the Department of Water

Resources online.

http://bit.ly/1AsX14w

(Department of Water Resources – Adjudications)

Additionally, the Verde Valley Water Users assists

members in matters pertaining to the Gila River

System Adjudication.

www.verdevalleywaterusers.org (Verde Valley Water Users Association)

CAGRDs: The Central Arizona Groundwater

Replenishment District (CAGRD) functions to

replenish groundwater used by its members,

individual subdivisions (“member lands”) and service

areas of member water providers (“member service

areas”). Homeowners in a CAGRD pay an annual

assessment fee which is collected through the county

property tax process based on the amount of

groundwater served to member homes.

www.cagrd.com

(Central Arizona Ground Water Replenishment District)

8 Soil Problems

The soil in some areas of Arizona has “clay-like”

tendencies, sometimes referred to as “expansive soil.”

Other areas are subject to fissure, subsidence and

other soil conditions.

Properties built on such soils may experience

significant movement causing a major problem. If it

has been disclosed that the property is subject to

any such soil conditions or if the buyer has any

concerns about the soil condition or observes

evidence of cracking, the buyer should secure an

independent assessment of the property and its

structural integrity by a licensed, bonded, and

insured professional engineer.

http://www.re.state.az.us/PublicInfo/Fissures.aspx

(ADRE – Overview of Arizona Soils)

http://www.azgs.az.gov/hazards_problemsoils.shtml

(Arizona’s Swelling & Shrinking Soils)

http://azgs.az.gov/efmaps.shtml (Area Maps)

http://bit.ly/XvZEEO (Information on Land

Subsidence & Earth Fissures)

www.btr.state.az.us (State Certified Engineers & Firms)

9 Previous Fire/Flood

If it is disclosed there has been a fire or flood on the

property, a qualified inspector should be hired to

advise you regarding any possible future problems as

a result of the fire or flood damage and/or any

subsequent repairs. For example, if the property was

not properly cleaned after a flood, mold issues may

result. Your insurance agent may be able to assist you

in obtaining information regarding fire, flood, or

other past damage to the property.

10 Pests

Cockroaches, rattlesnakes, black widow spiders,

scorpions, termites and other pests are common in

parts of Arizona. Fortunately, most pests can be

controlled with pesticides.

Scorpions: Scorpions, on the other hand, may be

difficult to eliminate. If the buyer has any concerns or

if the SPDS indicates the seller has seen scorpions or

other pests on the property, seek the advice of a pest

control company.

Bed bugs: Infestations are on the rise in Arizona

and nationally.

Roof Rats: Roof Rats have been reported in some

areas by Maricopa County Environmental Services.

Termites: Consumer Information available from the

Office of Pest Management (OPM).

Page | 7 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


Bark Beetles: OPM reports bark beetles have been

reported in some forested areas.

www.desertusa.com/oct96/du_scorpion.html

(Information on Scorpions)

http://1.usa.gov/1p7xLx6 (Information on Bed Bugs)

http://www.cdc.gov/parasites/bedbugs/ (FAQ’s)

http://www2.epa.gov/bedbugs

(Bed Bugs: Get Them Out and Keep Them Out)

http://1.usa.gov/1ldZKLP (Maricopa County Roof Rats)

http://www.sb.state.az.us/ReTermites.php (Termite Information)

http://www.sb.state.az.us/BarkBeetles.php

(Bark Beetle Information)

11 Endangered & Threatened Species

Certain areas in the state may have issues related to

federally listed endangered or threatened species

that may affect land uses. Further information may

be obtained on the U.S. Fish and Wildlife website or

by contacting the appropriate planning/development

service department.

http://www.fws.gov/southwest/es/arizona/ (Arizona Ecological Services)

http://www.fws.gov/endangered/map/state/AZ.html

(Arizona Endangered Species)

12 Deaths and Felonies

on the Properties

Arizona law states that sellers and real estate

licensees have no liability for failure to disclose to a

buyer that the property was ever the site of a natural

death, suicide, murder or felony.

This information is often difficult to uncover;

however, the local law enforcement agency may be

able to identify calls made to a property address.

www.azleg.state.az.us/ars/32/02156.htm (Arizona Revised Statutes)

13 Indoor Environmental Concerns

Mold: Mold has always been with us, and it is a rare

property that does not have some mold. However,

over the past few years a certain kind of mold has

been identified as a possible contributor to illnesses.

Allergic individuals may experience symptoms

related to mold.

The Arizona Department of Health Services, Office

of Environmental Health, states:

“If you can see mold, or if there is an earthy or musty

odor, you can assume you have a mold problem.”

Chinese Drywall: There have been a few reports of

Chinese Drywall used in Arizona homes. Visit the

Consumer Product Safety Commission website for

more information.

Radon Gas and Carbon Monoxide: Radon gas and

carbon monoxide poisoning are two of the more

common and potentially serious indoor air quality

(IAQ) concerns. Both of these concerns can be

addressed by the home inspector, usually for an

additional fee. For information on radon levels in the

state, visit Arizona Radiation Regulatory Agency online.

Drug labs: Unremediated meth labs and other

dangerous drug labs must be disclosed to buyers by

Arizona law. A list of unremediated properties and a

list of registered drug laboratory site remediation

firms can be found online.

Other: For information on other indoor

environmental concerns, the EPA has a host of

resource materials and pamphlets online.

http://1.usa.gov/XylGqu (Indoor Air Quality Info Sheet)

www.epa.gov/mold (EPA)

http://www.epa.gov/iaq/pubs/index.html

(Publications & Resources)

www.cdc.gov/mold (Mold Information)

http://www.cpsc.gov/info/drywall/where.html

(Drywall Information Center)

www.azrra.gov/radon/index.html (About Radon)

http://www2.epa.gov/asbestos (Asbestos Information)

https://btr.az.gov/drug-lab-site-clean

(Unremediated - Search Public List and for Remediation Firms)

14 Property Boundaries

If the property boundaries are of concern, a survey

may be warranted. For example, a survey may be

advisable if there is an obvious use of property by

others (i.e., a well-worn path across a property

and/or parked cars on the property) or fences or

structures of adjacent property owners that appear

to be built on the property. For more information,

visit the Arizona Professional Land Surveyors online.

A list of surveyors may be obtained online from the

Board of Technical Registration.

http://www.azpls.org/ (AZ Professional Land Surveyors)

www.btr.state.az.us (AZ Land Surveyors)

Page | 8 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


15 Flood Insurance/Flood Plain Status

Your mortgage lender may require you to purchase

flood insurance in connection with your purchase of the

property. The National Flood Insurance Program

provides for the availability of flood insurance and

established flood insurance policy premiums based on

the risk of flooding in the area where properties are

located. Changes to the federal law (The Biggert-Waters

Flood Insurance Reform Act of 2012 and the

Homeowner Flood Insurance Affordability Act of 2014,

in particular) will result in changes to flood insurance

premiums that are likely to be higher, and in the future

may be substantially higher, than premiums paid for

flood insurance prior to or at the time of sale of the

property. As a result, purchasers of property should not

rely on the premiums paid for flood insurance on the

property previously as an indication of the premiums

that will apply after completion of the purchase. In

considering purchase of the property you should consult

with one or more carriers of flood insurance for a better

understanding of flood insurance coverage, current and

anticipated future flood insurance premiums, whether

the prior owner’s policy may be assumed by a

subsequent purchase of the property, and other

matters related to the purchase of flood insurance for

the property. You may also wish to contact the Federal

Emergency Management Agency (FEMA) for more

information about flood insurance as it relates to the

property.

www.coconino.az.gov/index.aspx?nid=641 (Flood Advisory)

http://coconino.az.gov/index.aspx?NID=976 (Flood Preparedness)

http://www.fcd.maricopa.gov/index.aspx (Maricopa County)

http://www.fcd.maricopa.gov/Floodplain/zone.aspx

(Floodplain Information -Maricopa County )

http://pdsd.tucsonaz.gov/pdsd/floodplain-information

(Tucson Flood Information)

http://az-santacruzcounty.civicplus.com/238/Flood-Control

(Santa Cruz County Flood Control Information)

Other Arizona Counties: Consult County Websites.

www.azgs.az.gov/hazards_flood.shtml (Floods & Debris Flow)

https://msc.fema.gov/portal (Flood Map Service Center)

www.floodsmart.gov (National Insurance Program)

16 Insurance (Claims History)

Many factors affect the availability and cost of

homeowner’s insurance. Property owners may

request a five year claims history from their

insurance company, an insurance support

organization or consumer reporting agency.

http://www.azinsurance.gov/consumerautohome.html

(AZ Department of Insurance)

http://bit.ly/VDp15E (Home Seller’s Disclosure Report)

17 Other Property Conditions

Plumbing: Check functionality.

Cooling/Heating: Make sure the cooling and heating

systems are adequate.

www.acca-az.org

(Air Conditioning Contractors of America – AZ State Chapter)

Electrical systems: Check for function and safety.

Section 3

CONDITIONS AFFECTING THE AREA SURROUNDING THE

PROPERTY THE BUYER SHOULD INVESTIGATE

Every property is unique; therefore, important conditions vary.

1 Environmental Concerns

It is often very difficult to identify environmental

hazards. The Arizona Department of Environmental

Quality (ADEQ) website contains environmental

information regarding the locations of open and

closed landfills (Solid Waste Facilities), wildfire

information, as well as air and water quality

information (and more).

www.adeq.state.az.us (ADEQ)

http://www.azdeq.gov/environ/waste/solid/index.html

(ADEQ-Solid Waste Facilities)

www.azdeq.gov/function/programs/wildfire.html

(Wildfire Information)

Page | 9 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


Environmentally Sensitive Land Ordinance:

Approximately two-thirds of the City of Scottsdale is

affected by the Environmentally Sensitive Land

Ordinance (ESLO), which requires some areas on

private property be retained in their natural state and

designated as National Area Open Space (NAOS).

http://www.scottsdaleaz.gov/codes/eslo

(Environmentally Sensitive Land Ordinance)

http://www.scottsdaleaz.gov/codes/eslo/naos

(Natural Area Open Space)

2 Electromagnetic Fields

For information on electromagnetic fields, and

whether they pose a health risk to you or your

family, visit the National Institute of Environmental

Health Sciences website.

www.niehs.nih.gov/health/topics/agents/emf/

(National Institute of Environmental Health Sciences)

3 Superfund Sites

There are numerous sites in Arizona where the soil

and groundwater have been contaminated by

improper disposal of contaminants. Maps may be

viewed on ADEQ’s website to see if a property is in an

area designated by the ADEQ as requiring cleanup.

www.epa.gov/superfund/ (EPA) , http://1.usa.gov/1u7YI72 (Spanish)

http://www.azdeq.gov/ (ADEQ)

4 Freeway Construction

and Traffic Conditions

Although the existence of a freeway near the property

may provide highly desirable access, sometimes it

contributes to undesirable noise. To search for

roadway construction and planning, visit the Arizona

Department of Transportation (ADOT) website.

www.azdot.gov (ADOT)

www.azdot.gov/Highways (Statewide Projects)

www.az511.com (Traffic Conditions – Alerts)

5 Crime Statistics

Crime statistics, an imperfect measurement at best,

provide some indication of the level of criminal activity

in an area.

http://1.usa.gov/1kSEpHc (Phoenix Crime Statistics)

http://tpdinternet.tucsonaz.gov/Stats/ (Tucson Crime Stats)

www.leagueaz.org/lgd (Crime Statistics All Arizona Cities

6 Sex Offenders

Since June 1996, Arizona has maintained a registry

and community notification program for convicted

sex offenders. Prior to June 1996, registration was

not required, and only the higher-risk sex offenders

are on the website. The presence of a sex offender in

the vicinity of the property is not a fact that the seller

or real estate agent is required to disclose.

www.azdps.gov/Services/Sex_Offender/

(Convicted Sex Offenders – Registry

& Community Program Notification)

http://www.nsopw.gov/en (National Sex Offender Public Site)

7 Forested Areas

Life in a forested area has unique benefits

and concerns. Contact county/city fire authority for

more information on issues particular to a community.

www.azsf.az.gov or www.firewise.org

(Protecting Your Property from Wildfire)

http://cals.arizona.edu/firewise

(Arizona Fire Wise Communities)

8 Military and Public Airports

The legislature has mandated the identification of

areas in the immediate vicinity of military and public

airports that are susceptible to a certain level of

noise from aircraft. The boundaries of these areas

have been plotted on maps that are useful in

determining if a property falls within one of these

areas. The maps for military and public airports may

be accessed on the Arizona Department of Real

Estate (ADRE) website. Additionally, the boundaries

of military and public airports in Maricopa County

may be viewed on the county website. These maps

are intended to show the area subject to a

preponderance of airport-related noise from a given

airport. Periodic over-flights that may contribute to

noise cannot usually be determined from these

maps.

Vacant land or lots may be for sale within areas of

high noise or accident potential zones. Because the

zoning of these lots may conflict with the buyer’s

ability to develop the property, the buyer should

verify whether development is prohibited.

Page | 10 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


Zoning regulations for these areas, may be found at

A.R.S.§28-8481.

http://www.re.state.az.us/AirportMaps/MilitaryAirports.aspx

(ADRE - Maps of Military Airports & Boundaries)

www.re.state.az.us/AirportMaps/PublicAirports.aspx

(ADRE - Maps of Pubic Airports & Boundaries)

9 Zoning/Planning/Neighborhood Services

Information may be found on community websites.

http://phoenix.gov/business/zoning (Phoenix)

www.ci.tucson.az.us/planning.html (Tucson)

www.azleague.org (Other Cities and Towns)

10 Schools

Although there is no substitute for an on-site visit to

the school to talk with principals and teachers, there

is a significant amount of information about Arizona’s

schools on the Internet. Visit the Arizona Department

of Education website for more information.

http://www.azed.gov/ (Arizona Department of Education)

ADRE ADVISES:

“Call the school district serving the subdivision to

determine whether nearby schools are accepting new

students. Some school districts, especially in the

northwest part of the greater Phoenix area, have placed

a cap on enrollment. You may find that your children

cannot attend the school nearest you and may even be

transported to another community.”

www.azre.gov/PublicInfo/PropertyBuyerChecklist.aspx (ADRE)

11 City Profile Report

Information on demographics, finances and other

factors are drawn from an array of sources, such as

U.S. Census Bureau, Bureau of Labor, Internal Revenue

Service, Federal Bureau of Investigation, and the

National Oceanic and Atmospheric Administration and

may be viewed on Homefair’s Website.

http://www.homefair.com/real-estate/city-profile/index.asp

(City Profile Report)

Section 4

OTHER METHODS OF GETTING

INFORMATION ABOUT A PROPERTY

Talk to the Neighbors

Neighbors can provide a wealth of information.

Buyers should always talk to the surrounding

residents about the neighborhood and the history of

the property the buyer is considering for purchase.

Drive around the Neighborhood

Buyers should always drive around the

neighborhood, preferably on different days at several

different times of the day and evening, to investigate

the surrounding area.

Section 5

RESOURCES

Market Conditions Advisory

The real estate market is cyclical and real estate

values go up and down. The financial market also

changes, affecting the terms on which a lender will

agree to loan money on real property. It is impossible

to accurately predict what the real estate or financial

market conditions will be at any given time.

The ultimate decision on the price a buyer is willing to

pay and the price a seller is willing to accept for a

specific property rests solely with the individual buyer

or seller. The parties to a real estate transaction must

Page | 11 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


decide on what price and terms they are willing to buy

or sell in light of market conditions, their own financial

resources and their own unique circumstances.

The parties must, upon careful deliberation, decide

how much risk they are willing to assume in a

transaction. Any waiver of contingencies, rights or

warranties in the Contract may have adverse

consequences. Buyer and seller acknowledge that

they understand these risks.

Buyer and Seller assume all responsibility should the

return on investment, tax consequences, credit effects,

or financing terms not meet their expectations. The

parties understand and agree that the Broker(s) do not

provide advice on property as an investment. Broker(s)

are not qualified to provide financial, legal, or tax

advice regarding a real estate transaction. Therefore,

Broker(s) make no representation regarding the above

items. Buyer and seller are advised to obtain

professional tax and legal advice regarding the

advisability of entering into this transaction.

Additional Information

NATIONAL ASSOCIATION OF REALTORS® (NAR)

www.realtor.org

NAR’S Ten Steps To Homeownership

http://bit.ly/YweGug

Home Closing 101

www.homeclosing101.org

Information About Arizona Government,

State Agencies, City & County Websites

Geographic Information System (GIS)

Maps and Information

www.azgs.az.gov/publications.shtml

Arizona Department of Real Estate

Consumer Information

www.azre.gov/InfoFor/Consumers.aspx

Arizona Association of REALTORS®

www.aaronline.com

http://bit.ly/1sSTprj (AAR - Sample Forms)

Fair Housing & Disability Laws

The Fair Housing Act prohibits discrimination in the

sale, rental, and financing of dwellings based on race,

color, national origin, religion, sex, familial status

(including children under the age of 18 living with

people securing custody of children under the age of

18), and handicap (disability).

http://1.usa.gov/1pbD5iW (US Government – HUD)

http://www.ada.gov/pubs/ada.htm

(Americans with Disabilities Act)

Page | 12 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


BUYER ACKNOWLEDGMENT

Buyer acknowledges receipt of all 13 pages

of this Advisory.

Buyer further acknowledges that there may be

other disclosure issues of concern not listed in

this Advisory. Buyer is responsible for making all

necessary inquiries and consulting the

appropriate persons or entities prior to the

purchase of any property.

The information in this Advisory is provided with the

understanding that it is not intended as legal or

other professional services or advice. These

materials have been prepared for general

informational purposes only. The information and

links contained herein may not be updated or

revised for accuracy. If you have any additional

questions or need advice, please contact your own

lawyer or other professional representative.

^ BUYER SIGNATURE

DATE

^ BUYER SIGNATURE

DATE

Page | 13 of 13 Arizona Department of Real Estate Buyer Advisory (October 2014)


SELLER

The Process In Selling Your House

Prepare House for Viewing by Prospective Buyers

Review Tips Included in This Guide

Market Property

Review Contract Presented

Escrow Open and Title Report Ordered w/Fidelity Nt’l Title Ins. Co.

House Inspections Completed

Inspections Submitted to Escrow Officer

Appraisal Ordered

Documents Compiled

Loan Documents Drawn by Lender

Documents are Executed at Fidelity National Title

Funding by Lender

Final Closing Deposits

Recording of Documents

Congratulations on the Sale of Your House

Packing and Moving!

For further explanation review with your Real Estate Professional

Fidelity National Title Insurance Company


SELLER

Home Selling Suggestions

It’s time to move on…

Whether you’re making a job change, retiring, need a bigger house, or just need a change of scenery, you want to get the

most for your house, with the right terms and in the shortest amount of time possible. You may think selling a home is easy, but

ask yourself this … How many houses did you look at before you bought the one you now own? How many other people do

you suppose went through those same homes before a buyer was found? You may think that the first person who walks through

your door will fall in love with your place, but perhaps you need to take a step back and find yourself a professional Realtor ® .A

good Realtor ® can save you money and help you get more for your home than you can by selling it yourself. After all, that is what

they are trained to do.

Your home is one of the most valuable possessions you will ever sell. It requires skill, experience, and understanding of the

current market. A licensed real estate professional has expertise and access to marketing tools that can maximize your return.

Pricing

One of the first things your Realtor ® will do is help you price your home effectively. Sometimes sellers mistakenly price their

houses higher, knowing that they can lower the price if it doesn’t sell. This can often backfire on the sellers. Buyers often shop

around before they buy and often recognize value in a specific price range because of this comparison shopping.

Using the Multiple Listing Service (MLS), the Realtor ® will prepare a Comparative Market Analysis (CMA) which involves a

survey of homes that are on the market, or have recently sold, that are similar to yours. Your Realtor ® will then advise you on the

additional value (or deficit) of your home’s unique features, and factor that into the equation. Depending upon how anxious you are

to sell (and how fast you need to close), your Realtor ® can suggest different strategies to help you get top dollar for your home.

Once you sign a Listing Agreement, your Realtor ® will develop a comprehensive marketing plan. But first, your Realtor ® will

take a look at your home and may suggest ways to make it show better. Remember what you looked for when you bought the

house? Take a look at the selling tips on the next few pages to get a better idea of how you should look at your home through

the “eyes of a buyer”.

Your Realtor ® will put your home on the MLS so other agents will become aware of your

property. Your Realtor ® will also network with other agents, conduct open houses, and

suggest ways to stimulate activity. Advertising is vital.

Comparative pricing

Value is a relative term. One owner’s quaint little cottage may be another’s airless

old money pit. Obviously then, you need some basis of objectivity – and you

can find it by having your Realtor ® rate your house against other similar houses in

like neighborhoods. You can count on your Realtor ® to be frank if your asking price

is too high. Your Realtor ® will work together with you to factor in all the important

aspects of your home.

Fidelity National Title Insurance Company


SELLER

Home Selling Tips

People usually decide within minutes whether or not they like your house. Remember to view your home as a buyer would

see it.

Kitchen

• The kitchen is the most important room in the house. Make it bright and attractive.

If it needs help, paint it and/or try new curtains.

• Make sure the kitchen is spotless. Check the stove, floor, windows, cabinets, etc.

• Clean the ventilating hood in the kitchen.

• If the kitchen floor is badly worn, replace it with new flooring.

• Replace any loose tiles on the counter and walls.

• Remove any appliances or knick-knacks you keep on the counters.

Clean, uncluttered counters will make the room look bigger.

Bathroom

• Repair any dripping faucets.

• Keep fresh towels in the bathroom.

• Remove any stains from toilets, sinks, bathtub and shower.

• If the sink, bathtub or shower drains too slowly, unclog it.

Outside

• Make sure the front door and porch are fresh, and clean looking.

Repaint the front door if necessary.

• Keep the lawn and shrubs trimmed and neat looking.

Freshly planted flowers are attractive and inviting.

• Sweep walkways.

• Paint your house if necessary. This can do more for the sales appeal than any

other item. If you don’t want to paint, consider touching up shutters or window

frames.

• Check the roof and gutters … any missing tiles/shingles to replace?

Gutters and downspout in place?

Living Areas

• Have all walls in top shape. Repair all cracks, nail pops or visible seams in drywall.

• Wash the windows.

• Replace broken glass and torn screens. Make sure windows open and close.

• Check ceiling for leak stains. Fix the source of the leak, repair the ceiling and paint.

• In painting or redecorating, avoid offbeat colors. Stick to white or easy to work with neutrals.

• Replace or re-dye faded curtains or bedspreads.

• If you have a fireplace, clean it out.

• Replace burned out light bulbs. Put in brighter light bulbs. Make sure light switches work.

• Clean floors and vacuum rugs.

• Straighten up the closets and get rid of excess items.

• Use air freshener to eliminate musty or unpleasant pet or cooking odors.

• Fix any doors or sliding glass doors that stick.

Garage

• Clean out the garage and dispose of anything you are not going to move.

Box up everything you won’t need until you’re in your new garage.

• Make sure the garage door opener is in good working condition.

Fidelity National Title Insurance Company


SELLER

Additional “Inside” Tip

• Neatness makes a room look bigger. Put excess furniture in storage. Avoid clutter

• Avoid having dirty dishes in the sink or on the counter.

• Keep toys in the children’s rooms. Bikes, in-line skates and skateboards should be made as inconspicuous as possible.

When your home is being shown

• Open draperies and shades to let in light. This will make rooms appear larger.

• Keep radios, stereos and TVs off or turned way down.

• Take pets outdoors when your house is being shown. Children should be quiet.

• Be courteous but don’t force conversations with potential buyers. They want to inspect your house, not pay a social call.

• Don’t mention furniture or furnishings you may want to sell unless asked. Trying to dispose of such items via the potential

buyer before they have purchased the house often loses the sale.

• Let the Realtor ® show your house and don’t tag along. The salesperson knows the buyers’ requirements and can better

emphasize the features of your home.

• Let the Realtor ® discuss the price, terms, possession and other factors with the buyers. He/she is eminently qualified to bring

negotiations to a favorable conclusion.

• Take your family away for the day, if your Realtor ® is holding an open house.

The 10 Deadly Sins of Selling Your House

Partially reprinted from the San Francisco Examiner – Sunday, March 3, 1996

It’s wise to follow others’ good examples and to learn by others’ mistakes. So that your move will be a sane and sound one,

here is a list of 10 mistakes to avoid.

1. Buying a replacement home before selling the old one.

The temptation may be great to buy a replacement home first. This way you’ll know where you are going and how much you’ll

be paying. And you won’t have to worry about being left out in the cold with nowhere to go if your home sells quickly.

However, the financial risks of buying first are great. It’s far better to sell your current home first and endure the

inconvenience of moving to an interim rental – which rarely happens – than it is to end up owning and paying for two homes

when you only want one.

2. Basing the list price of your home on the price you would like to get rather than on

market value.

Market value determines the price of your home – not wishful thinking. A buyer won’t pay more for your home just because

you think you need more money in order to purchase your next home.

Find out the market value of your current home by having your real estate agent prepare a comparative market analysis or

by getting an appraisal from a local appraisal firm. This will tell you the value of your home based on comparable sales

information. With this information, you can determine an accurate list price for the current market.

After you know what your home is likely to sell for, ask your agent to prepare a seller’s net sheet. It will tell you

approximately how much cash you will receive from he sale. Then, visit a mortgage broker or loan agent to get prequalified for

a mortgage. They will let you know what price range you can afford to buy a home in.

3. Failing to get a “termite” report (or other indicated reports) before listing a home for sale.

Sellers are often required to pay for eliminating wood pest (also know as “termite”) infestation when they sell their home. They

may also be asked to correct other defects. Sellers who know the condition of their home before they sell are in a better

position to negotiate a firm sale because they can disclose existing reports on the property to buyers before they make an offer.

Fidelity National Title Insurance Company


SELLER

4. Putting a home on the market before it is spruced up.

Buyers and real estate agents remember what they see. Their first impressions are lasting ones. If a property looks a mess

when it hits the market, that is how agents will remember it.

Most people lack the vision to imagine what the home will look like when it’s fixed up. It’s usually better to delay marketing

a home until it is spruced up for sale. Most buyers utilize Realtors’ ® services to purchase homes, and Realtors ® are more excited

about showing and selling homes when they are in mint condition.

5. Refusing to reduce a listing price that is too high for the market.

It’s hard to be objective about the value of your home. This is why it is important to get a professional opinion before setting

a list price. Over-priced listings often take a long time to sell. Thus they can sell for less than they would have if they were priced

right to begin with.

It is natural to want to get the most money possible when you sell. Competitive pricing is the way to achieve that result. If you

find that your list price is too high for the market, reduce your price sooner rather than later. The longer it sits on the market

unsold, the lower the ultimate selling price is likely to be.

6. Refusing to counter a low offer.

Sellers want to sell high; buyers like to buy low. A low offer from well-qualified buyers is better than no offer at all. A high offer

from unqualified buyers only leads to disappointment. The price buyers offer is not the most important part of their offer – if they

are willing to negotiate.

7. Insisting on being present when the home is shown to prospective buyers.

One way to discourage buyers from buying your home is to be home during showings. For buyers to decide to buy a home,

they first must discover and discuss, all of its flaws. Buyers are reluctant to say anything negative about a home in the sellers’

presence. It is best to leave your home when it is being shown to prospective buyers.

8. Listing with a contingency to find a replacement home.

This is like saying that your home might be for sale. Serious buyers make offers on homes that are definitely for sale.

Otherwise, buyers could wait in vain for unrealistic seller to find an acceptable replacement home.

Sellers often want a contingency to find a replacement home so they don’t have to move twice. To avoid having to move to

an interim rental, list your home with a provision that you may need to remain in possession and rent back the property for a

period of time after closing. At lease, the buyers know they have bought a home, even if they can’t move in right away.

9. Setting up a complicated showing procedure that discourages showings.

A home that can’t be shown can’t be sold. The easier it is to show a home, the more often it will be

shown and the quicker it will be sold. There is usually a direct correlation: the more showings a

home receives, the less time it takes to sell.

10. Refusing to do anything to get your home ready to sell.

The way most people live in their homes is usually very different from the way a

home should look when it goes on the market. In order for someone to want to buy

a home, they must be able to envision themselves living there. Most sellers have to

de-clutter and clean their homes – at the very least.

Often there is quite a bit more work that needs to be done before a home is ready

to sell. For example, in order to get the highest price possible when you sell a car, it

is wise to have it detailed to look its shiny best. The same concept applies to selling

houses. Buyers pay a premium for homes that are in move-in condition.

Fidelity National Title Insurance Company


SELLER

Wood Destroying Organism Report

(Termite Inspection)

This report is prepared by a State Certified Inspector as evidence of the existence or absence of wood destroying organisms

or pests which were visible and accessible on the date the inspection was made. In almost every instance when they receive a

request for an inspection the caller refers to it as a “termite inspection”. It seems almost everyone believes that the inspections

are limited to inspecting for signs of termite activity. This conception is only partially correct. In addition to looking for subterranean

termites, the inspector is looking for signs of activity from other wood destroying organisms such as:

• Dry wood termites

• Carpenter ants

• Carpenter bees

• Wood destroying fungus

In preparing your house for this inspection you, as the homeowner, can do certain things that will save money and ensure a

clean report at the time of the initial inspection. You can check your house for conditions conducive to infestation. These conditions

are easy to spot and in most instances are simple to correct.

Walk around the exterior of your house and check for these conditions.

1. Wood to Earth Contact

a. If you have a wood fence around your yard – does any portion of the wood fence or wood gate come in contact with the

house and the soil abutting the house?

If this condition exists you can correct it by either:

• Digging the soil away from the wood that is in contact with the house

• Cutting the wood so that you have relieved the contact with the soil

• Placing a piece of sheet metal between the structure and the wood in contact with the soil

• Trenching around the base of the board to relieve all contact with the soil and filling the trench with concrete

b. Concrete form boards of trellises in the soil and in contact with the house?

• Correct this condition by removing the trellises and the form boards

c. Patio posts in the soil?

• Correct this condition by trenching the soil around the base of each post to relieve all soil contact and fill the trench

with concrete.

d. Wood patio built directly onto the soil?

• Correct this condition by making certain that no part of the patio construction is in direct contact with the house.

e. Railroad ties or other wood used to form a planter is touching the house?

• Correct this condition by cutting the wood to relieve contact with the house or place a piece of sheet metal between

the wood and the house.

2. Excessive Cellulose Debris

a. Overgrown dried grass or dried landscape cuttings along the stem wall can attract termites.

• You can correct this condition by cutting all of the dried grass away from the stem wall of the house and raking the

landscape cutting away from the stem wall.

Fidelity National Title Insurance Company


SELLER

3. Faulty Grades

a. While inspecting the exterior of your house, make certain that all drainage off the roof is able to flow away from the

structure. Check all soil evaluation around the structure making sure that water can flow away from the stem wall. If you

find conditions that allow water to accumulate and stand along the stem wall you must correct it.

• You can correct this condition by grading the soil to allow the water to flow away from the house or filling in soil to a

grade that allows for the flow of water away from the stem wall, if you must fill in soil, be sure that you do not raise

the soil level above the stem wall.

4. Excessive Moisture

a. While inspecting your house (interior and exterior) check for water leaks from:

• Showers

• Through your roof

• Outside faucets

• Correct these conditions by stopping the leaks that provide the termites with a moisture source.

b. Leaking drainage from your cooling systems often leak directly on to the soil abutting the house keeping the soil

constantly wet.

• You can correct this condition by extending the draining outlet by adding plastic piping allowing it to drain away from

the house.

Most of these conditions are easy to spot and inexpensive to correct. Be a smart seller and address these conditions before

your house is in escrow. If you aren’t certain about the condition of your property, seek the assistance of a State Certified

Inspector to assist you.

Fidelity National Title Insurance Company


SELLER

The Advantages of Having a

Fidelity National Home Warranty on Your Home

What is a home warranty?

A home warranty insures and covers unknown pre-existing conditions on mechanical, electrical and plumbing parts and systems

of a house for one year. The policy is renewable at the end of the year. A Spanish version of the policy is available upon

request.

If I’m buying a home, why should I insist on a Fidelity National Home Warranty?

A home with a Fidelity National Home Warranty policy provides you with additional protection and peace of mind. Fidelity

National Home Warranty provides you with more options to choose from at a competitive price. Fidelity National Home Warranty

is part of the Fidelity National Financial, which is traded on the New York Stock Exchange (Symbol FNF).

If I’m selling a home, why should I provide a home warranty?

Providing a Fidelity National Home Warranty as an incentive to the buyer may be the edge you need to sell your home versus

another home without a home warranty. You are also eligible to receive home warranty coverage during the listing period. Ask

your agent or lender for copy of the seller’s coverage option. In addition, you’ll be able to provide this to

your buyer at a competitive price.

What type of coverage is available?

There are several policies and options to choose from with Fidelity National Home

Warranty. Review the application to select the best coverage for you. The Standard

Plan offers a basic coverage. Whereas, the Comprehensive Plus Plan covers 29

additional items plus Air Conditioning/Evaporative Cooler. Fidelity National Home

Warranty also offers a Condominium/Townhouse Plan and a Mobile Home Plan.

Review the application to choose options that you may consider important.

Because warranties are specific to the home buyers needs, you should consult

with your real estate professional for information and orderly assistance.

When is the home warranty put into effect?

At the close of escrow payment is due to the home warranty company. Your escrow

officer will have the information and the invoice showing which type of coverage you

have requested. A copy of the policy is mailed to the new policy holder. During the transit

period, the policy is in effect.

For an application or additional questions,

please contact Fidelity National Home Warranty at 1-800-308-1422.

Fidelity National Title Insurance Company


SELLER

Home Inspections

As you put your home on the market, here are some things you can do to improve the presentation of your home. These are

items you can do prior to your home being professionally inspected by the buyer-selected home inspection company.

Approximately 45% of the homes sold will have an inspection. The typical home inspection does not cover cosmetics such as

clean carpets and fresh paint. It will cover the functionality, safety, and livability of the house.

The typical home inspection covers the exterior, walls, roof, outside equipment, and the interior, windows, kitchen appliances,

bathroom fixtures, etc. It will take an estimated hour for every 1,000 square feet.

Assuming your home will be inspected, here is a list of recurring items you can address up front:

• Faucets and pipes. You may be quite willing to live with that dripping or leaking faucet, but don’t assume the buyer will.

• Windows. Cracked glass or leaking seals on dual pane windows are not acceptable to most buyers.

• Ground Fault Circuit Interrupters (GFCIs) should be in working order. To test them, push the test button. This turns the power

off to the outlet. Plug in an appliance and make sure. Press the reset button and the appliance should work. Older houses

many not have GFCIs. If you have them, they should work.

• Toilets. Check for leaks and cracks in toilet bowls. Make sure they are not loose.

• Extension cord or handyman wiring. If you’ve been inventing your own wiring out on the patio or in the garage, it can be a

negative issue. If any wiring is exposed it should be in a conduit, a junction box to protect it.

• A/C Filters. Change them. Dirty air filters affect the performance of the heating/cooling system. Consider having the unit

serviced and cleaned so that it will operate properly when tested.

• Pool, pool filters and pool lights. Check for cracks and rust in the pool plaster. Make sure the pipes and filters are not

leaking and that the gauges work. Ensure the pool lights work.

• Hot Water. The hot water should always be on the left side in sinks, tubs and showers.

• Roofs. Any missing shingles or tiles should be replaced. Any flashing that needs resealing should

be resealed.

• Doors. They should latch and lock, if a lock is installed.

Two additional points: Listen to your Realtor ® .They see many properties and other

homes competing with yours for the buyers’ attention. As you fill out the Sellers’

Property Disclosure Statement (SPDS), ask them about any issues that come up.

Also, consider having a home inspection at the time you list your home.

Pre-inspected homes typically move faster from offer to escrow. With a home

inspection report in hand, you and your Realtor ® can determine in advance which

items you’d be willing to address. Plus, you’ll have a better sense that your “price”

is in line with the overall condition of the property.

When you sell a home, whatever you can do to “accentuate” the positive and

eliminate the “negative” is to your advantage.

Fidelity National Title Insurance Company


SELLER

Guide to Closing Costs

Seller Generally Pays …

• Real Estate Commission

• Document Preparation Fee for Deed

• Any City Transfer/Conveyance Tax (according to contract)

• Any loan fees required by buyers’ lender

• Payoff of all loans in sellers’ name (or existing loan balance if being assumed by buyer)

• Interest accrued to lender being paid off

• Statement fees, reconveyance fees and any loan prepayment penalties

• Termite inspection and work (according to contract)

• Home Warranty (according to contract)

• Any judgments, tax liens, etc., against the seller and recording charges to clear

all documents of record against seller

• Tax proration (for any unpaid taxes up to time of transfer of title)

• Any unpaid Homeowner’s dues

• Homeowners’ Association Document fee and Transfer fees

• Any bonds or assessments (according to contract)

• Any and all delinquent taxes

All items negotiable and subject ot Contract.

Fidelity National Title Insurance Company


SELLER

For Sale By Owner

You may think that selling your home without a licensed real estate agent is a good way to save a little money. Although it

may seem like a great idea, are you aware of the laws, disclosures and various other requirements necessary to complete a

lawful and successful sale transaction? Here are some questions to assess if selling your home is right for you:

• Do you have the time and knowledge it takes to sell your home?

• Do you know how to determine the market value of your home?

• Do you know where and how to advertise your home effectively for maximum exposure?

• Do you know how to prepare your home to make it the most appealing to buyers?

• Do you know how to obtain detailed information buyers will expect to have about

the property?

• Do you know how to determine if a buyer is qualified for financing?

• Do you know what to ask for as loan qualification verification?

• Do you have the proper documents to provide to potential buyers to make

an offer?

• Do you have the knowledge to properly prepare a legal, binding sales contract?

• How will you handle offers, negotiations, and counter offers with a buyer?

• Do you know that buyers will expect you to lower your price because there are no

Realtors ® involved?

• What will you do when you receive an acceptable offer?

• Are you aware of the escrow and title process and know when to involve a title company?

• What costs are associated with selling your home such as attorney’s fees, home warranty and escrow fees?

• Are you ready to devote a fair amount of your free time for showings and open houses?

These are just a few of the questions you should ask yourself when trying to decide if selling your own home is right for you.

Fidelity National Title Insurance Company


SELLER

Benefits from a Professional Realtor ®

A licensed Realtor ® can make your home selling experience effortless. Consider the following benefits of using a Realtor ®

before you decide to attempt to sell your own home:

• A Realtor ® can provide you with a complete market analysis and current market value.

• A Realtor ® can offer effective advertising of your property and lots of exposure.

• A Realtor ® knows what you need to do to prepare your property for selling.

• A Realtor ® will work for you to get the highest price possible for your home.

• A Realtor ® knows all the right questions to ask to screen potential buyers for you.

• A Realtor ® has real estate documents and disclosures as required by law.

• A Realtor ® has the expertise to negotiate on your behalf with buyers and other agents.

• A Realtor ® knows what to do once you have accepted a buyer’s offer.

• A Realtor ® can resolve unpredictable and complicated problems that can arise.

• A Realtor ® will guide you through the process of deadlines and requirements to be sure you are complying with the law and

terms of your contract.

• Your Realtor ® works with you and to assure your transaction is successful.

The decision to sell your own home can only be determined by you. Once you consider the many facets of a real estate

transaction, you may find that working with a licensed, real estate professional is one of the

best decisions you’ve ever made!

Fidelity National Title Insurance Company


ESCROW

The Life of an Escrow

Buyer

Chooses a Realtor

Seller

Chooses a Realtor

Buyer Obtains Pre-Approval

by Lender

Fidelity National Title

Insurance Company

Seller Prepares Home

for Showings

Realtor shows

Buyer Homes

Buyer Finds Home

and Offers Contract

Seller Reviews

& Accepts Contract

Title Commitment

Delivered to Buyer

All

Inspections Ordered

Escrow Opened at

Fidelity National Title and

Title Report Ordered

Inspection Reports

Sent to Parties

Lender Orders

Appraisal

Buyer Informs Fidelity

National Title of Home

Owners Insurance Company

Closing Documents

Prepared by

Fidelty National Title

Lender Prepares & Sends

Loan Documents

to Fidelity National Title

Lender gives Buyer

Final Approval

Buyer & Seller

Sign Documents

Buyer Deposits

Required Closing Funds

with Escrow

Loan Documents sent

back to Lender for Review

Escrow Closed

Documents

Recorded

Loan is

Funded by Lender

Fidelity National

Title Disburses Funds

Buyer Receives Keys

to their New Home

Welcome

Home!

Fidelity National Title Insurance Company


ESCROW

The Escrow Process

What is an Escrow?

When opening an escrow, the buyer and seller establish terms and conditions for the transfer of ownership of that property.

These terms and conditions are given to a neutral third party known as the escrow (Fidelity National Title Insurance Company).

The Escrow Officer, in turn has the responsibility of seeing that these terms of the escrow are carried out. The escrow is an independent

third party – the vehicle by which the interest of all parties to the transaction are protected.

How Does the Escrow Process Work?

The Escrow Officer takes instructions based on the terms of your Purchase Contract and the lender’s requirements. The

Escrow Officer can hold inspection reports and bills for work performed as required by the Purchase Contract. Other elements

of the escrow include hazard and title insurance, and the conveyance deed from the seller to you. Escrow cannot be

completed until these items have been satisfied and all parties have signed escrow documents.

What Does the Escrow Company Do?

The escrow company is a neutral third party, such as Fidelity National Title, that maintains the escrow and impartially

oversees the escrow process, ensuring that all conditions of the sale are properly met.

The escrow duties include:

• Serve as the neutral agent and the liaison between all parties involved.

• Request a Preliminary Title Search to determine the status of title to the property.

• Comply with the lender’s requirements as specified on its instructions to escrow.

• Receive and handle purchase funds from the buyer.

• Prepare or secure the deed and documents related to the escrow.

• Prorate taxes, interest, insurance and rents.

• Secure releases of all contingencies or other conditions imposed on the escrow.

• Record the deed and any other documents.

• Request the title insurance policy.

• Close the escrow pursuant to instructions supplied by the seller, buyer, and lender, if any.

• Distribute funds as authorized by the instructions, including charges for title insurance, recording fees, real estate

commissions and loan payoffs.

• Prepare final statements for all parties involved that account for the disposition of all funds held in the escrow account.

How Do I Open an Escrow?

When your offer has been accepted, your real estate agent will open escrow. As soon as you execute the Purchase Contract,

he/she will place your initial deposit (earnest money) into an escrow account at Fidelity National Title.

Written evidence of the deposit is generally included in your copy of the sales contract. The funds will then be deposited in a

separate escrow account and processed through your local bank. You will receive a receipt for the funds from Fidelity National Title.

What Information Will I Have to Provide?

You may be asked to complete a State of Identity as part of the paperwork. Because many people have the same name, the

Statement of Identity is used to identify the specific person involved in the transaction through such information as date of birth,

social security number, etc. This information is strictly confidential.

How Long is an Escrow?

The length of an escrow is determined by the terms of the Purchase Contract and can range from a few days to several

months. The average length of an escrow is usually 30 to 45 days.

When Do I Sign Closing Documents and Where?

A few days before closing, your Fidelity Escrow Officer or your Realtor ® will contact you to make the appointment for you to

sign your closing documents. At this time, your Escrow Officer will also tell you the amount of money you will need to bring in.

Fidelity National Title Insurance Company


ESCROW

Your Appointment

This is a list of items you will need in preparation for your appointment to sign escrow papers:

• Identification – All parties – There are several acceptable forms of identification which may be presented. One of the

following forms must be presented at the signing of escrow in order for the signature to be notarized: a current driver

license, or State of Arizona Department of Motor Vehicles ID card.

• Cashier’s Check - Buyers – You need a cashier’s check or a certified check issued by an Arizona or your (your state)

financial institution made payable to Fidelity National Title in the amount given to you by your Escrow Officer. A personal

check will delay the closing since Fidelity is required by law to have “good funds” before disbursing funds from the escrow.

• Lender’s Requirements – Buyers – Check with your lender to make sure you have satisfied all your lender’s requirements

before coming to Fidelity National Title to sign your papers.

• Fire and Hazard Insurance – Buyers – You must have fire and hazard insurance in place before the lender will send money

to Fidelity National Title to fund the loan. Whenever you buy a home, you must have insurance. Once you have spoken to

your insurance agent, call Fidelity National Title with the insurance agent’s name and phone number so they can make sure

that the policy complies with your lender’s requirements.

• Title to Your Home – Buyers – You may refer to the “Ways to Take Title” (on the following page) for general information

with regard to holding title, but it is best to contact your attorney or tax consultant.

Final Proceeds Check - Sellers

The proceeds check is disbursed upon the close of escrow and your Escrow Officer is able to verify with the County Recorder

that the documents have recorded and legal transfer has occurred. The proceeds check can be delivered to your Realtor ® so

that he/she can deliver it to you, or you may make alternate arrangements with Fidelity National Title Insurance Company.

Escrow Closing

The escrow closing is the legal transfer of title to the property from the seller to the buyer.

Usually the Conveyance Deed and the Deed of Trust are recorded within one working day

of Fidelity National Title’s receipt of loan funds. This completes the transaction and

signifies the close of escrow.

When Will I Get the Deed?

The deed to your new home will be mailed directly to you by the County

Recorder’s Office several weeks after the close of escrow. Be sure to keep it in

a safe place.

Fidelity National Title Insurance Company


TITLE

Ways to Take Title in Arizona

Community Property

Joint Tenancy with Right of

Survivorship

Community Property with

Right of Survivorship

Tenancy in Common

Requires a valid marriage

between two persons.

Parties need not be

married; may be more than

two joint tenants.

Requires a valid marriage

between two persons.

Parties need not be

married; may be more than

two tenants in common.

Each spouse holds an

undivided one-half interest

in the estate.

Each joint tenant holds an

equal and undivided

interest in the estate, unity

of interest.

Each spouse holds an

undivided one-half interest

in the estate.

Each tenant in common

holds an undivided

fractional interest in the

estate. Can be disproportionate,

e.g., 20% and 80%;

60% and 40%; 20% 20%,

20% and 40%; etc.

One spouse cannot partition

the property by selling his

or her interest.

One joint tenant can

partition the property by

selling his or her joint interest.

One spouse cannot partition

the property by selling his

or her interest.

Each tenant’s share can be

conveyed, mortgaged or

devised to a third party.

Requires signatures of both

spouses to convey or

encumber.

Requires signatures of all

joint tenants to convey or

encumber the whole.

Requires signatures of both

spouses to convey or

encumber.

Requires signatures of all

tenants to convey or

encumber the whole.

Each spouse can devise

(will) one-half of the

community property.

Estate passes to surviving

joint tenants outside of probate.

Estate passes to the

surviving spouse outside of

probate.

Upon death the tenant’s

proportionate share passes

to his or her heirs by will or

intestacy.

Upon death the estate of

the decedent must be

“cleared” through probate,

affidavit or adjudication.

No court action required to

“clear” title upon the death

of joint tenant(s).

No court action required to

“clear” title upon the first

death.

Upon death the estate of

the decedent must be

“cleared” through probate,

affidavit or adjudication.

Both halves of the community

property are entitled to

a “stepped up” tax basis as

of the date of death.

Deceased tenants share is

entitled to a “stepped up”

tax basis as of the date of

death.

Both halves of the

community property are

entitled to a “stepped up”

tax.

Each share has its own tax

basis.

Note: Arizona is a community property state. Property acquired by a husband and wife is presumed to be community

property unless legally specified otherwise. Title may be held as “Sole and Separate.” If a married person acquires title as

sole and separate, his or her spouse must execute a disclaimer deed to avoid the presumption of community property. Parties

may choose to hold title in the name of an: entity, e.g., a corporation; a limited liability company; a partnership (general or

limited), or a trust. Each method of taking title has certain significant legal and tax consequences; therefore, you are

encouraged to obtain advice from an attorney or other qualified professional.

Fidelity National Title Insurance Company


TITLE

Title Insurance

What is Title Insurance?

Title insurance is a contract of indemnity which guarantees that the title to the property is as reported. If its not as reported,

we will reimburse the buyers for actual loss or damage under the condition specified in the policy. The title policy covers the

insured for their loss up to the amount of the policy.

Title insurance assures owners that they are acquiring clear title. Title insurance is designed to eliminate risk or loss caused

by defects in title from the past. Title insurance provides coverage only for title problems which were already in

existence at the time the policy was issued.

Title Search

Fidelity National Title works to eliminate risks by performing a search of the public records or through our own plant. The

search consists of public records, laws and court decisions pertaining to the property to determine the current recorded

ownership, any recorded liens or encumbrances or any other matters of record which could affect the title to the property. When

a title search is complete, Fidelity National Title issues a preliminary title report detailing the current status of title.

A preliminary report contains vital information which can affect the close of escrow: ownership of the subject property, how

the current owners hold title, matters of record that specifically affect the subject property or the owners of the property, a legal

description of the property and an informational plat map.

What Does a Title Policy Cover?

Not all risks can be determined by a title search, since certain things such as

forgeries, identity of persons, incompetency, failure to comply with the law, or incapacity

cannot be disclosed by an examination of the public records.

The preliminary title report is an offer to insure under certain situations, the title

policy is a contract that gives coverage against such problems.

The Arizona Land Title Association (ALTA) is the standard policy of title insurance

in Arizona.

What Does ALTA Cover?

• A forged signature on the deed.

• Mistakes in the interpretation of wills or other legal documents.

• Deeds delivered without the consent of the grantor.

• Deeds and mortgages signed by persons not of sound mind, by minors or by someone

listed as single but in fact, married.

• Impersonation of the real owner.

• Errors in copying or indexing.

• Falsification of records.

• Undisclosed or missing heirs.

• Recording mistakes.

• With regard to lenders coverage it covers:

– the priority of the insured mortgage

– the invalidity or unenforceability of the insured assignment

– the invalidity or unenforceability of the lien of the insured mortgage of the title.

For a more comprehensive list of policy coverages, please refer to the Title Policy Comparison Chart.

Fidelity National Title Insurance Company


TITLE

Title Policy Comparison

COVERED TITLE RISKS

Standard

Owner’s ALTA

Policy

FNT Plain

Language

Policy

ALTA

Homeowner’s

Policy

1. Someone else owns an interest in your title X X* X*

2. A document is not properly executed (signed), acknowledged or delivered” X X* X*

3. Forgery, fraud, duress, incompetence, incapacity or impersonation” X X* X*

4. Defective recording of any document X X* X*

5. There are no Covenants, Conditions and Restrictions” X X* X*

6. There are recorded Covenants, Conditions and Restrictions limiting the use of your land” X X* X*

7. There is a lien on your title because of a previous Deed of Trust X X* X*

8. There is a lien on your title because of a recorded Judgment, Tax or Special Assessment” X X* X*

9. There is a lien on your title because of a recorded charge by a Homeowner’s Association X X* X*

10. Available to investors (1 to 4 units) X X X

11. The title is unmarketable X X X*

12. Mechanics lien—Unrecorded mechanic’s lien protection for work contracted by the seller X X

13. Forced removal of existing structure because it violates an existing zoning law X X

14. Forced removal of existing structure because it violates a restriction in Schedule B X X

15. Forced removal of existing structure because of encroachment (other than a boundary wall/fence) X X

16. Single family residence violates a restriction in Schedule B or a zoning ordinance X X

17. Pays rent for substitute land or facilities X X

18. Unrecorded lien by a Homeowner’s Association X X

19. Unrecorded easements (i.e., other than easements shown in Schedule B of policy)” X X

20. Rights under unrecorded leases, unrecorded contracts of sale or options” X X

21. Plain Language X X

22. Legal access - You do not have a legal right of access to and from your land X X

23. Physical access - Vehicular and pedestrian X

24. Building permit violations NEW

25. Subdivision compliance NEW

26. Life of the policy coverage against forgery NEW

27. Life of the policy coverage against encroachment NEW

28. Life of the policy coverage against structural damage from mineral extraction +

29. Life of the policy Living Trust coverage +

30. Map not consistent with legal description +

31. Post policy automatic increase in coverage up to 125% NEW

32. Other defects, liens, or encumbrances” X

Plain language not available on split lot or sectional Offered previously at an additional charge *Available on LTAA Standard Owner’s Policy

NOTE: Because of the nature of location of certain properties, an inspection of the property may be necessary to determine if additional exceptions from

coverage need to be shown in Schedule B of the residential policy. All exceptions from coverage will be noted in the Commitment for Title Insurance.

The foregoing table is intended to highlight only some of the aspects of coverage and is not to be construed as expanding or limiting the coverage as

set forth in the mentioned title policies. Copies of these policies are available upon request. Any decision on coverage should be made only after review

of the policies themselves.

Fidelity National Title Insurance Company


TITLE

Explanation of Title Commitment

Also referred to as a Prelim., or Preliminary Title Commitment.

Schedule A:

The Schedule A of your title commitment contains general information about the transaction such as the property’s legal

description, sales price, loan amount, lender, and the names and marital status of both the seller and buyer.

Schedule B:

The Schedule B contains exceptions that are associated with the property such as easements, homeowners association

by-laws, covenants, conditions and restrictions (CC&R’s), recorded easements, leases and various other items of records that

transfer along with the subject property. They are called “exceptions” because clear title will be given and the buyer’s rights are

subject to these items.

Requirements:

Requirements are items that Fidelity National Title Insurance Company must remove and/or record with the county in order to

provide a clear title to the seller. Requirements may include property tax, tax liens, judgments, assessments, homeowners

association dues, or a variety of other items that may be associated with the property or property owners.

If at any time you require assistance to interpret your title commitment or if you have questions regarding your title

commitment, please contact your escrow office. Our staff will be happy to assist you!

Title Premiums

Just how much is the title insurance going to cost you? Not as much as your probably think. Only a small percentage of

closing fees are actually for title insurance protection. Title insurance is usually less than 1 percent of the purchase price of your

property and less than 10 percent of your total closing costs.

Although title insurance is highly labor-intensive business, requiring skilled personnel and the storage of data, in some cases

dating back over a hundred years, we at Fidelity National Title have continued to find new and more efficient ways of delivering

our services to you.

For more information, contact Fidelity National Title Insurance Company.

Fidelity National Title Insurance Company


TITLE

Definitions of Closing Costs

Below is an overview of the types of closing costs you may incur on your own. Some are one time fees, while others recur

over the life of the loan. When you apply for your loan, you will receive a Good Faith Estimate of Settlement Charges.

Loan Origination Fee

This fee covers the lender’s administrative costs in processing the loan. A one time fee often expressed as a percentage of

the loan.

Appraisal Fee

This is a one time fee that pays for an appraisal - a statement of property value - for the lender. The appraisal is made by an

independent fee appraiser.

Credit Report Fee

This one time fee covers the cost of the credit report that is run by an independent credit reporting agency.

Title Insurance Fees

There are two title policies, a lender’s policy (which protects the lender against loss due to defects in the title) and an

owner’s title policy (which protect you as the buyer). These are both one time fees.

Escrow Fee

Fee charged by the title company to handle funds and documents of buyers and sellers.

Document Preparation Fee

There may be a separate, one time fee that covers the preparation of the final legal papers, including the note and deed of

trust.

Prepaid Interest

Depending on the time of the month your loan closes, this charge may vary from a full month’s interest to just a few days. If

your loan closes at the beginning of the month, you will probably have to pay the maximum amount. If your loan closes at the

end of the month, you will only have to pay a few days’ interest.

PMI Premium

Depending on the amount of your down payment, you may be required to pay an up front fee for mortgage insurance (which

protects the lender against loss due to foreclosure). You may also by required to put a certain amount for PMI into a special

reserve account (an impound account) held by the lender.

Taxes and Hazard Insurance

Depending on the month you close, you may be required to reimburse the seller for property taxes. You will also need to pay

for an entire year’s hazard insurance premium up front. In addition, you may also be required to put a certain amount for taxes

and impounds into a special reserve (impound) account held by the lender.

Recording Fees

Fee paid to county to record documents.

Inspection Fees

Fees charged for various inspections of said property.

Home Warranty Plan

Optional Warranty Package that pays for repair/replacement of home’s major systems and appliances.

Fidelity National Title Insurance Company


GLOSSARY

Acceleration Clause – A clause in a Deed of Trust or note that accelerates or hastens the time when the debt becomes

due. For example, most deeds of trust of loans contain a provision that the note shall become due immediately upon the

sale or transfer of title of the loan, or upon failure to pay an installment of principal or interest. This is also called a due on

sale clause.

Adjustable Rate Mortgage – A mortgage instrument with an interest rate that is periodically adjusted to follow a

preselected published index. The interest rate is adjusted at certain intervals during the loan period.

Agency – Any relationship in which one party (agent) acts for or represents another (principal) under the authority of the

principal. Agency involving real property should be in writing, such as listing, trust, powers of attorney, etc.

Amortization – Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments.

Appraisal – An opinion of value based on factual analysis. Legally, an estimation of value by two disinterested persons of

suitable qualifications.

APR (Annual Percentage Rate) – The yearly interest percentage of a loan, as expressed by the actual rate of interest paid.

The APR is disclosed as a requirement of federal truth in lending statutes.

Assessed Value – Value placed upon property for property tax purposes by the tax collector.

Assessment – A levy against property in addition to general taxes. Usually for improvements such as streets, sewers, etc.

Assumption of Mortgage – Agreement by a buyer to assume the liability under an existing note secured by a mortgage

or deed of trust. The lender usually must approve the new debtor in order to release the existing debtor (usually the seller)

from liability.

Balloon Note – A note calling for periodic payments which are insufficient to fully amortize the face amount of the note

prior to maturity, so that a principal sum known as a “balloon” is due at maturity.

Beneficiary – (1) One for whose benefit a trust is created. (2) In states in which deeds of trust are commonly used instead

of mortgages, the lender (mortgagee) is called the beneficiary.

Borrower – One who borrows funds, with the express or implied intention of repaying the loan in full, or giving the equivalent.

Breach of Contract – Failure to perform a contract, in whole or in part, without legal excuse.

Broker, Real Estate – One who is licensed by the state to carry on the business of dealing in real estate. A broker may

receive a commission for his/her part in bringing together a buyer and seller, landlord and tenant, or parties to an

exchange.

Buy Down – A fixed rate loan where the interest rate and payment are reduced for a specific period of time by paying the

interest up front to subsidize the lower payment.

Chain of Title – The chronological order of conveyances of a parcel of land, from the original owner to the present owner.

Clear Title – Real property against which there are no liens, especially involuntary liens (mortgages).

Closing – In real estate sales, the final procedure in which documents are executed and/or recorded, and the sale (or loan)

is completed.

Closing Costs – Expenses incidental to a sale of real estate, such as loan fees, title fees, appraisal fees, etc.

Closing Statement – The statement which lists the financial settlement between buyer and seller, and the costs each

must pay.

Cloud on Title – An invalid encumbrance on real property, which, if valid, would affect the rights of the owner. For

example: A sells lot 1, tract 1, to B. The deed is mistakenly drawn to read lot 2, tract 1. A cloud is created on lot 2 by the

recording of the erroneous deed. The cloud may be removed by quitclaim deed, or, if necessary, by court action.

Fidelity National Title Insurance Company


GLOSSARY

Community Property – Arizona is a community property state. There is a statutory presumption that all property acquired

by husband and wife is community property. Community property is a method of co-ownership for married persons only.

Upon death of one of the spouses, the deceased spouse’s interest will pass by either a will or intestate succession.

Community Property with Right of Survivorship – Community property with right of survivorship is a method of

ownership by husband and wife that vests title in the surviving spouse upon the death of one of the spouses.

Consideration – Anything which is, legally, of value, and induces one to enter into a contract.

Conventional Mortgage – A mortgage or deed of trust not obtained under a government insured program such as

FHA or VA.

Conveyance – Transfer of title to land. Includes most instruments by which an interest in real estate is created, mortgaged

or assigned.

Covenants, Conditions and Restrictions (CC&Rs) – A term used in some areas to describe the restrictive limitations

which may be placed on property.

Deed – Actually, any one of many conveyancing or financing instruments, but generally a conveyancing instrument, given

to pass fee title to property upon sale.

Deed of Trust – An instrument used in many states in place of a mortgage. Property is transferred to a trustee by the

borrower (trustor), in favor of the lender (beneficiary), and reconveyed upon payment in full.

Deposit – Money given by the buyer with an offer to purchase. Shows good faith. Also called earnest money.

Discount Points – A negotiable fee paid to the lender to secure financing for the buyer. Discount points are up front

interest charges to reduce the interest rate on the loan over the life, or a portion, of the loan’s term. One discount point

equals one percent of the loan amount.

Disposable Income – Income, usually monthly income, left over after fixed obligations and living expenses for that period

of income are paid.

Documentary Transfer Tax – A state tax on the sale of real property, based on the sale price.

Down Payment – Cash portion paid by a buyer from his/her own funds, as opposed to that portion of the purchase price

which is being borrowed.

Encumbrance – A claim, lien, charge, or liability attached to and binding real property. Any right to, or interest in, land

which may exist in one other than the owner, but which will not prevent the transfer of the fee title.

Equity – The market value of real property, less the amount of existing liens.

Execute – To complete, the finish, in real estate deeds, to sign, seal, and deliver.

Fair Credit Reporting Act – A federal law giving one the right to see his/her credit report so that errors may be corrected.

A lender refusing credit based on a credit report must inform the buyer which company issued the report. The buyer may

see the report without charge if refused credit.

Federal Home Loan Banks – A system of 11 regional banks established by the Home Loan Bank act of 1932 in order to

keep a permanent supply of money available for home financing.

Fee Simple – An estate under which the owner is entitle to unrestricted powers to dispose of the property, and which can

be left by will or inherited. Commonly, a synonym for ownership.

F.H.A. (Federal Housing Administration) – A federal agency which insures first mortgages, enabling lenders to loan a very

high percentage of the sale price.

Fidelity National Title Insurance Company


GLOSSARY

FHLMC (Freddie Mac) – Federal Home Loan Mortgage Corporation. A federal agency purchasing first mortgages, both

conventional and federal insured, from members of the Federal Reserve System and the Federal Home loan Bank System.

First Mortgage – A mortgage having priority over all other voluntary liens against certain property.

Fixed Rate Mortgage – A mortgage having a rate of interest which remains the same for the life of the mortgage.

Flood Insurance – Insurance indemnifying banks against loss by flood damage. Required by lenders (usually banks) in

areas designated (federally) as potential flood areas. The insurance is private but federally subsidized.

FNMA (Fannie Mae) – Federal National Mortgage Association. A private corporation dealing in the purchase of first

mortgages, at discounts.

GNMA (Ginnie Mae) – Government National Mortgage Association. A federal association, working with F.H.A., which offers

special assistance in obtaining mortgages, and purchases mortgages in a secondary capacity.

Good Faith – Something done with good intentions, without knowledge of fraudulent circumstances, or reason to inquire

further.

Grant Deed – One of the many types of deeds used to transfer real property. Grantee – one to whom a grant is made,

generally the buyer. Grantor - one who grants property or property rights.

Hazard Insurance – Real estate insurance protecting against loss caused by fire, some natural causes, vandalism, etc.,

depending upon the terms of the policy.

Homeowners’ Association – (1) An association of people who own homes in a given area, formed for the purpose of

improving or maintaining the quality of the area. (2) An association formed by the builder of condominiums or planned

developments, and required by statute in some states. The builder’s participation as well as the duties of the association

are controlled by statute.

Homeowners’ Insurance – Includes the coverage of Hazard Insurance plus added coverage such as personal liability,

theft away from the home (items stolen from the insured’s car), and other such coverage.

Housing Starts – Number of houses on which construction has begun. The figures are used to determine the availability

of housing, used for real estate loans, need for labor and materials, etc.

Impound Account – Account held by a lender for payment of taxes, insurance, or other periodic debts against real

property. The borrower pays a portion of, for example, the yearly taxes, with each monthly payment. The lender pays the

tax bill from the accumulated funds.

Index – An index used to adjust the interest rate of an adjustable rate mortgage loan. For example: the change in U.S.

Treasury securities (T- bills) with a 1 year maturity. The weekly average yield on said securities, adjusted to a constant

maturity of one year, which is the result of weekly sales, may be obtained weekly. This change in interest rates is the

“index” for the change in the specific adjustable rate mortgage.

Instrument – Any writing having legal form and significance, such as a deed, mortgage, will, lease, etc.

Interest Rate – The percentage of an amount of money which is paid for its use for a specified time, usually expressed as

an annual percentage.

Interest Rate Cap – The maximum interest rate increase of an adjustable rate loan. For example, a 6% loan with a 5%

interest rate cap would have a maximum interest for the life of the loan which would not exceed 11%.

Joint Tenancy – An undivided interest in property, taken by two or more joint tenants. The interests must be equal,

occurring under the same conveyance, and beginning at the same time. Upon the death of a joint tenant, the interest

passes to the surviving joint tenants, rather than to the heirs of the deceased.

Fidelity National Title Insurance Company


GLOSSARY

Joint Tenancy with Right of Survivorship – An undivided interest in property taken by two or more joint

tenants. The interest must be equal; occurring under the same conveyance,and beginning at the same time.

Upon death of a joint tenant, the interest passes to the surviving joint tenant or tenants, rather than to the heirs

of the deceased. If a married couple acquires title as joint tenants with right of survivorship, they must specifically

accept the joint tenancy to avoid the presumption of community property.

Late Charge – A charge to the borrower for failure to pay an installment payment on time.

Lease – An agreement by which an owner of real property gives the right of possession to another for a specified period

of time and for a specified consideration (rent). Title does not pass.

Legal Description – A method of geographically identifying a parcel of land, which is acceptable in a court of law. A

description of a parcel of land sufficient to identify the property such as a lot and tract number.

Lien – An encumbrance against property for money, either voluntary or involuntary. All liens are encumbrances but all

encumbrances are not liens.

Lis Pendens – A legal notice recorded to show pending litigation relating to real property, and giving notice that anyone

acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.

Loan Origination Fee – A one time set up fee charged by a lender.

Loan Package – The file of all items necessary for the lender to decide to give or not give a loan. These items would

include the information on the prospective borrower (loan application, credit report, financial statement, employment

letters, etc) and information on the property (appraisal, survey, etc).

Maintenance Reserve – Money reserved to cover anticipated maintenance costs.

Maker – One who executes (signs) as the maker (borrower) of a note.

Marketability – Saleability. The probability of selling property at a specified time, price and terms.

Marketable Title – Title which can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and

their legal meaning concerning liens and encumbrances.

Market Price – The price a property brings in a given market. Commonly used interchangeably with market value,

although not truly the same.

Material Fact – A fact upon which an agreement is based, and without which, said agreement would not be made.

Maturity – (1) Termination period of a note. For example: a 30 year mortgage has a maturity of 30 years. (2) In sales law,

the date a note becomes due.

Mechanics Lien – A lien created by statute for the purpose of securing priority of payment for the price or value of work

performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as

well as the improvements.

Moisture Barrier – Insulating materials used to prevent the build up of moisture (condensation) in walls and other parts of

a building.

Mortgagee – The party lending the money and receiving the mortgage. Some states treat the mortgagee as the “legal”

owner, entitled to rents from the property. Other states treat the mortgagee as a secured creditor, the mortgagor being the

owner. The latter is the more modern and accepted view.

Mortgage Credit Certificate (MCC) Program – A first time homebuyer program subject to purchase price and income

limits and limited to Alameda, Contra Costa, San Mateo and Santa Clara counties. The MCC program is actually a special

tax credit and assists buyers in qualifying on almost any loan program.

Fidelity National Title Insurance Company


GLOSSARY

Mortgage Insurance – Insurance written by an independent mortgage insurance company protecting the mortgage lender

against loss incurred by a mortgage default, thus enabling the lender to lend a higher percentage of the sale price. The

Federal Government writes this form of insurance through the FHA and VA.

Mortgagor – They party who borrows the money and gives the mortgage.

Multiple Listing – An exclusive listing, submitted to all members of an association, so that each may have an opportunity

to see the property.

Note – A unilateral agreement containing an express and absolute promise of the signer to pay to a named person, or

order, or bearer, a definite sum of money at a specified date or on demand. Usually provides for interest and, concerning

real property, is secured by a mortgage or trust deed.

Notice of Action – A recorded notice that real property may be subject to a lien, or even that the title is defective, due to

pending litigation. Notice of a pending suit, also called “Lis Pendens”.

Notice of Cessation – A notice stating that work has stopped on a construction project. Done to accelerate the period of

filing a mechanic’s lien.

Notice of Completion – A notice, recorded to show that a construction job is finished. The length of time in which

mechanic’s liens may be filed depends upon when and if a notice of completion is recorded.

Notice of Default – A notice filed to show that the borrower under a mortgage or deed of trust is in default (behind on the

payments).

Offer – A presentation or proposal for acceptance, in order to form a contract. To be legally binding, an offer must be

definite as to price and terms.

Offer and Acceptance – Necessary elements of a contract to sell real estate.

Origination Fee – A fee made by a lender for making a real estate loan. Usually a percentage of the amount loaned, such

as one percent.

Owner Occupied – Property physically occupied by the owner.

Ownership – Rights to the use, enjoyment, and alienation of property, to the exclusion of others. Concerning real property,

absolute rights are rare, being restricted by zoning laws, restrictions, liens, etc.

Payment Cap – A maximum amount for a payment under an Adjustable Mortgage Loan, regardless of the increase in the

interest rate. If the payment is less than the interest alone, negative amortization is created.

Payoff – The payment in full of an existing loan or other lien.

Personal Property – Any property which is not designated by law as real property.

Piggyback Loan – A loan made jointly by two or more lenders on the same property under one mortgage or trust deed.

one 90% loan, for example, may have one lender loaning 80% and another (subordinate) lender loaning the top 10% (high

risk portion).

PITI (Principal, Interest, Taxes and Insurance) – Used to indicate what is included in a monthly payment on real property.

Principal, interest, taxes (property) and insurance (hazard) are the four major portions of a usual monthly payment.

Power of Attorney – An authority by which one person (principal) enables another (attorney-in-fact) to act for him. (1)

General power - authorizes sale, mortgaging, etc., of all property of the principal. Invalid in some jurisdictions. (2) Special

power specifies property, buyers, price and terms. How specific it must be varies in each state.

Preliminary Title Report – A report showing the condition of title before a sale or loan transaction. After completion of the

transaction, a title insurance policy is issued.

Fidelity National Title Insurance Company


GLOSSARY

Prepaid Items – Those expenses of property which are paid in advance and will usually be prorated upon sale, such as

taxes, insurance, rent, etc.

Prepayment Penalty – A penalty under a note, mortgage, or deed of trust, imposed when the loan is paid before it is due.

Principal – (1) The person who gives authority to an agent or attorney. (2) Amount of debt, not including interest. The face

value of a note, mortgage, etc.

Private Mortgage Insurance – Insurance against a loss by a lender in the event of default by a borrower (mortgagor). The

insurance is similar to insurance by a government agency such as FHA, except that it is issued by a private insurance

company. The premium is paid by the borrower and is included in the mortgage payment.

Promisee – Once to whom a promise has been made, such as the lender under a promissory note.

Promisor – One who makes a promise. The borrower under a promissory note.

Promissory Note – A promise in writing, and executed by the maker, to pay a specified amount during a limited time, or

on demand, or at sight, to a named person, or on order, or to bearer.

Proration – To divide (prorate) property taxes, insurance premiums, rental income, etc., between buyer and seller

proportionately to time of use, or the date of closing.

Public Records – Usually at a county level, the records of all documents which are necessary to give notice. The records

are available to the public. All transactions for real estate should be recorded.

Purchase Agreement – An agreement between a buyer and seller of real property, setting forth the price and terms of the

sale.

Quitclaim Deed – A deed operating at a release: intended to pass any title, interest, or claim which the grantor may have

in the property, but not containing any warranty of a valid interest or title in the grantor.

Real Estate – (1) Land and anything permanently affixed to the land, such as buildings, fences, and those things attached

to the buildings, such as light fixtures, plumbing and heating fixtures, or other such items which would be personal

property if not attached. The term is generally synonymous with real property, although in some states a fine distinction

may be made. (2) May refer to rights in real property as well as the property itself.

Reconveyance – An instrument used to transfer title from a trustee to the equitable owner of real estate, when title is held

as collateral security for a debt. Most commonly used upon payment in full of a trust deed. Also called a deed of

reconveyance or release.

Recording – Filing document affecting real property as a matter of public record, giving notice to future purchasers,

creditors, or their interested parties. Recording is controlled by statute and usually requires the witnessing and notarizing

of an instrument to be recorded.

Recording Fee – The amount paid out the recorder’s office in order to make a document a matter of public record.

RESPA – Real Estate Settlement Procedures Act. A federal statute effective June 20, 1975, requiring disclosure of certain

costs in the sale of residential (one to four family) improved property which is to be financed by a federally insured lender.

Retaining Wall – A wall used to contain or hold back dirt, water, or other materials of a similar nature.

Right of Survivorship – The right of a survivor of a deceased person to the property of said deceased. A distinguishing

characteristic of a joint tenancy relationship.

Sales Contract – Another name for a sales agreement, purchase agreement, etc.

Second Mortgage – A mortgage which ranks after a first mortgage in priority. Properties may have two, three, or more

mortgages, deeds of trust, or land contracts, as liens at the same time. Legal priority would determine whether they are

called a first, second, third, etc. lien.

Fidelity National Title Insurance Company


GLOSSARY

Septic System – A sewage system, whereby waste is drained through pipes and a tile field ( a system of clay tiles and

gravel) into a septic tank. Found in areas where city or county sewers have not yet been installed.

Septic Tank – An underground tank into which a sanitary sewer drains from a building. The sewage is held until bacterial

action changes the solids into liquids or gasses, which are then released into the ground.

Signed, Sealed and Delivered – A phrase indicating that everything necessary to convey has been done by the grantor.

Modernly, signed, and delivered are still necessary, but the only seals commonly used are by governments, corporations,

and notaries.

Simple Interest – Interest computed on principal alone, as opposed to compound interest.

Special Assessment – Lien assessed against real property by a public authority to pay costs of public improvements

(sidewalks, sewers, street lights, etc.) which directly benefits the assessed property.

Specific Performance – An action to compel the performance of a contract, when money damages for breach would not

be satisfactory.

Statement of Identity – Also called an Identity Statement, a confidential form filled out by buyer and seller to help a title

company determine if any liens are recorded against either. Very helpful when people with common names are involved.

Statute – A law which comes from a legislative body. A written law, rather than law established by court cases.

Subordinate – To make subject or junior to.

Succession – The passing of real property by will or inheritance, rather than by grant of a deed or any other form of purchase.

Survey – The measurement of the boundaries of a parcel of land, its area and sometimes its topography.

Take Out Loan – The “permanent” (long term) financing of real estate after completion of construction.

Tax Base – The assessed valuation of real property, which is multiplied by the tax rate to determine the amount of

tax due.

Tax Lien – (1) A lien for nonpayment of property taxes. Attaches only to the property upon which the taxes are unpaid.

(2) A federal income tax lien. May attach to all property of the one owing taxes.

Tenancy by the Entreaty – A form of ownership by husband and wife whereby each owns the entire property. In the event

of the death of one, the survivor owns the property without probate.

Tenancy in Common – An undivided ownership in real estate by two or more persons. The interests need not be equal,

and, in the event of the death of one of the owners, no right of survivorship in the other owners exists.

Tenant – (1) A holder of property under a lease or other rental agreement. (2) Originally, one who had the right to

possession, irrespective of the title interest.

Terms – The considerations, other than price, in a sale, lease, mortgage, etc. For example: the way the money will be paid,

time to take possession, conditions, etc.

“Time Is Of The Essence” – Clause used in contracts to bind one party to performance at or by a specified time in order

to bind the other party to performance.

Title – The evidence one has of right to possession of property.

Topography – The contour of land surface, such as flat, rolling, mountainous, etc.

Transfer – The act by which the title to property is conveyed from one person to another.

Transfer Tax – State tax on the transfer of real property. Based on purchase price or money changing hands. Also called

documentary transfer tax.

Fidelity National Title Insurance Company


GLOSSARY

Trust – A fiduciary relationship under which one holds property (real or personal) for the benefit of another. The party

creating the trust is called the settlor, the party holding the property is the trustee, and the party for whose benefit the

property is held is called the beneficiary.

Trustee – (1) One who is appointed, or required by law, to execute a trust. (2) One who holds title to real property under

the terms of a deed of trust.

Trustor – The borrower under a deed of trust. One who deeds his property to a trustee as security for the repayment

of a loan.

Veterans Administrations (VA) – An agency of the Federal government which, among other things, insures and

guarantees loans for veterans.

Warrant – To legally assure that title conveyed is good and possession will be undisturbed.

Wrap-Around Mortgage – A second or junior mortgage with a face value of both the amount it secures and the balance

due under the first mortgage. The mortgage under the wrap-around collects a payment based on its face value then pays

the first mortgagee. It is most effective when the first has a lower interest rate than the second, since the mortgagee

under the wrap-around gains the difference between the interest rates, or the mortgagor under the wrap-around may

obtain a lower rate than if refinancing.

Fidelity National Title Insurance Company


NOTES

Fidelity National Title Insurance Company

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