Buyers Guide a Guide to Buying a Home in Southern Nevada

Buyers Guide A Guide to buying a home in Southern Nevada

Trusted everywhere every day. Buyer’s Guide Your Guide to Purchasing Your Dream Home

Table of Contents

How to Become a Buyer 4-7

The Escrow Process 8-10

Life of an Escrow 11

Title Insurance 12

Statement of Identity 13-14

Title Policy Comparison 15-16

The Loan Process 17

The Closing Disclosure 18-25

Mortgage Loan Checklist 26

Concurrent Co-Ownership Interests 27-28

Ways to Take Title in Nevada 29-31

Important Real Property Tax Dates 32

Tax Prorations 33

Advantages of Having Fidelity National Home Warranty on Your House 34

Guide to Closing Costs 35

What Closing Costs Are All About 36

Overview of Closing Costs 37

Moving Checklist 38-39

Glossary 40-47

3 How To Become A Buyer

Fidelity National Title®

You are about to embark on one of the most important and exciting decisions in your lifetime. The selection and purchase of your 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, fguring your down payment and monthly costs, applying for a loan and fnalizing 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 fnd a house, efciently 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? Barbecue? Work at home? Are you a chef? A wardrobe buf? Are you a fxer-upper or a total couch potato?

Your Realtor’s® expertise and experience will be crucial in helping you fnd the 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 compara- tive information available for more informed shopping.

In addition, your Realtor® will show you homes that you can comfortably aford. He/she will have the resources to help you understand how much a lender will let you borrow and on what basis it is calculated. Once you have calculated a price range, your Realtor® will work with you to establish criteria that will lead you to the right home.

When you are ready to make an ofer, 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.

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 Aford?

Though you may be willing to spend until it hurts, the name of the game is how much you can aford based on the lender’s calculations/requirements. Your Realtor® will put you in touch with lenders that he/she trusts to help you through the fnancial process of pre-qualifng (targeting the amount that a fnancial institution will lend you.)

In general, lenders allow your total monthly housing costs to go as high as but not more than 30 percent of your gross monthly income. The second requirement is that not more than 36 percent of your gross monthly income can be tied up in total monthly house payment and any payment(s) on outstanding long term debt.

4 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Lenders use slightly diferent formulas for arriving at “total monthly house payment”. These costs generally include your mortgage principal and interest payment, property taxes as a monthly fgure and hazard insurance as a monthly fgure. 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%, this PMI payment will also be included. If you decide to buy a condominium or town house, the monthly homeowner’s association fees will also be included. Keep in mind, these formulas aren’t cut and dry and things change from lender to lender, so your best bet is to do your research and make the comparisons for yourself.

2. What Type of House Do You Want?

Perhaps you know exactly what you want... 2,200 square foot ranch style home on a wooded lot. If so, your Realtor® can look immediately for only that type of house. On the other hand, if you don’t know what you want, but “you’ll know when you see it”, you need to complete the Home Shopping “Needs and Wants Checklist” at the back of this section. It will help you defne what you really “have to have” and really “want to have” in a house and neighborhood. This will help your Realtor® considerably when searching for the right homes to show you. When you look at homes, bring this workbook with you so you can keep a record of your notes on each of the homes you will be touring.

5 Fidelity National Title®

Get Your Financing In Order You can get together with a lender to get your loan application completed and the fnancing process started. Be prepared to provide the lender with copies of any important and necessary information.

Make Decisions About Your Purchases Below are some of the items you'll need to consider and how the purchase process works.

How Much Should You Ofer to Pay? Should you ofer 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 the price reasonable? Your Realtor® can show you comparable sales (comps) for similar properties in the neighborhood to help you. How competitive is the area’s home buying market? If the seller is ofering an assumable mortgage or fnancing, how much is it worth to you?

Making Decisions About Your Purchase Once you have found the perfect house, your Realtor® will take you through the purchasing process. He/she will submit your ofer to buy the house. The seller may accept your frst ofer, or you may go through one or several counter-ofers 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.

What Conditions Do You Want To Place On Buying The House? When you commit to buy the house through your ofer, you may make that commitment contingent upon certain things happening, such as you securing fnancing for the home. In a similar vein, you may 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 house is in good shape. You may make the contract subject to your being satisfed with a building inspector’s report and/or an inspection for termites. The purchase should also be subject to you being satisfed with your own inspection of the house just prior to closing.

What Special Provisions Should Be Included? Most contacts 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.

6 Buyer’s Guide Your Guide to Purchasing Your Dream Home

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 fxtures (such as chandelier in the dining room), shades, blinds, curtains and rods, screens and storm windows, shelving or cabinets, potted fowers, shrubs and trees, or perhaps a swing set that is cemented down.

What Happens To The Earnest Money? A “deposit” is made, in part, to show the seller you are serious 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. Your neutral third party, Fidelity National Title®, holds the deposit in a special trust or escrow account until the sale is closed or the contract is broken.

If you go through with the sale, the money is applied to your closing costs. If you fail to buy the house, the seller has the right to keep the earnest money. However, you can get your money back until the point at which you are notifed that the seller has accepted your ofer, or if the seller fails to fulfll his/her obligations, the money is yours.

7 The Escrow Process

Fidelity National Title®

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 holder (Fidelity National Title®). The Escrow Ofcer, in turn has the responsibility of seeing that these terms of the escrow are carried out. The escrow holder 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 Ofcer takes instructions based on the terms of your Purchase Agreement (contract) and the lender’s requirements. The Escrow Ofcer can hold inspection reports and bills for work performed as required by the Purchase Agreement. Other elements of the escrow include, hazard and title insurance, and the grant deed from the seller to you. Escrow cannot be completed until these have been satisfed and all parties have signed escrow documents.

What Does The Escrow Holder Do? The escrow holder 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 holder’s duties include: • Serve as the neutral agent and the liaison between all parties involved. • Prepare the escrow instructions. • Request a Preliminary Title Search to determine the status of the title to the property. • Comply with the lender’s requirements as specifed 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 documents imposed on the escrow • Request the deed and any other documents. • Close the escrow pursuant to instructions supplied by the seller, buyer and lenders, if any. • Disburse funds as authorized by the instructions, including charges for title insurance, recording fees, real estate commissions and loan payofs. • Prepare fnal 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 ofer has been accepted, your Realtor® will open escrow with Fidelity National Title®. As soon as you execute the Purchase Agreement, 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 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®.

8 Buyer’s Guide Your Guide to Purchasing Your Dream Home

What Information Will I Have To Provide? You may be asked to complete a Statement of Identity as part of the paperwork. Because many people have the same name, the Statement of Identity is used to identify the specifc person involved in the transaction through such information as date of birth, social security number, etc. This information is strictly confdential.

How Long Is An Escrow? The length of an escrow is determined by the terms of the Purchase Agreement and can range from a few days to several months. The average length of an escrow is usually 45 days.

When Do I Sign Escrow Instructions And Where? A few days before closing, your Fidelity National Title® Escrow Ofcer or your Realtor® will contact you to make the appointment for you to sign your escrow instructions and fnal papers. At this time, your Escrow will also tell you the amount of money you will need to bring in.

9 Fidelity National Title®

Your Appointment Now that you have made your appointment to sign your documents, the following is a list of the items you will need to prepare and bring with you.

• Identifcation All parties must present one of the following forms of identifcation at your signing appointment in order for your signatures to be notarized: A state issued driver’s license or ID card, or a passport.

• Wire Nevada is a Good Funds Law State; therefore, Closing Funds should be in the form of a wire transfer. Any other form of deposit may delay the closing. Please contact the Escrow Ofcer to obtain and verify the correct wire instructions for Fidelity National Title®.

• Lender’s Requirements Check with your lender to make sure that you have satisfed all their requirements before scheduling your appointment.

• Fire and Hazard Insurance You must have fre and hazard insurance in place before your lender will wire the money to Fidelity National Title®.

• Title To Your Home Please refer to the “Common Co-Ownership Interests” in the next pages of this guide for general information with regard to how you will want to take title to your property. It is recommended that you consult with your attorney.

• After Your Appointment After all parties have signed all the necessary documents, your Escrow Ofcer will return the loan documents to your lender for fnal review. Once the review is completed, the lender will contact your Escrow Ofcer so that the fnal paperwork and requirements can be completed.

• Escrow Closing The Escrow closing is the legal transfer of the title to the property from the seller to the buyer. Once all the conditions of the escrow have been satisfed, your Escrow Ofcer will inform you of the closing date and will take care of all the fnal details. The deed and the deed of trust are recorded and the funds are disbursed within one business day. This completes the transaction and signifes the close of escrow.

10 Buyer’s Guide The Life of an Escrow Your Guide to Purchasing Your Dream Home

Escrow BUYER SELLER SELECTS A REALTOR SELECTS A REALTOR Flow Chart BUYER SELLER PRE-APPROVED BY LENDER PREPARES HOUSE FOR IF NEW LOAN NEEDED SHOWING AND SELLING

BUYER SELLER BUYER SELECTS HOME AND REVIEWS AND ACCEPTS VIEWS HOMES WITH REALTOR SUBMITS CONTRACT CONTRACT FROM BUYER

INSPECTION REPORTS SENT TO VARIOUS INSPECTIONS ESCROW OPENED AT APPLICABLE PARTIES AND ORDERED Fidelity National Title® AND REVIEWED. NOTIFICATION SENT TITLE COMMITMENT ORDERED

TITLE COMMITMENT RECEIVED APPRAISAL ORDERED BY BUYER ADVISES Fidelity National Title® AND APPROVED BY BUYER AND COMPLETED FOR LENDER OF HOME INSURANCE COMPANY

CLOSING DOCUMENTS LOAN DOCUMENTS PREPARED BUYER COMPILED BY BY LENDER AND SENT RECEIVES FINAL LOAN Fidelity National Title® TO ESCROW APPROVAL FROM LENDER

SEPARATE APPOINTMENTS SET: BUYER LOAN DOCUMENTS BUYER AND SELLER SIGN DEPOSITS REQUIRED FUNDS RETURNED TO DOCUMENTS LENDER FOR REVIEW

Fidelity National Title® DOCUMENTS RECORDED LENDER “FUNDS LOAN” ENSURES ALL CONTRACT AND ESCROW CLOSED (SENDS FUNDS TO ESCROW) CONDITIONS MET

AFTER RECORDING CONFIRMED, BUYER FINAL DOCUMENTS SENT Fidelity National Title® RECEIVES KEYS TO INTERESTED PARTIES DISBURSES FUNDS FROM REALTOR

11 Title Insurance

Fidelity National Title®

What is Title Insurance? Title insurance is a contract of indemnity which guarantees that the title to the property is as reported. If it’s not as reported, we will reimburse the buyers for actual loss or damage under the condition specifed in the policy. The title policy covers the insured for their loss to up the amount of the policy.

Title insurance assures owners that they are acquiring marketable 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 title 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 afect 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 afect the close of escrow: ownership of the subject property, how the current owners hold title, matters of record that specifcally afect 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 ofer to insure under certain situations, the title policy is a contract that gives coverage against such problems.

The California Land Title Association (CLTA) is the standard policy of title insurance in Nevada.

What Does CLTA 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. • Falsifcation 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 on the title.

12 Buyer’s Guide Statement of Identity Your Guide to Purchasing Your Dream Home

What’s in a name? When a title company seeks to uncover matters afecting title to real property, the answer is, “Quite a bit.” Statements of Information provide title companies with the information they need to distinguish the buyers and sellers of real property from others with similar names. After identifying the true buyers and sellers, title companies may disregard the judgments, liens or other matters on the public records under similar names. To help you better understand this sensitive subject, the California Land Title Association has answered some of the questions most commonly asked about Statements of Information.

What is a Statement of Information? A Statement of Information is a form routinely requested from the buyer, seller and borrower in a transaction where title insurance is sought. The completed form provides the title company with information needed to adequately examine documents so as to disregard matters which do not afect the property to be insured, matters which actually apply to some other person.

What does a Statement of Information do? Everyday documents afecting real property liens, court decrees, bankruptcies, etc. are recorded. Whenever a title company uncovers a recorded document in which the name is the same or similar to that of the buyer, seller of borrower in a title transaction, the title company must ask, “Does this document afect the parties we are insuring?” Because, if it does, it afects title to the property and would, therefore be listed as an exception from coverage under the title policy. A properly completed Statement of Information will allow the title company to diferentiate between parties with the same or similar names when searching documents recorded by name. This protects all parties involved and allows the title company to competently carry out its duties without unnecessary delay.

What types of information are requested in a Statement of Information? The information requested is personal in nature, but not unnecessarily so. The information requested is essential to avoid delays in closing the transaction. You will be asked to provide full name, social security number, year of birth, birthplace, and information on citizenship. If you are married, you will be asked the date and place of your marriage. Residence and employment information will be requested, as will information regarding previous marriages if you are divorced.

Will the information I supply be kept confdential? The information you supply is completely confdential and only for the title company to use in completing the search of records necessary before a policy of title insurance can be issued.

What happens if a buyer, seller, or borrower fails to provide the requested State- ment of Information? At best, failure to provide the requested Statement of Information will hinder the search and examination capabilities of the title company, causing the delay in the production of your title policy.

At worst, failure to provide the information requested could prohibit the close of your escrow. With- out a Statement of Information, it would be necessary for the title company to list as exceptions from

13 Fidelity National Title®

coverage judgments, liens or other matters which may afect the property to be insured. Such exceptions would be unacceptable to most lenders, whose interest must also be insured.

In Conclusion Title companies make every attempt in issuing a policy of title insurance to identify known risks afecting your property and to efciently and correctly transfer title so as to protect your interests as a homebuyer. By properly completing a Statement of Information, you allow the title company to provide the service you need with the assurance of confdentiality.

Originally published by the California Land Title Association.

14 Buyer’s Guide Title Policy Comparison Your Guide to Purchasing Your Dream Home

COVERAGE CLTA ALTA Owner’s Home- owner’s 1 Someone else owns an interest in Your Title. Yes * Yes 2 Someone else has rights affecting Your Title because of leases, contracts, or options. Yes * Yes 3 Someone claims to have rights affecting Your Title because of forgery or impersonation. Yes Yes 4 Someone else has an Easement on the Land. Yes * Yes 5 Someone else has a right to limit Your use of the Land. Yes * Yes 6 Your title is defective. Yes * Yes a. Someone else’s failure to have authorized a transfer or conveyance of your Title. Yes b. Someone else’s failure to create a valid document by electronic means. Yes c. A document upon which Your Title is based is invalid because it was not properly signed, Yes sealed, acknowledged, delivered or recorded. d. A document upon which Your Title is based was signed using a falsified, expired, or otherwise Yes invalid power of attorney. e. A document upon which Your Title is based was not properly filed, recorded, or indexed in the Yes Public Records. f. A defective judicial or administrative proceeding. Yes 7 Any of Covered Risks 1 through 6 occurring after the Policy Date. Yes 8 Someone else has a lien on Your Title Yes * Yes a. Lien of real estate taxes or assessments imposed on Your Title by a governmental authority Yes * Yes that are due or payable, but unpaid; b. Mortgage; Yes * Yes c. Judgments, state or federal tax lien; Yes * Yes d. Charge by homeowner’s or condominium association; or Yes e. Lien, occurring before or after the Policy Date, for labor and material furnished before the Yes Policy Date. 9 Someone else has an encumbrance on Your Title. Yes * Yes 10 Someone else claims to have rights affecting Your Title because of fraud, duress, incompetency, or ** Yes incapacity. 11 You do not have actual vehicular and pedestrian access to and from the Land, based upon a legal right. ** Yes 12 You are forced to correct or remove an existing violation of any covenant, condition or restriction Yes affecting the Land, even if the condition or restriction is excepted in Schedule B. *** 13 Your Title is lost or taken because of a violation of any covenant, condition or restriction, which occurred Yes before You acquired Your Title, even if the covenant, condition or restriction is excepted in Schedule B. 14 The violation or enforcement of those portions of any law or government regulation, if there is a notice Yes **** recorded in the Public Records describing any part of the Land, claiming a violation exists or declaring the intention to enforce the law or regulation, concerning: a. Building; Yes b. Zoning; Yes c. Land use; Yes d. Improvements on the Land; Yes e. Land division; or Yes f. Environmental protection. Yes 15 An enforcement action based on the exercise of a governmental police power not covered by Covered Yes Risk 14, if there is a notice recorded in the Public Records, describing any part of the Land. **** 16 Because of an existing violation of a subdivision law or regulation affecting the Land: Yes **** a. You are unable to obtain a building permit; Yes b. You are required to correct or remove the violation; or Yes c. Someone else has a legal right to, and does, refuse to perform a contract to purchase the Yes Land, lease it or make a Mortgage loan on it. The CLTA and ALTA standard coverage policies only provide coverage in these risk areas against recorded documents, and not for all risks. An extended coverage ALTA policy may be purchased, upon meeting various requirements, that includes these coverages in full.

**The CLTA and ALTA standard coverage Policies only provide coverage here in certain limited circumstances, and not as broadly covered as the Homeowner’s Policy.

***This coverage does not extend to any violation that relates to (a) any obligation to perform maintenance or repair on the Land; or (b) environmental protection of any kind, including hazardous or toxic conditions or substances, unless there is a notice recorded in the Public Records, describing any part of the Land, claiming a violation exists. Our liability for this coverage is limited to the extent of the violation stated in that notice.

**** Our liability for this coverage is limited as stated in the Policy, which may be less than Your actual loss or the Policy Amount.

Because of the nature of and location of certain properties, an owner’s afdavit and inspection of the property may be necessary to determine if additional exceptions from coverage need to be shown in Schedule B of the Policy, which will be noted in the preliminary report. The foregoing chart is intended to highlight only some important aspects of coverage and is not to be construed as expanding or limiting the coverage as set forth in the before mentioned policies. Copies of these policies are available upon request. Decisions on coverage should be made only after a complete review of all of the language of the policies themselves.

CLTA Standard Coverage (1990) • ALTA Owner’s Policy (standard coverage, rev. 06-17-06) • ALTA Homeowner’s Policy (rev. 12-02-13) 15 Fidelity National Title®

COVERAGE CLTA ALTA Owner’s Home- owner’s 17 You lose Your Title to any part of the Land because of the right to take the Land by condemning it, if: Yes a. There is a notice of the exercise of the right recorded in the Public Records and the notice Yes describes any part of the Land; or b. The taking happened before the Policy Date and is binding on You if You bought the Land Yes without knowing of the taking. 18 You are forced to remove or remedy Your existing structures, or any part of them – other than boundary Yes walls or fences – because any portion was built without obtaining a building permit from the proper **** government office. 19 You are forced to remove or remedy Your existing structures, or any part of them, because they violate Yes an existing zoning law or zoning regulation. **** 20 You cannot use the Land because use as a single-family residence violates an existing zoning law or Yes zoning regulation. 21 You are forced to remove Your existing structures because they encroach onto Your neighbor’s land. Yes **** 22 Someone else has the legal right to, and does, refuse to perform a contract to purchase the Land, lease Yes it or make a Mortgage loan on it, because of Your neighbor’s existing structures encroach onto the Land. 23 You are forced to remove Your existing structures, which encroach onto an Easement or over a building Yes set-back line, even if the Easement or building set-back line is excepted in Schedule B. 24 Your existing structures are damaged because of the exercise of a right to maintain or use any Yes Easement affecting the Land, even if the Easement is excepted in Schedule B. 25 Your existing improvements (or a replacement or modification made to them after the Policy Date), Yes including lawns, shrubbery or trees, are damaged because of the future exercise of a right to use the surface of the Land for the extraction or development of minerals, water or any other substance, even if those rights are excepted or reserved from the description of the Land or excepted in Schedule B. 26 Someone else tries to enforce a discriminatory covenant, condition or restriction that they claim affects Yes ** Yes Your Title which is based upon race, color, religion, sex, handicap, familial status, or national origin. 27 A taxing authority assesses supplemental real estate taxes not previously assessed against the Land for Yes ** Yes any period before the Policy Date because of construction or a change of ownership or use that occurred before the Policy Date. 28 Your neighbor builds any structures after the Policy Date -- other than boundary walls or fences -- which Yes encroach onto the Land. 29 Your Title is unmarketable, which allows someone else to refuse to perform a contract to purchase the Yes Yes Land, lease it or make a Mortgage loan on it. 30 Someone else owns an interest in Your Title because a court order invalidates a prior transfer of the title Yes ** Yes under federal bankruptcy, state insolvency, or similar creditors' rights laws. 31 The residence with the address shown in Schedule A is not located on the Land at the Policy Date. Yes

32 The map, if any, attached to this Policy does not show the correct location of the Land according to the Yes Public Records. Your coverage continues in full force and effect after You convey title to into your Living Trust. Yes Your coverage continues in full force and effect after You die and title transfers to the beneficiaries of Yes your Living Trust. Your coverage continues in full force and effect after You die and title transfers through Probate to Your Yes heirs. Your coverage continues in full force and effect after you convey title without payment to your wholly owned corporation, partnership, or LLC. Additional coverage may be purchased and added to the Policy by endorsement. Yes

The CLTA and ALTA standard coverage policies only provide coverage in these risk areas against recorded documents, and not for all risks. An extended coverage ALTA policy may be purchased, upon meeting various requirements, that includes these coverages in full.

**The CLTA and ALTA standard coverage Policies only provide coverage here in certain limited circumstances, and not as broadly covered as the Homeowner’s Policy.

**** Our liability for this coverage is limited as stated in the Policy, which may be less than Your actual loss or the Policy Amount.

16 CLTA Standard Coverage (1990) • ALTA Owner’s Policy (standard coverage, rev. 06-17-06) • ALTA Homeowner’s Policy (rev. 12-02-13) Buyer’s Guide The Loan Process Your Guide to Purchasing Your Dream Home

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.

Step 2. Requesting Documentation Within 24 hours of application, the lender requests a credit report, an appraisal on the property, verifcations of employment, mortgage or landlord ratings, a preliminary title report, picture ID, W2s (2 yrs.) Certifcate of Eligibility and DD214 (VA only), and any other necessary supporting documentation.

Step 3. Loan Submission Once all the necessary documentation is in, your loan processor will put the loan package together and submit it to the underwriter for approval.

Step 4. Loan Approval Loan approval generally takes anywhere from 24 to 72 hours. All parties are notifed 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®. Your Escrow Ofcer will either call you directly or have your Realtor® make the appointment with you to come in and sign all the documents. At this time, you will be informed as to how much money, if any, you will need to bring in to close the escrow.

Step 6. Funding Once you, the buyers have signed the loan documents, they will be returned to the lender, who then reviews the package. If all the forms have been properly executed, the funds will be transferred by wire.

Step 7. Recordation When Fidelity National Title® receives the funds from your lender, your Escrow Ofcer will authorize recordation of your signed documents with the County Recorder. He/she will then prepare a fnal settlement statement, disburse the proceeds to the seller, pay of the existing encumbrances and other obligations.

Step 8. You are on record! Congratulations, you have your dream home!

17 The Closing Disclosure

Fidelity National Title®

What is a Closing Disclosure?

A Closing Disclosure is a fve-page form that provides fnal details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments and how much you will pay in fees and other costs to get your mortgage (closing costs).

The lender is required to give you the Closing Disclosure at least three business days before you close on the mortgage loan. This three-day window allows you time to compare you fnal terms and costs to those estimated in the Loan Estimate that you previously received from the lender. The three days also give you time to ask your lender any questions before you go to the closing table.

18 Buyer’s Guide Your Guide to Purchasing Your Dream Home

This form is a statement of nal loan terms and closing costs. Compare this Closing Disclosure document with your Loan Estimate.

Closing Information Transaction Information Loan Information Date Issued Borrower Loan Term Closing Date Purpose Disbursement Date Product Settlement Agent Seller File # Loan Type Conventional FHA Property VA ______Lender Loan ID # Sale Price MIC #

Loan Terms Can this amount increase after closing?

Loan Amount

Interest Rate

Monthly Principal & Interest See Projected Payments below for your Estimated Total Monthly Payment

Does the loan have these features? Prepayment Penalty

Balloon Payment

Projected Payments Payment Calculation

Principal & Interest

Mortgage Insurance Estimated Escrow Amount can increase over time

Estimated Total Monthly Payment

This estimate includes In escrow? Estimated Taxes, Insurance Property Taxes & Assessments Homeowner’s Insurance Amount can increase over time Other: See page 4 for details See Escrow Account on page 4 for details. You must pay for other property costs separately.

Costs at Closing

Closing Costs Includes $5,877.00 in Loan Costs + $7,642.43 in Other Costs – $0 in Lender Credits. See page 2 for details.

Cash to Close Includes Closing Costs. See Calculating Cash to Close on page 3 for details.

CLOSING DISCLOSURE PAGE 1 OF 5 • LOAN ID # 0000000000

19 Fidelity National Title®

Closing Cost Details Borrower-Paid Seller-Paid Paid by Others Loan Costs At Closing Before Closing At Closing Before Closing A. Origination Charges 01 % of Loan Amount (Points) 02 03 04 05 06 07 08 B. Services Borrower Did Not Shop For 01 02 03 04 05 06 07 08 09 1 0 C. Services Borrower Did Shop For 01 02 03 04 05 06 07 08 D. TOTAL LOAN COSTS Borrower-Paid Loan Costs Subtotals (A + B + C)

Other Costs E. Taxes and Other Government Fees 01 Recording Fees Deed: Mortgage: 02 F. Prepaids 01 Homeowner’s Insurance Premium ( mo.) 02 Mortgage Insurance Premium ( mo.) 03 Prepaid Interest ( per day from to ) 04 Property Taxes ( mo.) 05 G. Initial Escrow Payment at Closing 01 Homeowner’s Insurance per month for mo. 02 Mortgage Insurance per month for mo. 03 Property Taxes per month for mo. 04 05 06 07 08 Aggregate Adjustment H. Other 01 02 03 04 05 06 07 08 I. TOTAL OTHER COSTS Borrower-Paid Other Costs Subtotals (E + F + G + H)

J. TOTAL CLOSING COSTS Borrower-Paid Closing Costs Subtotals D + I Lender Credits

CLOSING DISCLOSURE PAGE 2 OF 5 • LOAN ID # 0000000000

20 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Calculating Cash to Close Use this table to see what has changed from your Loan Estimate. Loan Estimate Final Did this change? Total Closing Costs (J) Closing Costs Paid Before Closing Closing Costs Financed (Paid from your Loan Amount) Down Payment/Funds from Borrower Deposit Funds for Borrower Seller Credits Adjustments and Other Credits Cash to Close

Summaries of Transactions Use this table to see a summary of your transaction. BORROWER’S TRANSACTION SELLER’S TRANSACTION K. Due from Borrower at Closing M. Due to Seller at Closing 01 Sale Price of Property 01 Sale Price of Property 02 Sale Price of Any Personal Property Included in Sale 02 Sale Price of Any Personal Property Included in Sale 03 Closing Costs Paid at Closing (J) 03 04 04 Adjustments 05 05 06 06 07 07 08 Adjustments for Items Paid by Seller in Advance Adjustments for Items Paid by Seller in Advance 08 City/Town Taxes to 09 City/Town Taxes to 09 County Taxes to 1 0 County Taxes to 1 0 Assessments to 1 1 Assessments to 1 1 1 2 1 2 1 3 1 3 1 4 1 4 1 5 1 5 1 6 L. Paid Already by or on Behalf of Borrower at Closing N. Due from Seller at Closing 01 Deposit 01 Excess Deposit 02 Loan Amount 02 Closing Costs Paid at Closing (J) 03 Existing Loan(s) Assumed or Taken Subject to 03 Existing Loan(s) Assumed or Taken Subject to 04 04 Payo of First Mortgage Loan 05 Seller Credit 05 Payo of Second Mortgage Loan Other Credits 06 06 07 07 08 Seller Credit Adjustments 09 08 1 0 09 1 1 1 0 1 2 1 1 1 3 Adjustments for Items Unpaid by Seller Adjustments for Items Unpaid by Seller 1 2 City/Town Taxes to 1 4 City/Town Taxes to 1 3 County Taxes to 1 5 County Taxes to 1 4 Assessments to 1 6 Assessments to 1 5 1 7 1 6 1 8 1 7 1 9 CALCULATION CALCULATION Total Due from Borrower at Closing (K) Total Due to Seller at Closing (M) Total Paid Already by or on Behalf of Borrower at Closing (L) Total Due from Seller at Closing (N) Cash to Close From To Borrower Cash From To Seller

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21 Fidelity National Title®

Additional Information About This Loan

Loan Disclosures

Assumption Escrow Account If you sell or transfer this property to another person, your lender For now, your loan will allow, under certain conditions, this person to assume this will have an escrow account (also called an “impound” or “trust” loan on the original terms. account) to pay the property costs listed below. Without an escrow will not allow assumption of this loan on the original terms. account, you would pay them directly, possibly in one or two large payments a year. Your lender may be liable for penalties and interest Demand Feature for failing to make a payment. Your loan has a demand feature, which permits your lender to require early Escrow repayment of the loan. You should review your note for details. Escrowed Estimated total amount over year 1 for does not have a demand feature. Property Costs your escrowed property costs: over Year 1 Late Payment If your payment is more than ___ days late, your lender will charge a Non-Escrowed Estimated total amount over year 1 for late fee of ______Property Costs your non-escrowed property costs: over Year 1 Negative Amortization (Increase in Loan Amount) You may have other property costs. Under your loan terms, you are scheduled to make monthly payments that do not pay all of Initial Escrow A cushion for the escrow account you Payment pay at closing. See Section G on page 2. the interest due that month. As a result, your loan amount will increase (negatively amortize), and your loan amount will likely become larger than your original loan amount. Increases in your Monthly Escrow The amount included in your total loan amount lower the equity you have in this property. Payment monthly payment. may have monthly payments that do not pay all of the interest due that month. If you do, your loan amount will increase will not have an escrow account because you declined it your (negatively amortize), and, as a result, your loan amount may lender does not o er one. You must directly pay your property become larger than your original loan amount. Increases in your costs, such as taxes and homeowner’s insurance. Contact your loan amount lower the equity you have in this property. lender to ask if your loan can have an escrow account. do not have a negative amortization feature. No Escrow Partial Payments Estimated Estimated total amount over year 1. You Your lender Property Costs must pay these costs directly, possibly over Year 1 in one or two large payments a year. may accept payments that are less than the full amount due (partial payments) and apply them to your loan. Escrow Waiver Fee may hold them in a separate account until you pay the rest of the In the future, payment, and then apply the full payment to your loan. Your property costs may change and, as a result, your escrow pay- does not accept any partial payments. ment may change. You may be able to cancel your escrow account, If this loan is sold, your new lender may have a di erent policy. but if you do, you must pay your property costs directly. If you fail to pay your property taxes, your state or local government may (1) Security Interest impose nes and penalties or (2) place a tax lien on this property. If You are granting a security interest in you fail to pay any of your property costs, your lender may (1) add the amounts to your loan balance, (2) add an escrow account to your loan, or (3) require you to pay for property insurance that the lender buys on your behalf, which likely would cost more and provide fewer You may lose this property if you do not make your payments or bene ts than what you could buy on your own. satisfy other obligations for this loan.

Adjustable Payment (AP) Table Adjustable Interest Rate (AIR) Table Interest Only Payments? Index + Margin Initial Interest Rate Optional Payments? Minimum/Maximum Interest Rate Step Payments? Change Frequency Seasonal Payments? First Change Monthly Principal and Interest Payments Subsequent Changes First Change/Amount Limits on Interest Rate Changes Subsequent Changes First Change Maximum Payment Subsequent Changes

CLOSING DISCLOSURE PAGE 4 OF 5 • LOAN ID # 0000000000

22 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Loan Calculations Other Disclosures

Total of Payments. Total you will have paid after Appraisal you make all payments of principal, interest, If the property was appraised for your loan, your lender is required to mortgage insurance, and loan costs, as scheduled. give you a copy at no additional cost at least 3 days before closing. If you have not yet received it, please contact your lender at the information listed below. Finance Charge. The dollar amount the loan will cost you. Contract Details See your note and security instrument for information about Amount Financed. The loan amount available after • what happens if you fail to make your payments, paying your upfront nance charge. • what is a default on the loan, • situations in which your lender can require early repayment of the Annual Percentage Rate (APR). Your costs over loan, and the loan term expressed as a rate. This is not your • the rules for making payments before they are due. interest rate. Liability after Foreclosure Total Interest Percentage (TIP). The total amount If your lender forecloses on this property and the foreclosure does not of interest that you will pay over the loan term as a cover the amount of unpaid balance on this loan, percentage of your loan amount. state law may protect you from liability for the unpaid balance. If you re nance or take on any additional debt on this property, you may lose this protection and have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information. state law does not protect you from liability for the unpaid balance.

Questions? If you have questions about the Re nance loan terms or costs on this form, use the contact Re nancing this loan will depend on your future nancial situation, information below. To get more information the property value, and market conditions. You may not be able to or make a complaint, contact the Consumer re nance this loan. Financial Protection Bureau at www.consumer nance.gov/mortgage-closing Tax Deductions ?? If you borrow more than this property is worth, the interest on the loan amount above this property’s fair market value is not deductible from your federal income taxes. You should consult a tax advisor for ? more information. Contact Information Lender Mortgage Broker Real Estate Broker (B) Real Estate Broker (S) Settlement Agent Name Ficus Bank FRIENDLY MORTGAGE RELIABLE REALTY CO. REALTY PROS ABC Settlement BROKER INC. Address 4321 Raven Blvd. 1234 Terrapin Dr. 1776 Chesapeake St. 3456 Oriole Ave. 5432 Free State Blvd. Somecity, MD 54321 Somecity, MD 54321 Ste 405 Anytown, MD 12345 Ste 405 Anytown, MD 12345 Somecity, MD 54321 NMLS ID 111111 222222 License ID Contact Joe Smith JIM TAYLOR KELLY GREEN STEVE WALSH NANCY WILSON Contact NMLS ID 487493 3947 8 4 Contact License ID Email JSMITH JTAYLOR KGREEN SWALSH NWILSON FICUSBANK.COM FRNDLYMTGBRKR.CO RREALTY.COM REALTYPROS.COM ABCSETTLEMENT.COM Phone 111-222-3333 333 444 5555 444-555-6666 555-666-7777 666-777-8888

Con rm Receipt By signing, you are only con rming that you have received this form. You do not have to accept this loan because you have signed or received this form.

Applicant Signature Date Co-Applicant Signature Date

CLOSING DISCLOSURE PAGE 5 OF 5 • LOAN ID # 0000000000

23 Fidelity National Title®

Changes to the Closing Disclosure Timing

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

1 2 3 4 5 6 7

Three-day delivery period Three-day waiting period Non-hand Delivery of Closing Disclosure Delivery of Closing (i.e. mail) Disclosure Occurs

8 9 10 11 12 13 14

waiting cont. First day Three-day right of rescission First day signing / closing disbursement Sunday not may occur may occur counted on most

First day disbursements may occur for purchase and some

NOTE: • If a federal holiday falls within the delivery and/or waiting periods, add an additional business day.

• The three-day period is measured by days, not hours. Thus, disclosure must be delivered three days before closing, and not 72 hours prior to closing.

• Disclosures may also be delivered electronically to start the delivery period and may be signed in compliance with E-Sign requirements.

24 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Closing Disclosure Timing References by Day

Signing Monday Tuesday Wednesday Thursday Friday Saturday

Waiting Preceding Preceding Preceding Preceding Preceding Preceding Period Thursday Friday Saturday Monday Tuesday Wednesday

Delivery Preceding Preceding Preceding Preceding Preceding Preceding Period Monday Tuesday Wednesday Thursday Friday Saturday

For further Reference and active Calendar Timing Tool, visit:

Fidelity National Title website: http://fntg.com/CFPB/index.htm#Timing

CFPB website: https://www.consumerfnance.gov/policy-compliance/guidance/implementation-guidance/tila-respa-disclosure-rule/

25 Mortgage Loan Checklist

Fidelity National Title®

In order to expedite the mortgage loan process, please be sure you bring everything applicable on this list to make your appointment and the loan process as smooth as possible.

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

• Copy of Sales Contract and certifed 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 proft 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 statement for all loans or credit card balances.

• Accounts • Copies of most recent three month’s bank statements for all accounts, stock brokerages, mutual fund, 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 for each property • Amount of monthly rental income, if any (copy of any 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. • Certifcate of eligibility & DD214 (for VA only). • Copy of driver’s license and Social Security Card (for FHA only).

26 Buyer’s Guide Concurrent Co-Ownership Interests Your Guide to Purchasing Your Dream Home

Parties Division Title Possession Conveyance of Interest

Only married persons Ownership & manage-- Title is in the commu- Both co-owners have Require written consent ment of property is nity & each interest is equal management of other spouse or Community equal separate but manage- and control actual conveyance by Property deed. Separate interest is devisable by will.

Community Only married persons Ownership & manage- Title is in the commu- Both co-owners have Require both spouses Property w/ should sign the acquisi- ment of property is nity subject to special equal management to join for valid convey- right of tion deed to accept this equal survivorship right and control ance except for security survivorship special form of vesting for attorney fees title

Any number of per- Interests are equal and Ownership is joint. Sale Equal right of Conveyance by one Joint sons. Can be married undivided. Yet each by one severs tenancy possession owner severs the joint Tenancy persons alone or with person controls his/her as to others. tenancy-but only as to others-no corporations- own interest. that owner’s interest no partnerships

Any number of persons Ownership can be Each co-owner has Equal right of Each co-owner’s inter- Tenancy and/or corporations divided into any number a separate legal title possession est may be conveyed in and partnerships of interests-equal or to his/her undivided separately by its owner common unequal interest

Any number of persons Each partner’s share Ownership is by part- Possession by partner- Conveyance MUST and/or corporations & is personal property in nership entity only ship by managing be by designated Partner - partnerships MUST be partnership entity partner(s) general partners. All ships at least two limited partners need to consent if sale is 100% of assets

Any individual, group, Ownership is a per- Title is held by trustee Depends on provision Designated parties in the partnership of corpora- sonal property interest or trustees pursuant to in trust agreement trust instrument authorize Trust the trustee to convey prop- Arrange - tions. Other special & can be divided into the trust agreement requirements. any number of interests ments interest may be sold separately (as personal property) unless restricted.

Only married persons Property retains its Title is held by trustee Depends on provision By the trustee pursuant Community character of or trustees pursuant to in trust agreement to the powers contained Property community property the trust agreement in the trust instrument Trusts

Disclaimer: The comparisons shown above are provided for informational purposes only. This chart should NOT be used to determine how you acquire your ownership in the property. It is strongly recommended that you seek professional advice from an attorney and/or your tax advisor to determine the legal and tax consequences of how your title should be vested.

27 Fidelity National Title®

Purchaser’s Efect of Successors’ Creditor’s Presumptions Status Death Status Rights

Purchaser can only acquire On the death of the first - If the first spouses’s interest Property of the community Strong presumption that 100% of title of commu- spouse, half interest is devised by will or passes is liable for debts of either any property acquired by Community nity. Both spouses must belongs to the surviving by succession, remaining spouse made before or either married persons Property consent or convey. Cannot spouse. Other half interest spouse and devises or during marriage. Entire during marriage is be a co-owner with his/her is devisable by will, or heirs hold title as tenants in property may be sold at community property spouse. passes by succession common execution sale to satisfy under probate statutes. debt of either spouse

Community Purchaser can only acquire On the death of the first Due to surviving right, the Property of the community Property is specifically 100% of the title. Both spouse, the individual surviving spouse owns is liable for debts of either stated in the deed to be Property w/ spouses must convey. half interest passes to the 100% of the title spouse made before or community property with right of Cannot be a co-owner with surviving spouse, just the during marriage. Entire right of survivorship survivorship his/her spouse. same as joint tenancy. No property may be sold at separate interest is devis- execution sale to satisfy able by will. debt of either spouse.

Purchaser will become Upon each owner’s death, Unless joint tenancy is Each owner is subjected Must be expressly stated a tenant in common with his/her interest passes to broken, last surviving joint to execution sale to satisfy that property acquired as Joint the other co-owners in the remaining survivors tenant owns entire property debt. Joint tenancy is bro- joint tenancy Tenancy the property as to the by operation of law. Such interest, which is now de- ken. Buyer at sale (usually purchaser’s interest. Other interests are not devisable visable by will Creditor) becomes tenant owners may remain joint by will. in common with other tenants. owners.

Purchaser will become Each owner’s interest is Heirs or devisee become Each owner’s interest is When conveyance Tenancy a tenant in common with devisable by will or passes tenants in common with subject to execution sale. is unclear, tenancy in in the other co-owners in the by succession under other owners Buyer at sale (usually common is presumed, property probate statutes. No right of Creditor) becomes tenant unless community property common survivorship in common with other presumptions apply owners

Purchaser acquires interest Partner’s share in partner- Heirs or devisee have Partnership real property Should be clear from that partnership owned ship is devisable by will or rights in partnership interest only subject to execution conveyance that grantees Partner - succession under probate but not in specific property sale by partnership creditor. have status. If not, could statutes. May cause a If debt of individual partner, be found to be tenants in ships dissolution of partnership only that Partner’s share common dependent on terms of (personal property) is partnership agreement. subject to execution sale.

Purchaser acquires inter- Depends on terms of trust Depends on terms of trust Credit needs to obtain Trust arrangement is est held by the trustee. instrument. Death of trustee instrument. Trust may a final court order for any ONLY created by written Trust Beneficiary’s interest may may terminate or convert terminate or other trust execution sale of the bene- instrument. Conveyance Arrange - be conveyed separately (as trust to other arrangements. arrangements may be ficial interest of an order to MUST be to trustee of the Successor beneficiaires have specific trust property personal property) unless created. trust. The trust itself is NOT ments may be named in the trust to be sold to satisfy the debt. restricted. instrument. a legal entity capable of holding title.

Purchaser acquires the Trust instrument may provide Distribution depends Creditor needs to obtain Property is still presumed Community interest held by the trustee for distribution on death of on the terms of the trust final court order for execu-- to be community property. Property first spouse’s half interest. instrument tion sale to satisfy debts of Status may change upon May be devisable by will. either or both spouses death, dissolution of mar- Trusts Surviving spouse may elect to have his/her interest put riage, revocation of the under testamentary trust. trust. Seek advice of counsel.

28 Buyer’s Guide Ways to Take Title In Nevada Your Guide to Purchasing Your Dream Home

How you take Title - Advantages and Limitations Title to real property in Nevada may be held by individuals either in Sole Ownership or in Co-Ownership. Co-Ownership of real property occurs when title is held by two or more persons. There are several variations as to how title may be held in each type of ownership. The following brief summaries reference seven of the more common examples of Sole Owner- ship and Co-Ownership.

Sole Ownership • A Man or Woman who is not married. Example: John Doe, a single man. • An Unmarried Man/Woman: A man or woman, who having been married, is legally divorced. Example: John Doe, an unmarried man. • A Married Man/Woman, as His/Her Sole and Separate Property: When a married man or woman wishes to acquire title as their sole and separate property, the spouse must consent and relinquish all right, title and interest in the property by deed or other written agreement. Example: John Doe, a married man, as his sole and separate property.

Co-Ownership • Community Property: Property acquired by married persons jointly or individually during marriage, other than by gift, bequest, devise, descent or as the separate property of either is presumed community property. Example: John Doe and Mary Doe, husband and wife, as community property. Example: John Doe and Mary Doe, husband and wife. Example: John Doe, a married man. • Joint Tenancy: Joint and equal interests in land owned by two or more individuals created under a single instrument with right of survivorship. Example: John Doe and Mary Doe, husband and wife, as joint tenants. • Tenancy in Common: Under tenancy in common, the co-owners own undivided interests; but unlike joint tenancy, these interests need not be equal in quantity and may arise at diferent times. There is no right of survivorship; each tenant owns an interest, which on his or her death vests in his or her heirs or devisee. Example: John Doe, a single man, as to an undivided ¾ ths interest, and George Smith, a single man as to an undivided 1/4th interest, as tenants in common. • Trust: Title to real property in Nevada may be held in trust. The trustee of the trust holds title pursuant to the terms of the trust for the beneft of the trustor/benefciary.

The preceding summaries are a few of the more common ways to take title to real property in Nevada and are provided for informational purposes only.

There are signifcant tax and legal consequences on how you hold title. We strongly suggest contacting an attorney and/ or CPA for specifc advice on how you should actually vest your title.

Concurrent Co-Ownership Interests The comparison below is provided for information only, it should not be used to determine how you hold title. We highly recommend that you seek professional counsel from an attorney and/or CPA to determine the legal and tax consequences of how title is vested.

29 Fidelity National Title®

Community Community Community Property w/ Joint Tenancy Trust Partnerships Property Property Right of Tenancy in Common Arrangements Trusts Survivorship

Any number of Only married persons Any number of Any individual, group, persons. Can Any number of should sign ac- persons and/or partnership of Only married persons be married persons persons and/or Only married persons quisition deed to corporations and corporations. Other alone or with others- corporations and accept this special partnerships special no corporations-no partnerships form of vesting title MUST be at least two requirements partnerships

t Ownership is a

s Interests are equal Ownership can be Ownership and Each partner’s share personal property Property retains its

e Ownership and and undivided. Yet divided into any num- r management of management of pro- is personal property in interest and can be character of e each person controls ber of interests-equal t property is equal perty is equal partnership entity divided into any community property

n his/her own interest or unequal

I number of interests Division of

Title is in the commu- Each co-owner has a Title is held by nity and each interest Title is in the commu- Ownership is joint. Title is held by trustee separate legal title to Ownership is by trustee or trustees is separate, but nity subject to special Sale by one severs or trustees pursuant his/her undivided partnership entity only pursuant to the trust

Title management is tenancy as to others to the trust agreement survivorship right agreement unified interest

Both co-owners have Both co-owners have Possession by Equal right of Equal right of Depends on provision Depends on provision equal management equal management partnership by possession possession in trust agreement in trust agreement and control and control managing partner(s) ossession P

Designated parties in the Require written con- Conveyance MUST be Require both spouses trust instrument authorize sent of other spouse Conveyance by one Each co-owner’s by designated general the trustee to convey By the trustee ance to join for valid convey-

y or actual conveyance partners. All limited pursuant to the powers ance except for owner severs the joint interest may be con- property. Also a by deed. Separate in- tenancy-but only as to veyed separately by partners need to con- beneficiary’s interest may contained in the trust

ve security for attorney terest is devisable by that owner’s interest its owner sent if sale is 100% be sold separately (as instrument n fees will. of assets personal property) unless restricted Co

s Purchaser can only Purchaser will become Purchaser acquires ’ Purchaser can only r acquire 100% of title a tenant in common interest held by the acquire 100% of the Purchaser will become of community. Both with the co-owners in Purchaser acquires in- trustee. Beneficiary’s Purchaser acquires title. Both spouses a tenant in common tus spouses must consent the property as to the terest that partnership interest may be the interest held by must convey. Cannot with the other co- ta

chase or convey. Cannot be purchaser’s interest. owned. conveyed separately the trustee.

r be a co-owner with owners in the property. S a co-owner with Other owners may (as personal property) his/her spouse.

Pu his/her spouse. remain joint tenants. unless restricted.

Depends on terms of trust On the death of the first On the death of the first Partner’s share in partner- Trust instrument may provide Upon each owner’s death, instrument. Death of spouse, half interest be- spouse, the individual half Each owner’s interest is ship is devisable by will or for distribution on death of his/her interest passes to trustee may terminate of longs to the surviving interest passes to the devisable by will or passes succession under probate first spouse’s half interest. th convert trust to other surviving spouse, just the the remaining survivors by statutes. May cause a May be devisable by will. Sur- a spouse. Other half interest by succession under pro- operation of law. Such arrangements. Successor viving spouse may elect to ect of is devisable by will, or same as joint tenancy. No bate statutes. No right dissolution of partnership interests are not devis- beneficiaries may have his/her interest put under f De separate interest is of survivorship. dependent on terms of passes by succession be named in the trust in- testamentary trust. Seek ad- E devisable by will. able by will. partnership agreement. under probate statutes. strument. vice of counsel.

Community Community Community Property w/ Joint Tenancy Trust Partnerships Property Property Right of Tenancy in Common Arrangements Trusts Survivorship

s’ If the first spouse’s inter- r Unless joint tenancy is Depends on terms est is devised by will or broken, last surviving Heirs or devisee Heirs or devisee have of trust instrument. passes by succession, Due to surviving right, Distribution depends

tus joint tenant owns become tenants in rights in partnership Trust may terminate remaining spouse and the survivor spouse on the terms of the entire property in- interest but not in or other trust ta devises or heirs hold owns 100% of the title. common with trust instrument. S title as tenants in terest, which is other owners. specific property. arrangements may common. now devisable by will. be created. Successo

Property of the community Partnership real property s Property of the community Creditor needs to obtain

’ Each owner is subjected is liable for debts of either only subject to execution r is liable for debts of either a final court order for any Creditor needs to obtain spouse made before or to execution sale to satis- Each owner’s interest is

ts sale by partnership o spouse made before or fy debt. Joint tenancy is subject to execution sale. execution sale of the final court order for exe- t

h during marriage. Entire creditor. If debt of during marriage. Entire broken. Buyer at sale Buyer at sale (usually beneficial interest of an cution sale to satisfy property may be sold individual partner, only property may be sold at (usually Creditor) be- Creditor) becomes tenant order to have specific debts of either or both edi at execution sale to that Partner’s share Rig r execution sale to satisfy comes tenant in common with other owners. trust property to be sold to spouses. satisfy debt of either (personal property) is C debt of either spouse. with other owners. satisfy the debt. spouse. subject to execution sale.

Trust arrangement is Strong presumption Property is specifically When conveyance is Should be clear from ONLY created by written Property is still presumed that any property Must be expressly stated in the deed to unclear, tenancy in conveyance that instrument. to be community property. acquired by either stated that property be community property common is presumed, grantees have status. Conveyance MUST be Status may change upon married persons acquired as unless community If not, could be found to trustee of the trust. The death, dissolution of esump- with right of survivor- trust itself is NOT a legal marriage, or revocation r during marriage is joint tenancy. ship. property pre- to be tenants in

P entity capable of holding of the trust. community property. sumptions apply. common. title.

Fidelity National Title®

Property Tax Penalties

Many tax delinquencies occur during the frst year of property ownership. New property owners should be aware of the following information:

Taxes for the fscal year are due on the third Monday in August, but may be paid in four installments if the taxes exceed $100. The annual schedule for real property and mobile home taxes are:

First quarter ...... Third Monday in August Second quarter ...... First Monday in October Third quarter ...... First Monday in January Fourth quarter ...... First Monday in March

Any installment may be paid prior to its due date. In order to avoid a penalty, an installment must be paid no later than 10 days after its due date.

Many taxpayers will receive a Statement of Tax Distribution instead of a tax bill with payment coupons. This means that a mortgage company has requested the tax bill information for the property. If un- sure whether their mortgage company is supposed to make the property tax payments, taxpayers are encouraged to call their lender to get a clear understanding of who is responsible.

Some property owners may not receive either a tax bill or distribution statement. This usually happens in cases where the property has recently been purchased, a mortgage has been paid of or refnanced, or the mailing address is incorrect.

32 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Treasurer’s Ofce Tax Bills/Distribution Statements

The Treasurer's Ofce mails tax bills/distribution statements and other important notices to the mailing address on record in the County Assessor's Ofce. Each year a substantial number of these are returned as undeliverable because the property owner hasn't notifed the Assessor's Ofce of an error or a new mailing address. Filing a change of address with the post ofce, or writing a diferent address on a check will not result in a mailing address change in the County's records.

If someone has not received a tax bill or statement by August 1, they should call the Clark County Treasurer's Ofce to fnd out the amount due and request a bill. Property owners are responsible for paying their taxes on time, whether or not they have received their tax bill.

Taxpayers can see which entities they pay taxes to and how much each entity receives by looking at the tax distribution table on their tax bill or statement. More detailed information on the authority for the specifc tax levies can be viewed on the County's website at the address noted below.

During the fscal year a taxpayer may check the installment due dates and the amount of taxes due/ paid by going to the website below.

Clark County Treasurer’s Ofce www.ClarkCountyNV.gov/treasurer 702-455-4323 (select option 2 from the main menu)

Nye County Treasurer’s Ofce https://www.nyecounty.net/253/Treasurer 775-482-8147

33 Advantages of Having Fidelity National Home Warranty on Your House

Fidelity National Title®

What is Home Warranty? A home warranty ensures 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 nationwide Fidelity National Financial traded on the New York Stock Exchange (symbol FNF).

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 ofers a basic coverage. Whereas, the Comprehensive Plus Plan covers 29 additional items plus Air Conditioning/Evaporative Cooler. Fidelity National Home Warranty also ofers a Condominium/Townhouse Plan and a Mobile Home Plan. Review the application to choose options that you may consider important.

When is the Home Warranty put into efect? At the close of escrow payment is due to the home warranty company. Your Escrow Ofcer will have the information and the invoice showing which type of coverage you have requested.

If I’m selling a home, why should I provide a Home Warranty? Providing Fidelity National Home Warranty as an incentive to the buyer may be the edge you may 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 a copy of the seller’s coverage option. In addition, you’ll be able to provide this to your buyer at a competitive price.

For an application or additional questions, please contact Fidelity National Title Home Warranty at 1-800-308-1422

34 Buyer’s Guide Guide to Closing Costs Your Guide to Purchasing Your Dream Home

Sellers Generally Pay... Buyers Generally Pay...

• Title Insurance Premiums* • Title Insurance Premiums* • Escrow Fee* • Escrow Fee* • Notary Fees (if applicable) • Notary Fees (if applicable) • Recording charges for all documents in • Recording charges for all documents in seller’s name buyer’s name • Real Estate Commission • Termite inspection (according to contract) • Document Preparation Fee for Deed • Tax Proration (from date of acquisition) • Clark County Document Transfer Tax • Homeowner’s Transfer Fee ($5.10 per $1,000 sales price) • All new loan charges (except those required • Nye County Document Transfer Tax by lender for seller to pay) ($3.90 per $1,000 sales price) • Interest on new loan from date of funding to • Any City Transfer/Conveyance Tax 30 days prior to frst payment (according to contract) • Assumption/Change of Records Fees for take • Any Loan Fees required by buyer’s lender over of existing loan • Payof of all loans in sellers’ name (or existing • Benefciary Statement Fee for assumption of loan balance if being assumed by buyer) existing loan • Interest accrued to lender being paid of • Inspection Fees (roof, property inspection, • Statement Fees, Reconveyance Fees and any geological, etc.) loan Prepayment Penalties • City Transfer/Conveyance Tax (according to • Termite Inspection and work (according to contract) contract) • Fire Insurance Premium for the frst year • Home Warranty (according to contract) • Any judgements, 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 • Homeowner’s Association Document Fee • Any bonds or assessments (according to contract) • Any and all delinquent taxes

*These items might not apply to your County. Some counties split their title and escrow fees between the Seller and Buyers. While some counties, the Sellers are responsible for paying the title insurance (CLTA policy) and escrow fees and the Buyers pay the title insurance (ALTA Homeowner’s Policy). Please check with your Fidelity National Title Sales Representative for this information.

35 What Closing Costs Are All About

Fidelity National Title®

Closing costs or settlement costs are an accumulation of separate charges paid to diferent entities for the professional services associated with the buying and selling of real estate.

Some of the items associated with the closing costs are:

Title Insurance Premium Fee paid by an individual to ensure he has a marketable title or (in case of a lender) to ensure its lien position.

Real Estate Commission Fee paid to a real estate company for services rendered in listing, showing, selling and consummating the transfer of property.

Transfer and Assumption Charges Fees charged by a lender to allow a new purchaser to assume an existing loan.

Recording Fees Fees assessed by a county recorder’s ofce for recording the documents of a real estate transaction.

Loan Fees Fees charged by a lender in connection with the processing of a new loan. These may include points, origination fee and credit report.

Escrow Fees Fees charged by a title and/or escrow company for services rendered in preparing documents necessary in the consummation of a real estate transaction.

Additional Settlement Taxes, insurance, impounds, interest prorations and termite inspection fees.

Your Fidelity National Title Escrow Ofcer will be happy to review the above and other closing costs with you and explain them before you fnalize your transaction and take ownership of your property.

Title Insurance

Just how much is the title insurance going to cost you? Not as much as you probably think. Only a small percentage of closing fees are actually for title insurance protection. Title insurance is usually less that 1 percent of the purchase price of your property and less than 10 percent of your total closing costs.

Although title insurance is a 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 fnd new more efcient ways of delivering our services to you. We encourage you to compare title insurance rates. We think you will fnd that Fidelity National Title’s rates are among the most favor- able in the title insurance industry.

For more information, contact your Fidelity National Title Sales Representative.

36 Buyer’s Guide Overview of Closing Costs Your Guide to Purchasing Your Dream Home

Listed below are some typical closing costs you, as the buyer, may incur as part of your loan transaction. When you apply for a loan, you will receive a Good Faith Estimate of closing costs and settlement charges, along with a booklet that will explain these costs.

Appraisal: 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: A one time fee that covers the cost of the credit report.

Loan Discount: A one time fee used to adjust the yield on the loan to what market conditions demand. It is often called “points”.

Loan Origination Fee: The lender’s administrative costs in processing the loan are covered by this fee.

PMI Premium: You might be required to pay an up front fee for mortgage insurance, depending on the amount of your down payment. Lenders may also require monies be placed into a reserve account held by them.

Prepaid Interest: Depending on the time of month your loan closes, this per diem 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.

Taxes and Hazard Insurance: You may be required to reimburse the seller for property taxes, prorated depending on the month in which you close. You will also need to pay a year’s hazard insurance premium up front. Also, you might be required to put a certain amount for taxes and impounds into a special reserve account held by the lender.

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 a buyers’ title policy (which protects you). These are both one time fees.

37 Moving Checklist

Fidelity National Title®

Planning and preparing down to the last few details will make your move easier. The following schedule will help keep you on track.

8 Weeks Before the Move If your are using a professional mover, get estimates from diferent moving companies and choose the one that best suits your needs. If you are moving yourself, get estimates from the truck rental companies. Be sure to reserve in advance. Draw a foor plan of your new house. This will help you decide what furniture stays and what furniture will go. Use up things that can’t be moved - such as food in your freezer and fammable household aerosol cleaning products. Ask your agent for a relocation package for your new location or contact the Chamber of Commerce in your new location and start gathering information about your new hometown.

6 Weeks Before the Move Discuss costs, insurance, packing, loading, delivery, and the claims procedure with your mover. Inven- tory all of your possessions now. Determine what can be sold and what can be donated for a tax deduction to charity. Get copies of your records from doctors, dentists, lawyers, accountants, and veterinarians, etc. Make arrangements to transfer your children’s schools records. Find out from your accountant or the IRS about tax-deductable moving expenses. Make sure you keep accurate records.

4 Weeks Before the Move If you have contracted to have the mover do all the packing for you, arrange to have this task completed a day or two before loading the truck. If you need it, arrange for storage. Clean or repair furniture, curtains or carpets that need it. Hold a garage sale. Use the extra cash to splurge a little on your new place. If you are moving yourself, fgure out how many boxes you’ll need. Many truck rental companies will provide this service.

3 Weeks Before the Move • Assemble packing materials • Arrange to cancel utilities and services at your old • Furniture pads home and have them installed at your new home. • Hand truck • Make travel and hotel reservations. • Dolly • Begin packing items you don’t need. • Packing tape • Don’t pack too much weight in an unreinforced box. • Bubble wrap • Make sure your cell phone works in your new neighborhood. • Crumpled newspapers • Get car license, registration, and insurance in order, as • Scissors necessary. • Utility knife • Large self-stick labels • Felt tip markers • Boxes and more boxes

38 Buyer’s Guide Your Guide to Purchasing Your Dream Home

2 Weeks Before the Move • Arrange to transfer all your bank accounts to new branch locations. • Make any special arrangements to move pets, such as purchasing airlines reservations and traveling containers. • Consult your veterinarian about how to make moving easier on your pet. • Have your car checked and serviced for the trip. Make sure tires are in good shape and all fuids are at adequate levels. • Cancel any direct deposit or automatic payments arrangements on bank accounts that you are closing. • Cancel delivery services.

1 Week Before the Move • Transfer all medical prescriptions to pharmacy in your new location. • If you will need a baby-sitter, arrange for moving day service. • Return library books and videotapes.

2 of 3 Days Before the Move • Defrost your refrigerator and freezer. • Have the movers pack your shipment. • Arrange to have cash, a certifed check, or money order ready to pay the driver on delivery day. • Set aside valuables and legal documents to go with you, not on the moving van. • Pack clothes and toiletries to go with you; take a day or two of extra clothes in case of delay. • Pack you frst day handy items box (see delivery day) to go with you.

Moving Day • Do it yourself movers should pick up truck early. • Make a list of every item and box loaded onto the truck. • Let the mover know where you can be reached. • Before your sign it, read the bill of loading. Keep it in a safe place until your goods are delivered, charges are paid, and any claims settled. • Check your old house to make sure you’ve turned of appliances and the water. • Leave the keys and garage door openers in the house. • Lock all doors and windows. • Be on hand to answer questions and give directions to mover.

Delivery Day • Assemble frst day handy items • Instant cofee/tea/soft drinks • Pencils & paper • Scissors • Shelf liner • Local phone book • Utility knife • Check of all boxes and items as they • Masking tape • Cofee cups come of the truck • Bath towels • Tea kettle/Cofee maker • Install new locks • Trash bags • Paper plates • Make sure the utilities are hooked up • Toiletries kit • Toilet paper • Soap

39 Glossary

Fidelity National Title®

These defnitions are to acquaint you with terms commonly used in Real Estate transactions. These are intended to be general and brief and are not complete and wholly accurate when applied to all possible uses of the term. Please consult your Real Estate Agent for more information or questions regarding these terms.

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 of 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 discriminated persons of suitable qualifcations.

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) for liability.

Balloon Note - A note calling for periodic payments which are insufcient 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.

Benefciary - (1) One for whose beneft a trust is created. (2) In states in which deeds of trust are commonly used instead of mortgages, the lender (mortgagee) is called the benefciary.

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.

40 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Buy Down - A fxed rate loan where the interest rate and payment are reduced for a specifc 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 fnal 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, appraisal fees, etc.

Closing Disclosure (CD) - a fve page document that gives you more details about your loan.

Closing Statement - The statement which lists the fnancial settlement between buyer and seller, and the costs each must pay.

Cloud on Title - An invalid encumbrance on real property, which, if valid, would afect 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.

Community Home Buyers’ Program - A fxed rate loan with a low 3 to 5% down payment, no cash reserve requirement, and easier qualifying ratios. Subject to borrower meeting income limits and attendance of a 4 hour training course on home ownership.

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, mort- gaged 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 - Generally, an instrument given to pass fee title or easement to property that has to be recorded with the County Recorder.

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 (benefciary), and reconveyed upon payment in full.

Deposit - Money given by the buyer with an ofer to purchase. Shows good faith. Also called earnest money.

Discount Points - A negotiable fee paid to the lender to secure fnancing for the buyer. Discount points are up front 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.

41 Fidelity National Title®

Disposable Income - Monthly income left over after fxed obligations and living expenses are paid for that period.

Documentary Transfer Tax - A state tax on the sale of real property, based on the sale price.

Down Payment - Cash portion of the purchase price paid by a buyer from his/her own funds.

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 fee title.

Equity - The market value of real property, less the amount of existing liens.

Execute - To put into efect: carry out. To make valid, as by signing a deed.

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 fnancing.

Fee Simple - An estate under which the owner is entitled 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 frst mortgages, enabling lenders to loan a very high percentage of the sale price.

FHLMC (Freddie Mac) - Federal Home Loan Mortgage Corporation. A Federal Agency purchasing frst 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 the property it is liening on.

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 food damage. Required by lenders (usually banks) in areas designated (federally) as potential food areas. The insurance is private but federally subsidized.

FNMA (Fannie Mae) - Federal National Mortgage Association. A private corporation dealing in the purchase of frst mortgages, at discounts.

GNMA (Ginnie Mae) - Government National Mortgage Association. A Federal Association, working with F.H.A., which ofers special assistance in obtaining mortgages, and purchases mortgages in a secondary capacity.

Good Faith - Having good intentions, such as a buyer putting a deposit for a house or when a lender discloses all information/costs to the loan.

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.

42 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Hazard Insurance - Real Estate insurance protecting against loss caused by fre, natural causes, vandalism, etc., depending upon the terms of the policy.

Homeowner’s 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 of 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.

Homeowner’s Insurance - Includes the coverage of Hazard Insurance plus added coverage such as personal liability, theft outside of the home (items stolen from the insured’s car), and other such coverage.

Housing Starts - Number of houses on which construction has begun. The fgures are used to determine the availa- bility, housing, need for real estate loans, need for labor and materials, etc.

Impound Account - Account held by 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 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 specifc adjustable rate mortgage.

Instrument -A legal document, such as a deed, mortgage, will, lease, etc.

Interest Rate - The percentage of an amount of money which is paid in order to borrow money for a specifed amount of time.

Interest Rate Cap - The maximum interest rate increase of an adjustable rate loan. For example: 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 that to the heirs of the deceased.

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 specifed period of time and for a specifed 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 sufcient 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.

43 Fidelity National Title®

Loan Origination Fee - A one time set up fee charged by a lender.

Loan Package - The fle of all items necessary for the lender to decide to give or not to give a loan. These items would include the information on the prospective borrower (loan application, credit report, fnancial 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 specifc 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.

Mechanic’s 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.

Mortgage - The party lending the money and receiving the mortgage. Some state treat the mortgagee as the “legal” owner, entitled to rents from the property. Other state treat the mortgage as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.

Mortgage Credit Certifcate (MCC) Program - A frst time home buyer program subject to purchase price and income limits and limited to certain counties. The MCC program is actually a special tax credit and assists buyers in qualifying on almost any loan program.

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 - The 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 oppor- tunity to sell 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 defnite sum of money at a specifed date or on demand. It usually provides for interest and is generally secured by mortgage or trust deed.

44 Buyer’s Guide Your Guide to Purchasing Your Dream Home

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 fling a mechanic’s lien.

Notice of Completion - A notice, recorded to show that a construction job is fnished. The length of time in which mechanic’s liens may be fled depends upon when and if a notice of completion is recorded.

Notice of Default - A notice fled to show that the borrower under a mortgage or deed of trust is in default (behind on the payments).

Ofer - A presentation or proposal for acceptance, in order to form a contract. To be legally binding, an ofer must be defnite as to price and terms.

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.

Payof - 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, any 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 specifes property, buyers, price and terms. How specifc 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.

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.

45 Fidelity National Title®

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 - One 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 specifed 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 as 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 afxed to the land, such as buildings, fences, and those things attached to the buildings, such as light fxtures, plumbing and heating fxtures, 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 fne 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 documents afecting 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 no- tarizing of an instrument to be recorded.

Recording Fee - The amount paid to the recorder’s ofce in order to make a document a matter of public record.

RESPA - Real Estate Settlement Procedures Act. A Federal statute efective June 20, 1975, requiring disclosure of certain costs in the sale of residential (one to four family) improved property which is to be fnanced by a Federally insured lender.

Right of Survivorship - The right of a survivor of deceased person to the property of said deceased. A distin- guishing characteristic of a joint tenancy relationship.

Sales Contract - Another name for a sales agreement; purchase agreement, etc.

46 Buyer’s Guide Your Guide to Purchasing Your Dream Home

Second Mortgage - A mortgage which ranks after a frst 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 frst, second, third, etc. lien.

Septic System - A sewage system, whereby waste is drained through pipes and a tile feld (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 in the ground.

Simple Interest - Interest computed on principal alone, as opposed to compound interest.

Special Assignment - Lien assessed against real property by a public authority to pay costs of public improvements (sidewalks, sewers, street lights, etc.) which directly benefts the assessed property.

Specifc Performance - An action to compel the performance of a contract, when money damages for breach would not be satisfactory.

Statement of Identity - Also called Statement of Information, a confdential form flled 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 to or junior to.

Succession - The passing of real property by will or inheritance, rather that by grant or deed or any other form of purchase.

47 The information in this book is provided for reference purposes only. While efforts have been made to provide the most current and accurate data, Fidelity National Title Company is not responsible for any errors or omissions.

(Published: 2018)

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