Real Estate Terminology

Knowing real estate terminology before heading into a real estate transaction can help you communicate with your agent! Here are some noteworthy real estate terms:

Abstract of Title

A complete historical summary of the public records relating to the legal ownership of a particular property from the time of the first transfer to the present.

Agreement of Sale

Also known as contract of purchase, purchase agreement, or sales agreement according to location. A contract in which a seller and buyer agree to certain terms spelled out in writing and signed by both parties.


A professional appraiser’s estimate of the market value of a property based on local market data and the recent sale prices of similar properties.

Earnest Money

A deposit given by the buyer to bind a purchase offer, and which is held in escrow. If the property sale is closed, the deposit is applied to the purchase price. If the buyer does not fulfill all contract obligations, the deposit may be forfeited.


The value of the property, less the loan balance and any outstanding liens or other debts against the property.


Legal right of access to use of a property by individuals or groups for specific purpose easements may affect property values and are sometimes part of the deed.


Funds held by a neutral third party (a title company) until certain conditions of a contract are met and the funds can be paid out. Escrow accounts are also used by loan servicers to pay property taxes and homeowner’s insurance.

Fixed Rate Mortgage

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


The amount of money borrowed from a lender to buy a home, or the amount of the loan that has not yet been repaid. Does not include the interest paid to borrow.

Purchase Offer

A detailed, written document which makes an offer to purchase a property, and which may be amended several times in the process of negotiations. When signed by all parties involved in the sale, the purchase offer becomes a legally binding sales agreement.


The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land. Clear title refers to a title that has no legal defects.

Title Insurance

Insurance policy that guarantees the accuracy of the title search and protects lenders and homeowners against legal problems with the title.

Title Search

A historical review of all legal documents relating to ownership of a property to determine if there have been any flaws in prior transfers of ownership or if there are any claims or encumbrances on the title to the property.


Contact your real estate agent to start your real estate venture today!

Our Code of Ethics

The National Association of REALTORS® Code of Ethics and Standards of Practice

Over 100 Years Since Adoption

Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves.

REALTORS®, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS® a common responsibility for its integrity and honor. In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession.

REALTORS® having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm, bring such matters to the attention of the appropriate Board or Association of REALTORS®. Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners.In instances where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain.

The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal. In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that others should do to you, do ye even so to them.” Accepting this standard as their own, REALTORS® pledge to observe its spirit in all of their activities whether conducted personally, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below.

Duties to Clients and Customers

Article 1

When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.

Article 2

REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law.

Article 3

REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker.

Article 4

REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative.

Article 5

REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.

Article 6

REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation.

Article 7

In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients.

Article 8

REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items.

Article 9

REALTORS®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing.

Duties to the Public

Article 1 0

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.

Article 1 1

The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth.

Article 1 2

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.

Article 1 3

REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it.

Article 1 4

If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation, REALTORS® shall place all pertinent facts before the proper tribunals of the Member Board or affiliated institute, society, or council in which membership is held and shall take no action to disrupt or obstruct such processes.

Duties to REALTORS®

Article 1 5

REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices.

Article 1 6

REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients.

Article 1 7

In the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS® shall mediate the dispute if the Board requires its members to mediate. If the dispute is not resolved through mediation, or if mediation is not required, REALTORS® shall submit the dispute to arbitration in accordance with the policies of the Board rather than litigate the matter.

In the event clients of REALTORS® wish to mediate or arbitrate contractual disputes arising out of real estate transactions, REALTORS® shall mediate or arbitrate those disputes in accordance with the policies of the Board, provided the clients agree to be bound by any resulting agreement or award. The obligation to participate in mediation and arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their firms to mediate and arbitrate and be bound by any resulting agreement or award.

Effective January 1st, 2020

Why Do I Need a Buyers Agent?

You may be an expert in something, but it probably isn’t real estate. Here at Bozeman Brokers, we want you to have the best home buying experience possible, after all it is the biggest investment you will likely ever make! We believe that having individual real estate representation in the buying process helps you to get the most out of the experience. This list is here to help you through some of the ambiguities when deciding whether or not to use a Realtor for a buyers agent.


The reasons you should probably use a buyers agent- 

Negotiation experience

The average years of experience for the Brokers in our office is over 25 years. This means our Brokers have been through over 25 years worth of negotiations. Our past experiences allow us to thoughtfully anticipate and understand our client’s needs and wants while applying our knowledge of the market to satisfy your goals. 

First to know about new listings

Professional buyers agents are in the know about new listings and other properties before they come on the market. This gives you an advantage over unrepresented buyers, and could be the difference between an accepted offer or waiting for the next property. 

Network of trusted vendors, inspectors, lenders, and appraisers

Good Realtors have professional relationships with quality vendors, inspectors, lenders, and appraisers that all help the process move along without a hitch. 

Lending knowledge

Although Realtors don’t have the ability to provide loans, experienced agents have trusted professional relationships with mortgage lenders and can refer you to the lender who will best suit your needs.

Full disclosure

The largest majority of lawsuits that occur in real estate transactions occur because of disclosure issues. Any transaction involving Realtors in the state of Montana requires an Owner’s Property Disclosure Statement. This document’s intention is to inform the buyer about potential issues and relevant information regarding the property. 

Interest Advocacy

An experienced real estate agent utilizes open communication to best suit the individual buyer. There are many variables associated with the purchase of a home. An agent can accurately navigate the variables of a contract, inspection, negotiation, etc. and represent the buyer’s best interest.

Broker Partner, Dan Porter, says “A seller or buyer needs to know they can trust their Realtor to represent their interest with honesty and fairness at all times and maintain their confidence throughout the process.”

Peace of mind

Real estate documents are contractual. Experienced Realtors can fully explain your rights and liabilities pertaining to each document in layman’s terms. The representation of a Broker or Realtor gives you access to a database of trusted and accurate knowledge enabling a greater understanding of the real estate transaction.


The reasons you may think you don’t need a buyers agent but actually do- 

“Realtors cost a lot”

On a typical listed property, buyer’s do not directly pay for the services of the Realtor they work with. The buyer’s agent is paid by the seller’s negotiated commission.

“Middlemen are unnecessary”

This notion may be a common belief amongst many. But, in the case of real estate having an expert on your side can make all the difference. 

Broker Partner, Patrick Resop, says “We have outside sources that either buyers and sellers may not be aware of, from lenders to inspectors, to appraisers and so on.  We are a terrific source of information to assist them in ending up with the end result that helps them achieve their goals.” 

“I’m not their only client, they won’t have time for me”

Good Brokers and Realtors are exceptionally talented at juggling multiple clients. In fact, the busiest agents are generally some of the best agents to work with. Our agents are full-time active Brokers in the local real estate market. So yes, we are in the know and we do have time for you.

“They will only show me their listings”

If you are experiencing this, get a different agent. Every Realtor has access to the Multiple Listings Service, so every listing is able to be shown by every agent. Professional and experienced buyers agents listen to their clients. They show the houses that best fit the client’s needs even if it isn’t their company’s listing. 


Hopefully this has helped you come to the conclusion best for you, if you are still unsure contact us at the Bozeman Brokers office – 406-587-5900 – or shoot us an email – info@bozemanbrokers.com –  and we can walk you through the next steps to get you in the home you want to be in.


By: Michaela Sherritt

Items to Become a Pre-Qualified Buyer

When you first start talking to a mortgage lender, they will likely provide you with a list of the specific documents they need to issue a pre-approval. This list can vary from one mortgage company to the next, but here are some of the most common items you will need to become a pre-qualified home buyer.


Social security number 

Social security numbers will be needed for all borrowers who are listed on the mortgage loan. This information can be verified through a Social Security card, tax documents, or anything else that shows the SSN. The lender needs this to verify your identity, to request tax returns from the IRS, and to pull your credit reports.

Proof of employment

Your mortgage lender will need proof of employment.  Employer’s name, mailing address and phone number. They want to verify your employment, because it relates to your ability to repay the loan.

Proof of income

This will validate your income for pre-approval and underwriting. It might come in several forms. Usually, it’s your two most recent pay stubs, or the electronic equivalent, that show your year-to-date earnings. It’s your average annual income the lender wants to know about. The lender might also use tax records to verify your earnings.

Tax documents

This is a standard document for mortgage pre-approval. Most lenders want to see your W-2 statements and tax returns for the last two years. Among other things, your W-2s show how much money you earned over the previous year.  

Place of residence

This one is self-explanatory. For pre-approval and underwriting purposes, the lender wants to know where you’ve lived for the last couple of years.

Bank account information

The lender will want to know how much money you have in the bank. They need to ensure you have enough funds for your closing costs, down payment, and cash reserves. So, they will probably ask you for account statements and balances for any checking, savings, or money market accounts. This is another standard mortgage document for pre-approval.

Credit information

Do you have other outstanding loans that you’re currently repaying? If so, the lender may ask for documents related to those accounts. They need this information to measure your debt-to-income ratio, among other things.

Gift letters

Are your family members going to provide funds to help you cover your down payment expense? If so, you’ll need to provide a gift letter along with your other mortgage documents. The lender needs to verify that the money is truly a gift, and that your relatives don’t expect any form of repayment.

Self-employment documents

Do you run your own business? If so, you might have to provide some additional documents during the mortgage pre-approval process. This might include balance sheets, a profit-and-loss statement, or federal tax statements for the last two years.


Wow your mortgage lender and real estate agent by coming prepared with these documents. They want to make you a pre-qualified buyer and get you into your dream home! Want more tips about buying a home? Visit our Buyer Tips page to learn more or contact an agent to get started today.

Investing in Residential Real Estate

The pros of investing in a multi-family property

Building your investment portfolio with a real estate purchase is a wise choice for those who are willing to stay with their investment over a period of time. Most experts recommend that you hold onto your property for 5 years or more to maximize its’ return. While there are few types of investment property types to consider for residential real estate, small and large multi-family units are the most common real estate investment options.

This article will focus on why you would want to consider purchasing a multi-family property as part of your investment portfolio.

Are multi-family properties a good investment in every market?

Multi-family property investments work well in most markets because of strong housing demand and rental income potential. It comes down to a mathematical formula – multi-unit properties allow you to capitalize on additional rental income that you wouldn’t have access to in a single-family unit. Most small multi-family dwellings include two to four units. Anything above four rental units starts to fall into the categorization of a commercial property which leads to a more complex set of rules for financing. Commercial real estate loans focus more on the experience of the buyer and the earning potential of the property making the acquisition process somewhat more difficult. Some additional reasons why a multi-family property can be a good investment in most markets include:

  • Bigger cash flows
  • A larger pool of tenants (less risk for the owner)
  • Scalability of your real estate portfolio

Education opportunities factor in where to buy your investment property

Purchasing an investment property in a community that has educational opportunities like cities with a university are typically a good choice because of the high demand for rental housing. And, communities with college populations typically have a younger demographic, often with 75% of the residents under the age of 55  that commonly stay around after graduation to start their own business which brings in new jobs and further contributes to the health of the economy. These markets are ideal when considering where to purchase your small, multi-family property.

Tax Benefits to Investing

If you own an investment property, you have the opportunity to deduct certain costs when filing your annual income taxes. These can include:

  • Mortgage Interests
  • Business Expenses
  • Improvements/Repairs

Depreciation is also something you can benefit from as an investment property owner. The IRS assumes wear-and-tear on every building as time passes (depreciation of an asset). As a rental property owner, you have the opportunity to use this depreciation as an annual write off reducing your tax liability.

Living in your multi-family property

Are you looking to bring your own housing expenses down? You should consider purchasing a multi-family property and reside in part of the property and rent the other unit(s) out. This is an obvious benefit to you directly bringing down your mortgage payment. Depending on the market , you can even eliminate your payment completely by having your renters cover your mortgage payments. In this scenario you could also pay extra on the mortgage each month, allowing you to build your equity faster.

When purchased at the right time with low borrowing rates, multi-family properties can produce substantial cash flow. It can also reduce your mortgage while providing you with long-term tax benefits. Multi-family properties are a proven income-generating investment choice in most markets. Towns with colleges or low vacant rates offer larger pools of potential tenants.

When is the right time to purchase your first home?

When is the right time to purchase your first home? The answer differs across age groups.

One in five parents say they expect their child to own a home by age 25, yet this doesn’t match up to reality. Younger adults tend to feel the most pressure to own a home, but they’re still waiting on their own time terms, according to a new survey from Porch.com, a home remodeling website. Porch.com surveyed nearly 1,000 individuals between the ages of 18 to 81.

Millennials thought that 30 is the ideal age to buy a home; Gen Xers said 28; and baby boomers said age 27 was the best for buying a home.

Millennials between the ages of 25 to 34 have been slow to catch up to the rates of homeownership that Gen Xers or baby boomers showed at the same age, Urban Institute data shows. Millennials are marrying at later ages and have high student debt to blame for delaying their debut into homeownership. They now represent the largest buying force in the housing industry, according to research this year from the National Association of REALTORS®.

Overall, millennials tend to feel the most judgment from their parents in relation to their life goals, whether that’s buying a home, getting married, or having financial independence. But other generations also feel some pressure, particularly about the adequacy of their home purchase.

“Purchasing a home is one of the most complex and expensive decisions most of us make, so it’s easy to see how not choosing the right style, location, or size can invoke criticism from relatives,” the report notes. “Of the three generations, millennials felt the least amount of pressure from relatives when it came to housing choices, whereas both baby boomers and Gen Xers felt slightly more judged.”

Overall, there is no right or wrong answer when it comes to when you should be purchasing your first home. As long as you feel the time is right, then contact us today!

Article taken from Realtor Magazine.

Realtor VS Broker

Many questions arise when you first step into the Real Estate world. “Where can I find the Realtor?” may be your first question, but the first question you should ask is “Where can I find the best Broker?”


All Brokers are agents, but not all agents are Brokers.


A real estate Broker is a more experienced agent than a licensed Realtor. Brokers have a significant number of completed transactions, additional education, and have passed the State and National Real Estate Broker Exam. Brokers can own agencies and work without supervision. Licensed Realtors are required by law to work under the supervision of a Broker until they have met the previously mentioned criteria.

Choosing to work with a Broker gives you an advantage above other buyers or sellers without representation. Brokers have the experience and knowledge to guide you to a smooth transaction and successful negotiation.  This is why our 10 founders decided to start Bozeman Brokers Real Estate. We pride ourselves on our well established, educated, and experienced Brokers who can give you the best advantage in the real estate market.


Contact a Broker today to learn more about the services available through our professionals.

Things to Unpack First After a Big Move

When you’re surrounded by boxes,  you need a  strategy on how to tackle them to prevent feeling overwhelmed.

Congratulations on purchasing your new home! The hard part is all over, now it’s time to make this space your own… But where do you even begin?

First things first

No matter how much you want to get it over with, there are three important things to do before you can actually start unpacking.

  1. Clean and prepare your new home. It’s easier to wipe down shelves, clean windows and mop floors before your belongings are in place. Make sure your home-to-be is spotless when your items arrive. If you can’t get to your new place early enough to do a thorough cleaning, consider hiring professional cleaners to do the job for you.
  2. Inspect and organize your belongings. Check all the delivered boxes and household items against your inventory sheet to make sure nothing is damaged or missing. Then have each of your possessions taken to the room where it belongs. If everything was properly marked and labeled, sorting your items will be a piece of cake.
  3. Set major furniture and appliances. Position your large furniture pieces and bulky household appliances first. Then you can put any smaller items you unpack later directly in their rightful places. Plan your interior design well in advance so you don’t end up moving heavy pieces around several time

Tackle the necessities

What matters most when unpacking your items after a move is ensuring that your essentials are immediately accessible. So prioritize your belongings, and unpack only the necessities first.




You may not be able to unpack the entire bedroom right away, but you’ll definitely need at least the bed the day you move in. Reassemble the bed frame (if necessary), lay down the sheets, unpack the pillows and spread the blankets so you can get a good night’s rest — you’re going to need it

Provided that you have a change of clothes and some comfortable indoor shoes (as well as curtains on the windows to ensure your privacy), the rest of your bedroom items can wait until you find the time and the energy to deal with them.


Bathroom items

Without a doubt, your personal care items, toiletries and medicines should top the list of the most important items to unpack after your move. Put out toilet paper and soap, find your toothbrush and toothpaste, hang the towels and the shower curtains, and unpack any other bathroom essentials you’ll need to wash away the weariness and stress of moving.


Kitchen necessities

Kitchens tend to take a very long time to unpack and organize properly due to the large number of items that need to be sorted and carefully arranged.

As soon as you’ve hooked up the large appliances, such as the fridge and the stove, move on to your smaller kitchenware. Plates, silverware and glasses should be the first to find their places in cupboards and kitchen cabinets, closely followed by cooking utensils, pots and pans, and pantry items.



Kids’ and pets’ items

If you have young children, unpack some of their favorite toys, books, games and blankets during the first few hours in your new home. Keeping your young ones happy and occupied will let you concentrate on your work and finish it faster.

Of course, you should also take care of your pets’ needs immediately upon arrival. It’s a good idea to pack adequate pet food and some of your animal friends’ favorite toys in your open-first box.




Finishing up

When you’ve unpacked the three most essential rooms in your home (bedroom, bathroom and kitchen), everything else can wait a bit. There are no deadlines to meet, so you can set your own pace when unpacking and decorating your new place — just unpack in order of priority without procrastinating.

Remember, if you stay organized, set reasonable goals, clean after every unpacking phase and dispose of the packing materials in a safe and eco-friendly manner, your new surroundings will soon stop looking like a warehouse full of boxes and start feeling like home.

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