FAQ

For your convenience, the most common customer real estate questions I hear are answered right here. Not finding what you want? Reach out directly to me through my Contact page.

General Questions

Why should I use a Real Estate Salesperson?

A real estate salesperson is more than just a “sales person.” They act on your behalf as your agent, providing you with advice and guidance and doing a job – helping you buy or sell a home. While it is true they get paid for what they do, so do other professions that provide advice, guidance, and have a service to sell –such as Certified Public Accountants and Attorneys

The Internet has opened up a world of information that wasn’t previously available to homebuyers and seller. The data on listings available for sale is almost current – but not quite. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.

If you’re selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service. Only a licensed real estate agent who is a member of your local MLS can get you listed there – which then gets you automatically listed on some of the major real estate web sites. If you’re buying or selling a home, the MLS is your agent’s best tool.

However, the role of an agent has changed in the last couple of years. In the past, agents were the only way home buyers and sellers could access information. Now agents are evolving. Because today’s home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important.

The real estate agent is becoming more of a “guide” than a “salesperson” — your personal representative in buying or selling a home.

What’s your Best advice for First-Time Homebuyers?

Trust the Professionals.

Beware of advice from people who do not work in the industry. Real estate is a popular topic and almost everyone feels like they have some great insight to offer. In reality, the people who know best are the people that work in the business. Good REALTORS® have sold hundreds (maybe thousands) of properties. We know what to expect and what to look out for. Friends and relatives have only bought and sold a few homes, if any at all. Buying and selling a couple of homes does not make someone a well-rounded source of information. I’ve seen too many first-time buyers become persuaded by well-meaning friends and family, only to be disappointed later. Be confident in your decisions and trust the professionals.

What is the difference between a Real Estate Agent and a Real Estate Broker?

Most states require real estate sales professionals to be licensed by the state, so that they can control education and experience requirements and have a central authority to resolve consumer problems.

The terminology used to identify real estate professionals varies a little from state to state.  Brokers are generally required to have more education and experience than real estate salespersons or agents.

The person you normally deal with is a real estate agent or salesperson.  The salesperson is licensed by the state, but must work for a broker.  All listings are placed in the broker’s name, not the salesperson’s.

A broker can deal directly with home buyers and sellers, or can have a staff of salespersons or agents working for him or her.

What's the difference between a REALTOR® and a Real Estate Salesperson?

People use the terms REALTOR® and real estate agent interchangeably, but that is incorrect. There are differences between REALTORS® and real estate agents. They are not the same. Although both are licensed to sell real estate, the basic difference between a real estate agent and a REALTOR® is a REALTOR® is a member of the National Association of REALTORS®. As such, the main difference that you hear a lot about — but are likely confused about — is that a REALTOR® must subscribe to the REALTOR® Code of Ethics.

But what does this mean to a consumer?

The Code of Ethics is strictly enforced by local real estate boards. The Code contains 17 Articles and various underlying Standards of Practice. It’s not just a bunch of rules that agents swear to uphold and adhere to. The Standards are much more restrictive and confining as to conduct than those state guidelines governing agents who simply hold a real estate license. While there is no evidence nor guarantee that all REALTORS® are morally or ethically better than unaffiliated real estate agents, it is an attempt by the industry to regulate and, as such, deserves recognition. Keeping mind, of course, that even the non-NAR member “real estate agent” is held to the same legal standard, as a practical matter.

Are there special home buying programs that I should know about?

Yes

There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important.

Buyer Questions

How much do I have to pay my Real Estate Agent as a Homebuyer?

Nothing

In most cases, you do not have to pay your Real Estate Agent anything to help you purchase a home. The sellers pays their Real Estate Agent a fee, and then that listing agent pays the buyers agent for bringing the buyer and facilitating the transaction.

What’s the first step of the home buying process?

The Mortgage Pre-Approval.

Unless you are paying cash for a house, you will need to get a mortgage. In order to know how much home you can afford, you will need to get pre-approved for a loan. This is the first-step in the home buying process.

How much money do I need for a down payment?

It depends on your loan type. Usually 3% to 5% down.

The most common answer is 3% to 5% of the purchase price. FHA loans just dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down.

What other fees are there, besides the down payment?

Mainly loan origination and closing costs.

The downpayment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.

How long does it take to buy a home?

Around 30 days

The timeline for finding a house varies greatly from person to person. Once you find a house and have an accepted offer, it usually takes around 30 days to close.

When do I get the keys?

At Closing

Under normal circumstances, you will get the keys at the closing. A closing typically takes about an hour. In some cases, the lender will need time to fund the loan and you will need to pick up the keys after the loan has been funded. If you have a Friday evening closing and the loan cannot fund until Monday, you may not get the keys until Monday. Make sure to coordinate your closing to get the keys on the same day, if that is what you need.

I want to buy a house. I know the property and the seller has an agent. Do I need my own agent or can I negotiate a lower fee if I act as my own agent?

If you have to ask this question, you probably don’t have the necessary knowledge to properly represent yourself.

The seller pays the real estate commission, not the buyer, and real estate commissions are already set in the listing contract. It doesn’t cost you anything extra to have your own agent represent you because the seller is already paying for it.

If you don’t have your own agent, the seller’s agent will often represent both you and the seller as a “dual agent” or just represent the seller. This means the agent either has divided loyalties or is working for the seller, not you.

In this situation, since there is only one agent to be paid, sometimes you can get a reduction in price by getting the agent to accept a lower commission from the seller. However, you have to realize that you are interfering in what is essentially an agreement between the agent and the seller — and something that has already been negotiated and agreed upon.

The seller can net the same gain on a lower price if they have to pay less commission. At the same time, the agent is not going to be willing to cut the commission totally in half because – since you don’t have an agent – they are going to be doing some of the work that your agent would normally be doing (whether you realize it or not).

And you’d better know what you’re doing – because the listing agent isn’t going to be on your side. If your offer causes them to reduce their commission from what the seller has already agreed to — that agent isn’t going to be real happy with you.

What is a buyers agent, what does this specifically do for a buyer and who usually pays this "buyers agent"?

On most transactions, there is usually a listing agent and a selling agent. The selling agent is sometimes referred to in media as the buyer’s agent, because he works on the buyer’s behalf and it easier than explaining each time that the “selling agent” is not the listing agent and is actually the buyer’s agent.

However…

There are some agents that market themselves as “buyer’s agents,” “exclusive buyer’s agents,” buyer’s representatives,” and so on. Mostly it is just marketing. At the same time, part of it is because they want to accentuate the reasons a buyer should not go directly to the listing agent when they purchase real estate. This has to do with agency.

See, if a buyer goes directly to the listing agent, they are dealing with an agent that has conflicting responsibilities. Their job is to get a good price for the seller and they may not zealously represent the interests of the buyer. Those who market themselves as “Buyer’s Agents” indicate they are only working for the buyer in a real estate transaction.

The commission is still paid by the seller, no matter what they say in their marketing (with extremely rare exceptions). They either get paid directly by the seller or set up the transaction so that the seller provides a “credit” to the buyer for how much the real estate commission is — then the buyer pays the commission.

I looked at a property yesterday with a realtor who quite obviously has no clue what they are doing. I really want to purchase that house, but don't want the hassle of working with an agent who doesn't know their business. Can I switch agents and still buy that house?

If you want to purchase that property, the only ethical thing is to purchase it through that Realtor. Otherwise, you could set up potential conflicts between your previous agent and whatever new agent you may choose.

You see, if your previous agent finds out you purchased the home with a new agent, they might want to claim all or a portion of you new agent’s commission.  This could develop into a “battle royale” involving real estate agents, offices, managers, brokers, and attorneys.

You may be able to resolve the issue by letting your current agent know you have misgivings about their expertise and ask if a more experienced Realtor from their office can be aboard as your advisor, too.

That is the only ethical way I can think of to handle your situation.  It isn’t “your” ethics I mean, but the ethics of the two agents.  One agent isn’t supposed to make an offer on a property you have already previewed with another agent.  It happens, but it isn’t ethical without some sort of disclosure and agreement between the parties.

I want to buy a home and approached two different real estate agents. One was very informative, handed us brochures, especially on the real estate law and the responsibility of the agent. The other was very informal, made a lot of gestures, and presented nothing in writing.

Agents are all different in their style and how they deal with people. Some are formal and some are informal. That doesn’t necessarily have anything to do with their knowledge and ability. Go with who you like and who you trust. With that being said, there’s no reason an agent can’t be professional, informative, and friendly when meeting people.

Seller Questions

How much needs to be done to my house before putting it on the market?

Many sellers have extreme anxiety over the thought of having to clear out and fix up their home, so much so that it can prevent them from putting the place on the market in the first place. However, in most cases, there’s no need to panic here—or to overshoot your goals. Very often, there’s far less to do than homeowners think. So before spending months and millions (figuratively) upgrading your place—or just throwing up your hands and giving up before you begin—show your home to a Realtor®. You might be pleasantly surprised by your current sales prospects.

How much is my house worth?

The exact price of your own home will depend on its size, neighborhood, and lots of other factors. Further complicating matters is your own skewed perspective: We tend to mentally inflate our home’s positives and airbrush out the flaws that are all too apparent to the cold, calculating eyes of buyers. People always seem to compare their house to the most expensive sale in the neighborhood. Instead, look at the prices of similarly sized homes that have recently sold in your area—data that agents call comparative market analysis, or “comps.” Then, price your place strategically. If you price too high, the home is likely to linger on the market. Meanwhile, pricing low can have major upsides, resulting in multiple bids that could ultimately jack up your price. So, do your homework. Then, discuss a number with your Realtor that feels right—and is realistic.

How long will it take to sell my home?

Right now, nationally, houses spend around 100 days on the market before they sell, although the time varies wildly based on area and price. So, price competitively and make sure that you and your Realtor are getting the place in front of as many eyeballs as possible. The higher the exposure, the faster the offers. Spread the word through your own social networks——real ones and virtual ones. You never know whose passing it along to that special someone will lead to a sale.

Is staging really important?

On average, a staged home sells 88% faster—and for 20% more money—than a home that’s left as is. The reason it works, of course, is it gives buyers a “stage” onto which they can play out their home-owning fantasies and envision themselves living in your home. Choose neutral paint colors and remove any family photos. Give would-be homeowners a blank canvass that they can mentally fill with their loved ones and themselves.

Should I be present when buyers view my house?

NO!

There is not any situation in which this is appropriate. Having the owner in the house makes the buyers uncomfortable. They feel as though they can’t make comments or ask questions that could be offensive. The owner—who has a history and attachment to the house—has the tendency to argue if a potential buyer makes a comment that could be a little negative. This can turn off buyers and lose you offers.

What is the agent’s commission?

While the commission can vary, it is typically 6% of a home’s sale price—and that’s usually shared with the buyer’s agent. But what’s implied by this question is “What are Realtors doing to earn that fat check?” Here are some facts to keep in mind: Unlike lawyers who get paid by the hour, or doctors who are paid by the appointment, listing agents don’t get paid unless they make a sale. For every hour an agent spends with a client, he or she will typically spend nine hours on average working on that client’s behalf doing everything from networking to finding potential buyers to filling out paperwork. And no, not all agents are created equal. Since most contracts last for a year, I recommend that sellers interview three agents prior to selecting one to represent them. It’s no different from choosing an attorney, accountant, or the doctor who will deliver your baby. You want to be sure that you trust that person and are comfortable with them.