Below you can search our collection of real estate FAQs. Please search by keyword. For example, if your question is, “What is a home inspection?”, type, “Home inspection”.
Residential Real Estate Questions.
There are many ways to find a reputable real estate agent. Start with asking trusted friends, coworkers or an attorney.
Please check out this article (How to Find a Real Estate Agent – The Ultimate Guide) where I compare and contrast the common ways of finding an agent.
A real estate salesperson is someone who has taken a licensing class and passed the real estate salesperson exam. Salesperson’s tend to work with clients in the field.
A real estate broker is a person who has taken an additional class and exam, and has a few years experience in the field. Brokers tend to manage other agents.
A real estate agent is just another term for a broker or salesperson. Both salespersons and brokers help clients buy or sell real estate.
A REALTOR® is a real estate agent who is a member of the National Association of Realtors (NAR). The NAR provides ethical guidelines for their agents. Both agents and brokers can become a REALTOR®, but some choose not to join this trade group. Because there is a trademark on the word realtor, I cannot call myself a realtor, but I can use it in my title. Therefor, I can write Cyrus Karl, REALTOR®.
Some salespersons never choose to become brokers. In fact, many salespersons make far more money than their broker counterparts. To make things more complicated, us insiders generally refer to all licensed salespersons and brokers as brokers or agents.
An off market listing is a home that is not publicly visible. Generally, this means the listing is not on a multiple listing service or third-party site like Zillow.
An off-market listing may be offered at a competitive price, and therefore may not last long. It could also be overpriced. Either way, you will likely want the experience of a real estate agent to guide you through the process of putting in an offer on one.
A bolthole is a secluded residence often used as an escape from a global emergency. A vacation home can be a bolthole, however a bolthole’s primary purpose is to provide shelter in the case of war, famine, plague or another catastrophic event.
An internet buyer, or ibuyer, is generally a company that makes an offer on your home over the internet, sight-unseen and all cash. Some are legitimate, others are not.
A home that is for sale by owner (FSBO) is one in which the owner is not using an agent. In other words, the seller represents themselves in the transaction.
This does not mean a real estate buyer cannot contract their own agent to represent them in the deal: However, many FSBO sellers do not offer a buyer’s agent a commission (as opposed to traditional seller’s agents, which split theirs). Therefore, the buyer and their agent will likely need to negotiate a separate payment structure.
In other words, if you are thinking of making an offer on a FSBO home, you may have to pay your agent their commission on top of the asking price.
I doubt it. Successfully listing your home by yourself is extremely challenging. You have to market your home, negotiate any offers, and have a firm understanding of how the entire process works. Any fumble could cost you money, far more than the savings you achieved by not hiring an agent.
I wrote an article with some tips on For Sale By Owner (FSBO). If you do decide to go down that path, I wish you the best of luck. It can be done, it is just incredibly challenging.
An appraisal is a determination of value of real estate that is calculated by a licensed appraiser. Each state has different requirements and expectations for their appraisers.
By contrast, some agents offer a complimentary comparative market analysis (CMA) or determination of value, which are similar to an appraisal, but usually less in depth. However, unless otherwise noted, real estate agents are not appraisers and the job expectations of each profession are different.
A home inspection is an examination of a home by an inspector. Most states require a home inspector to be licensed.
A home inspector usually makes a home inspection report, noting any issues with the home. Sometimes after an inspection, a buyer may ask to renegotiate or simply walk away from a deal if a major problem with the home is found.
The question usually is in regards to bathrooms, kitchens, etc. It is generally asked by sellers of real estate before going on the market.
Many buyers do not wish to do “work” when buying a new home. Others wish to renovate with their own vision and will simply discount whatever you do. Of course, if you can renovate X, say your bathroom, yourself, you may add more value to your home than it costs to do so.
This is a very tricky question because what one is asking is this: Will a small investment in your home will add to it’s overall value. Here’s a good analogy: Would adding a new set of tires make my car more valuable? To some buyers, perhaps. Others could not care less. Get it?
The best way to answer this question is to talk with a local real estate agent. They will know what buyers are looking for and can help you better understand if your idea is worth pursuing.
No! There is no set fee in real estate, no matter where you are located! Firms are allowed to set their own fee, but they cannot conspire together to form a uniform fee.
Please see this article: Is a 6% Commission Fair? How Much to Pay a Real Estate Agent
The average real estate agent earns just over $50,000 per year. Although this can vary widely. I personally know of real estate agents making upwards of $1,000,000 a year. Use the free real estate agent salary calculator to better estimate how much you can make.
Most real estate agents work for themselves. That means no boss, no 9-5 schedule and no office drama! However, being your own boss (1099 and self-employed) requires a strong work ethic. If you would like to learn how to become an agent, start here (How to Become a Real Estate Agent – The Ultimate Guide).
No! In most states, all you need is a high school diploma or GED.
In fact, many of the most successful agents I have met came into real estate as a second career, having never graduated from college.
Check with your state’s licensing board for more information in regards to licensing requirements.
There are many different ways to structure a commission agreement. One may work as a buyer’s agent, seller’s agent or both. Many agents work commission, meaning that they only get paid when they make a sale.
For example, an agent may represent a buyer in their purchase of a $500,000 colonial home. The seller’s agent offers the listing out (gives the buyer’s agent’s firm) 3% of the sale price for bringing the buyer. That agent’s firm gets $15,000, and if that agent is on a 50/50 commission split (See Negotiating a Split with a Brokerage (50/50, Flat Fee, etc.), the agent will walk away with $7,500. Don’t worry, that is about as math-heavy residential brokerage can get!
Federal anti-trust law prevents real estate firms from charging the same commission split. That means different firms cannot come together and all charge agent’s the same split and fees. Use that information to your advantage when negotiating with a brokerage!
Simply put, a multiple listing service is a database that allows us agents to share listings with each other, as well as view market information. You can almost think of it as a bare-bones social network, where agents can post what they want, but comment on nothing.
Each region has its own MLS. For example, on the MLS in my area, I can see listings in the Greater Boston area, but I cannot see listings in California. If I wanted to see listings there, I would either have to rely on a third-party website (Like Zillow), or call a colleague on the West Coast.
A real estate coach is a paid consultant that will help change an agent’s business. One of the most common goals for an agent that hires a coach is to acquire more leads, although some are simply looking to organize their business or cut down on expenses.
Coaching is very popular in the real estate industry. If you are looking to hire one, check out this article. In it, I provide tips to make sure you find one that will best suit your needs.
A sphere of influence, or farm, is a group of homeowners, or buyers, you wish to target through advertising. Generally speaking, as an agent you will have some sort of former relationship with these people, or the area in which they live.
A client relationship manager (CRM) is a software to help you better organize your marketing. Essentially a CRM helps you you stay on top of marketing towards your sphere of influence. Examples include, Hubspot, Suite CRM, etc.
VagharRealEstate.com is the place to find out how to buy or sell real estate. It is primarily geared towards those looking to buy or sell residential real estate in the United States. Read more about the site on our about page.
Unfortunately, there is no simple answer to this question. Generally, if your rent payment is equal to or greater than a mortgage payment on a similar-sized home, you may be in a good position to buy. Of course, you would need 20% of the total purchase price saved for a down payment (or less with an FHA or VA loan).
Perhaps the best way to determine if you are ready to buy a home is to sit down with a trusted financial advisor, followed by a talk with a loan officer. The advisor will help you determine if buying a home is a good financial decision, and the loan officer will tell you how much home you can afford. Remember, just because you are pre-approved for a home up to $500,000 does not mean you should buy a home for $500,000; doing so may make you a slave to your monthly mortgage payment and stretch your finances thin.
My best advice is to first carefully consider if you actually want to buy a home. Answer important questions, such as:
- If I (or we) buy a home now, do we plan to be there in five years?
- Am I truly interested in being a homeowner?
- What are my other options?
- Do I have a trusted friend or family member who recently purchased a home that I can turn to for advice?
Go from there, and take it slow! Buying a home is a big decision, whether it is a 1-bedroom condo or 26-room villa.
If you do not see your question listed, send it to us.