10 Frequently Asked Questions About Real Estate
As a Realtor, I get asked a ton of questions. I compiled a list of the top 10 most frequently asked real estate questions and my answers. (Disclaimer: These answers are my personal answers. Different agents and different areas may require different things.)
- How do you (the Realtor) get paid?
In most cases, Sellers will pay a commission to the Listing Broker. That Listing Broker will offer compensation to a Buyer’s Agent. Therefore, as a Buyer, you do not owe a commission for the work a Realtor does for you. In cases of For Sale by Owner properties, some Sellers choose not to offer a commission to an agent. In those cases, a Buyer would be responsible for the Realtor’s fee. Realtors generally don’t get paid unless a closing takes place so all their expenses are paid by them up front and they only get reimbursed and/or paid if someone buys or sells a property. Some people have thought that I receive a salary and that I am reimbursed for my expenses. Most Realtors do a lot of work before ever getting paid and sometimes we don’t get paid at all.
- Can I be at the home inspection?
If you are a Buyer – absolutely. You might want to give the inspector some time to inspect before you get there so he doesn’t get distracted. Getting there for the last 20-30 minutes of the inspection is a good idea so the inspector can walk you around and let you ask any questions you may have about what he found.
If you are a Seller – stay away! You may have legal liability to disclose anything you know the inspector finds. Talk to your agent, but typically you do not want to know more than you need to. If you are concerned about security, ask that the Buyer’s agent be at the inspection and/or make sure the inspector is licensed and insured.
- Do I need to be at the appraisal?
No. Appraisals typically take less than 30 minutes. Your Realtor may decide to be in attendance to let the appraiser in and/or give them some comparables, particularly if the property is unique but it is not necessary for you, as the Buyer or Seller, to attend. If you are the Seller, however, you may be at the property if you so choose. You may give the appraiser a list of improvements of the property to help the appraised value.
- How long does closing take?
If you are the Seller, generally, you have very few documents to sign so your closing is about 30 minutes or less. If you are a Buyer paying cash, your closing will be very short as well. If you are a Buyer who is getting a loan, plan to sign papers for almost an hour.
- Why do I have to be pre-approved?
If you are in a Seller’s market, your offer may not even be considered if you do not send a pre-approval letter with your offer. More than that, however, I have had clients that had no idea they had items on their credit report or in their recent past that would hinder them in the home buying process. You do not want to waste your time or be heartbroken when you find out that you have fallen in love with a house that you cannot buy. It’s best for everyone to get pre-approved before you go look at houses.
- How much are closing costs?
That depends on several factors, however, in general, if the purchase price is $200,000 or less, closing costs for a Buyer getting a loan will be about 3% of that purchase price. As the purchase price increases, the percentage decreases. Best rule of thumb – talk to your lender. If you are a Buyer paying cash or a Seller, your closing costs will be minimal – typically your portion of the taxes, and attorney’s fees.
- Should I get a home warranty?
I always recommend it for Buyers. You don’t know if you’re going to need it. Most people have thought about how much they pay in health or car insurance. And we may not think we need it, until we have a claim. Those claims are never expected. It’s the same with a home warranty. You may be fine without it, but you may wish you had it if you choose not to buy it. In most cases, it is a negotiable item that the Seller may pay for. As for Sellers, I put a home warranty on the property for the duration of the listing as a courtesy to my client. The last thing you want to deal with while you are trying to sell your house, pack up, and move, is a repair that may be covered by a home warranty.
- Do you do open houses?
The short answer is sometimes. Check out this blog to get the full answer. Not all properties and not all Sellers are the right candidate for an open house.
- What is title insurance and who pays for it?
Chad Pearman, P.C. helped answer this question in this blog. In summary, title insurance protects the Buyer and/or the Lender from defects on the title to the property. In our area, either the Buyer or the Seller can pay for it. It is a point of negotiation.
- Which real estate search tool is best?
Well I am glad you asked! Check out our awesome app. It is updated from our local MLS so it has the same information that agents see, including whether or not a property is under contract or pending. You can download our Home Scout app on your phone using our VIP code (6157307050) or click this link.
Michelle Froedge is a residential Realtor and Principal Broker in the Greater Nashville and Williamson County areas of Tennessee. “Mom” to four-legged fur babies, Tyler and Livvie, Auntie to Zelamie, she is a vegetarian and sings in her spare time. Michelle has lived in Nashville and Franklin since 1997 and has been selling homes since 2004.