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1. What is the difference between a real estate agent and a real estate broker?

2. Why should I use a real estate salesperson?

3. I have a family friend who is a Realtor. She suggested a price for my home for that seems too low. Another agent suggested a price more in line with my expectations. Who do I choose?

4. 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?

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

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

7. 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

8. My home has been listed with an agent for over three months and I’m not happy. What options do I have?

9. I signed a listing agreement, but am having second thoughts about selling. How do I cancel and will it cost me anything?

10. Just listed with a realtor for 3 months but decided I would like to change to another. Is that allowed or legal?

11. I have to make a choice between an updated home in an older neighborhood or a newer home in a more modern neighborhood. The home in the older neighborhood has almost everything I want and is much larger, but which makes the most sense as an investment?

12. When buying a new home, what upgrades should we go for? What holds the most value? Do we upgrade the lot? Pick more square footage in the house? Add an extra bedroom?, etc.

13. I need to buy a house with a good resale value. How do I determine if my house will increase in value within the next five years so that we can upgrade? I can buy a smaller house in a great location or get twice as much house in a good location. Which

14. My house recently went into escrow that was supposed to last 60 days. One week before closing we were notified by the real estate agent that the house did not appraise for the amount agreed upon in the sales contract. The buyers are refusing to obtain ano

15. We were set to close and the seller now wants to set up new closing date. Can i get them to come down off the price of the house and anything else you think that would help me?

16. The seller is unable to find a replacement property by the time the sixty day escrow closes. They have requested an extension of thirty days. If we do not agree to that extension, will we lose the appraisal fee, the home inspection fee, and our deposit?

17. One hour before closing i signed an addendum to remove tires from the property. There were about 6 to 8tires that i had removed. Mysteriously, about 30 tires have appeared on the property. Am i responsible for their removal? I have witnesses that can stat

18. I have a contract to purchase a house, but the three owners are having a "family feud" and cannot agree on anything. The sale of my own house closes soon and the lock-in on my loan is up in a few days. What can I do?

19. I agreed to buy a house and now I’ve changed my mind. How do I cancel?

20. The buyer now wants out of the contract to buy my home. The contract has been signed by both parties. What are my rights, and do I have to keep my home?

21. My husband and I have already signed a contract to sell our home. However, we have since changed our minds and no longer want to sell. Can we get out of selling our home?

22. When buying a home, if there has been flooding that results in damage and it has not been fixed, must that be disclosed to the buyer? Does this need to be disclosed if 1. The buyer does not ask about flooding. 2. the Buyer does ask about flooding?

23. If the real estate agent representing the Buyer knows of a flooding problem, must they disclose this information to the buyer? Is it unethical if they do not?

24. What are the terms of the pest inspection? If after a few years you are living in the home, are the sellers responsible if termites are found?

25. What should I be aware of that the house inspector should be doing during the inspection of the house I am interested in buying?

26. I am interested in buying a home which the seller is listed "as is." Will a bank require a home inspection before approving a loan? Will a bank approve a loan on a home needing repairs?

27. What, precisely, can be claimed as a tax deduction when you buy a home?

28. How can I find out how much my house is worth? There are no comparable homes in my area.

29. Where can I get information about the asking prices of properties that have sold during the last six months? I have found information on the selling prices, and would like to compare them to the asking prices.

30. How do you know whether the price of a home per square foot is reasonable or if you are about to make a bad decision?

1 . 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.

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.

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3 . I have a family friend who is a Realtor. She suggested a price for my home for that seems too low. Another agent suggested a price more in line with my expectations. Who do I choose?

You might want to consult a couple more Realtors on the market value of your home. Most of the estimates should be in the same ballpark. It could be that your friend is being more honest with you about the value of your home and the other Realtor gave you a higher number because he already knew you expected it. This is called "Buying a Listing" and is the subject of an article on our web site (click here). Or it could simply be that your friend is a good friend, but not that great of a real estate agent. Mixing business and friendships is always risky to the friendship. On the other hand, if your friend is truly competent and was providing wise advice, she may be offended if you ignore the advice and choose another agent.

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4 . 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?

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.

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5 . 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. Like a Realtor I once knew said, "No matter how it is set up, the buyer still walks away with the house and the seller still walks away with 94% of the purchase price."

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

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, he may 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 his 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.

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7 . 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

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.

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8 . My home has been listed with an agent for over three months and I’m not happy. What options do I have?

All listing contracts have expiration dates. When is yours? If it is not coming up soon, tell the agent and/or his manager that you want to cancel your listing. Often they will let you cancel easily, since they do not want to build ill will in the community. If they won't, you can always pull your home off the market until the listing contract expires. You might want to read "Five Reasons Your House Hasn't Sold."

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9 . I signed a listing agreement, but am having second thoughts about selling. How do I cancel and will it cost me anything?

It should be pretty simple. Just tell the agent you have changed your mind and decided not to sell after all. Since your cooperation is required to sell the house, most agents won't give a hard time about canceling. Their hope is that when you later do decide to sell, you will get back in touch with them. However, if you attempt to put it back on the market during the contracted listing period using another agent, your original agent will attempt to enforce their contract.

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10 . Just listed with a realtor for 3 months but decided I would like to change to another. Is that allowed or legal?

Since you have a contract for 90 days, you would have to get your agent's permission to be released from the contract so you can go with the other agent. Most of the time they will attempt to dissuade you from making the change, but will release you because they don't want to engender any bad will. The agent will be reluctant of course, especially since you just "changed your mind," and cannot point to any lack of performance problems with your present agent. The agent can refuse to release you from the listing agreement and there are various reasons they may do so. In that case, you're either stuck or you have to simply take your home off the market for the rest of the listing period.

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11 . I have to make a choice between an updated home in an older neighborhood or a newer home in a more modern neighborhood. The home in the older neighborhood has almost everything I want and is much larger, but which makes the most sense as an investment?

If your goal is to buy a home for it's resale value and the one you are thinking of buying in the older neighborhood is at the upper end of values for that neighborhood, then it may not be the wisest choice. If it is similar or lower in price to the others, then there should be no problem, because pricing should be considered in relation to the local neighborhood and not compared to homes in other neighborhoods (for the most part) Plus, is it a neighborhood on the decline, or are others going to be fixing things up, too, so that it is a neighborhood that is improving? It could turn out to be a very good deal as long as you don't "overpay" because of the recent improvements. Remember that you also buy a home for it's value to you as a "home," and that is something else you should consider. Which neighborhood would you AND your family feel most comfortable in? For general information on buying a home for its resale value, click here.

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12 . When buying a new home, what upgrades should we go for? What holds the most value? Do we upgrade the lot? Pick more square footage in the house? Add an extra bedroom?, etc.

A lot depends on why you are buying the house. Are you buying it mostly as a home or mostly as an investment? There is a difference. For the most part, upgrades are high-profit items for builders. They aren't designed to enhance the value of the house, but make you happier with the house you do buy. If you are looking at your home as an investment, then you buy from the smaller to medium size in the tract and spend only a minimal amount on upgrades. If you are looking at your purchase as a home, then you select upgrades that will enhance your quality of living. One rule of thumb is to always upgrade the carpet and padding. For specific information on what to look for in a house when resale value is a consideration.

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13 . I need to buy a house with a good resale value. How do I determine if my house will increase in value within the next five years so that we can upgrade? I can buy a smaller house in a great location or get twice as much house in a good location. Which

It's like buying stocks. How do you really know which ones will increase most in value over the next five years? As with any investment, there are risks. The most often quoted rule is that location is the most important factor. You want to make sure that the house does not back to busy streets and is as close to the interior of the tract as possible. Avoid corners and intersections. Choose the middle of the block or a cul de sac. You'll want to be sure it has at least two bathrooms (if you are buying in an older area). Sometimes it is just timing that works out best for you. For example, if you buy a home before a major surge in local prices.

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14 . My house recently went into escrow that was supposed to last 60 days. One week before closing we were notified by the real estate agent that the house did not appraise for the amount agreed upon in the sales contract. The buyers are refusing to obtain ano

First, look at your purchase contract. Most Realtors put deadlines in the contract during which certain things must occur, such as appraisal or loan approval. Review the contract to see if they lived up to those types of terms in the contract. Second, press to find out why it took 55 days to get an appraisal. This just seems wrong. Request the name and phone number of the appraiser so your agent can make inquiries. You’re probably not being given the true reason for cancellation. Escrow normally cannot release the deposit money without the permission of both sides. Continue to press until you feel you are being given the real reasons for not closing the transaction. Keep in mind that if you are asking for legal advice, that can only be obtained from a lawyer.

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15 . We were set to close and the seller now wants to set up new closing date. Can i get them to come down off the price of the house and anything else you think that would help me?

The seller may have had legitimate reasons or perhaps not. You can attempt to renegotiate the price if you choose to, and this can be looked at several ways. Once you make your offer to purchase the house at a lower price, this can be looked at as a new offer, which can nullify your original offer. Most likely, you are going to just have to decide whether you like the house enough to go ahead with the purchase.

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16 . The seller is unable to find a replacement property by the time the sixty day escrow closes. They have requested an extension of thirty days. If we do not agree to that extension, will we lose the appraisal fee, the home inspection fee, and our deposit?

If you agree to a contract extension, put conditions on it. Give them a certain number of days to find a home and make an offer.. If they do not, then get them to pay the escrow cancellation fees and compensate you for appraisal, home inspection, etc. You'll probably get your deposit back, minus a small cancellation fee. However, the appraisal and home inspection have been done and those guys don't work for free, so that money is gone. Since both the appraisal and home inspection were done for that specific property, if you choose not to extend and buy a different property you will have to pay those fees again. Suggestion: Do you want to extend and wait around another thirty days and find the seller still has not purchased something? Remember in your purchase contract that you had time conditions placed upon you. For example, it may have been two days to apply for a loan, seven days to review the disclosures, fourteen days to get a home inspection, and so on.

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17 . One hour before closing i signed an addendum to remove tires from the property. There were about 6 to 8tires that i had removed. Mysteriously, about 30 tires have appeared on the property. Am i responsible for their removal? I have witnesses that can stat

It just goes to show you how crazy real estate can be, doesn't it? Most real estate contracts detail exactly when you are to turn over possession of the property to the seller. Turning over possession usually occurs sometime after the transaction actually closes. Often this is three days after closing. If the tires showed up before the transfer of the property (as stated in the contract), you should probably remove the tires.

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18 . I have a contract to purchase a house, but the three owners are having a "family feud" and cannot agree on anything. The sale of my own house closes soon and the lock-in on my loan is up in a few days. What can I do?

You may have to rent a motel or move in with friends or family until the issue is resolved. There is risk in buying real estate, especially when you make your own moving plans very firm. No one can guarantee a sale will close on an exact day because situations can come up unexpectedly, just as it happened to you. Fortunately (June 2000) rates have declined since you locked in your interest rate. Most lenders will extend a lock (once it expires) at the higher of the current market rate or the rate you originally locked the loan. So most likely, you will not be hurting any on your interest rate because of the delay. In short, you're pretty much stuck and you have to hope the sellers can work out their problems.

This may not be the answer you were expecting.... For the answer to this, you have to look at your contract. The contract is the legal agreement you have made with the seller. Most contracts have certain contingencies where a cancellation is acceptable. To cancel for reasons other than that, there are often consequences and such a decision should not be taken lightly. Keep in mind that while you have been preparing to close the transaction, the seller has taken his home off the market and may have entered his own contract to purchase a home. This can create a chain of sales and purchases, all depending on you to fulfill your obligation. If you do not fulfill the contract, your decision may affect many more people than just one seller. For the legal consequences of canceling a contract, you may have to consult an attorney.

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20 . The buyer now wants out of the contract to buy my home. The contract has been signed by both parties. What are my rights, and do I have to keep my home?

When people break contracts, you can't generally force them to go through with the transaction. What you can do, if you can prove damages, is try to recover the damages in court or through arbitration. You can attempt to talk to the buyers and find out what the problem is and try to resolve it. It may be something easily you can easily resolve, but maybe not.

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21 . My husband and I have already signed a contract to sell our home. However, we have since changed our minds and no longer want to sell. Can we get out of selling our home?

First, look at the contract and see if there are any contingencies that allow you out of the contract. You can always decide not to sell. You just don't know exactly what the buyer's reactions are going to be. You don’t know if they will attempt to enforce the contract. You don’t know if there will be legal repercussions. You might want to get an attorney's opinion at some point, since we do not provide legal advice. If you do cancel, think about ways to soften the blow to the potential buyer who has put up an earnest money deposit, may have already paid for a credit report and appraisal, and may be charged a cancellation fee by the settlement agent. They may have already given notice (if they rent) or sold their own house, too. If you reimburse them for some of their hard costs, maybe they will not try to enforce the contract.

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22 . When buying a home, if there has been flooding that results in damage and it has not been fixed, must that be disclosed to the buyer? Does this need to be disclosed if 1. The buyer does not ask about flooding. 2. the Buyer does ask about flooding?

Disclosure rules vary from state to state, but most require the seller to disclose any problems he knows about. However, the rules on disclosure vary according to whether the seller is an individual or a bank, and whether they are represented by an agent or not. Rules on disclosure are not as strict for bank-owned properties and FSBO's. If you received a "Transfer Disclosure Statement" from the seller, then you probably live in a state that requires disclosure. Go back through your documents and see if you have such a form. Whether the buyer asks about flooding should be immaterial - if a seller knows about a problem, they should disclose it.

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23 . If the real estate agent representing the Buyer knows of a flooding problem, must they disclose this information to the buyer? Is it unethical if they do not?

Real estate agents are not going to be as familiar with a property as the seller. If you received a Transfer Disclosure Statement and either the listing agent or the selling agent knew of a problem not listed by the seller, they should have added it to the form. It is generally required that they do so. However, they may not have known - and they cannot disclose problems they don't know about or that were concealed by the seller. In addition, there are several safeguards that should help you determine if there was water damage or not - termite inspections often point out areas of wood rot caused by water damage - almost all Realtors recommend that a buyer order his own professional home inspection by a professional - and if there was roof damage, an appraiser sometimes can point that out in the appraisal - though it is not their job to perform a full inspection.

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24 . What are the terms of the pest inspection? If after a few years you are living in the home, are the sellers responsible if termites are found?

Assuming you had a pest inspection performed when you bought the house, the terms of the guarantee would be with the pest inspection. You will probably find it with your other documents from when you bought the house. Expecting the seller to be responsible for something a couple of years after the fact is not really sensible. The only way a seller should be liable is if they knew of an infestation, but did not disclose it.

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25 . What should I be aware of that the house inspector should be doing during the inspection of the house I am interested in buying?

The Inspector should be checking the following things: Drainage Foundation Roof & Water Leaks Paint Plumbing Wiring Heating Fireplace Tile

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26 . I am interested in buying a home which the seller is listed "as is." Will a bank require a home inspection before approving a loan? Will a bank approve a loan on a home needing repairs?

A bank doesn't require you to get a home inspection in order to obtain a mortgage. If there are obvious major problems that affect value, the appraiser may note it in the appraisal report. However, their job is not to inspect the home, just to determine value. Although the bank doesn't require a home inspection, if your purchase contract mentions a termite report, the lender will require that to be performed and pass before you close. A termite report lists more than pest infestations. It also mentions obvious structural defects, such as wood rot, etc. These are classified into two groups - category 1 and 2. All items in category 1 must be repaired prior to closing. However, the lender does not stipulate who must pay for those repairs

This is really a question you should ask a local CPA or whoever does your taxes. We encourage you to follow up with a professional tax advisor as we are not qualified or authorized to give advice in two areas - legal matters and tax matters. Briefly put, providing you itemize deductions, own and occupy the home, you can deduct both property taxes paid on the home and interest paid on your mortgage. You can deduct the points and prepaid interest you make during the actual purchase, whether you pay them or the seller pays them on your behalf. There are certain limits and restrictions which do not affect most people, but this is another reason you should contact a tax professional regarding your question.

This may be a bad sign for you, especially if you think your house is worth more than other houses in your neighborhood. Homes maintain their value better if the neighboring properties are fairly similar. In your situation, you may actually have to talk to several Realtors, get their opinions, and come up with some sort of consensus. Without knowing why there are no comparable properties in your area it is difficult to give another suggestion. If your lot or home is over-improved for the area, that means the value will most not likely be what you think it is. If your home is much larger, you might not get the same cost per square foot as other homes in the area. So I would talk to a bunch of Realtors and get their opinions. I would not recommend hiring an appraiser, however, even though a lot of books recommend this. Appraisers are better at "justifying" a price than in determining market value.

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29 . Where can I get information about the asking prices of properties that have sold during the last six months? I have found information on the selling prices, and would like to compare them to the asking prices.

The only place I can think of where you can obtain that information is the Multiple Listing Service. For that, you need to be a member, but you could ask an agent to obtain the information for you. I cannot think of any reason why an agent would not be willing to give you that information, so just ask one. There really is not a concrete value in knowing the asking prices. There are different strategies in developing an asking price, plus a lot of properties start out over-priced to begin with. Comparing properly priced houses to over-priced houses, then lumping them together in some sort of analysis would skew your figures. I can see how you could intend to use such knowledge for the purposes of negotiation, but with an informed listing agent, it should be a fairly ineffective strategy. For example, recently I saw a web site where the agent was hawking his ability as a listing agent. He said the average home in his area sold for 93% of asking price, but his average listing sold for 97% of asking price. The implication was that he got more money for his sellers. The truth is probably just that he priced his homes correctly to begin with.

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30 . How do you know whether the price of a home per square foot is reasonable or if you are about to make a bad decision?

Though this seems like an easy question, it is not as simple as it sounds. Keep in mind that much more goes into the market value of a house than it’s square footage. For example, two houses next door to each other can have the same square footage, but if one has two bathrooms and the other has only one, guess which one will probably be worth more? It will also cost more per square foot. However, if you compare recent sales of similar homes, the cost per square foot should be similar to those properties. You can ask your agent to provide you with comparable sales data.