Below are real estate FAQ (Frequently Asked Questions). As you may know, I am a real estate agent. I update this list from time to time. However, If you want to contribute a question to it, please drop me a line.
If you are looking for more in-depth resources on real estate and financial freedom, check out the resources page. Also, I have linked many articles on this page that further define the answers to the questions in more detail. You can view all of them on the articles page.
For Real Estate Buyers, Sellers and Investors
Below are common questions for those looking to buy or sell real estate.
How can I find a real estate agent to work with?
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.
What is the difference between a real estate salesperson, real estate broker, real estate agent and realtor?
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 salesperson’s make far more money than their broker counterparts. To make things more complicated, us insiders generally refer to all salespersons and brokers as brokers or agents.
What is an off-market listing?
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.
What is a Bolthole?
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.
What is an Ibuyer?
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.
What does “FSBO” mean?
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.
Can You Still Find Success Listing Your Home FSBO?
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 incredible challenging.
For Real Estate Agents
Below are common questions for real estate agents.
How much does a real agent make?
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.
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).
Do you need to go to college to become a real estate agent?
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.
How do real estate agents get paid?
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!
What is a multiple listing service (MLS)?
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 it’s own MLS. For example, on my MLS 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.
What is a Real Estate Coach?
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.