FAQs • Real Estate Lingo
NOTE: There’s a lot of great scattered information here. You can press “Command + F” on your Mac (CTRL + F on PC) and search for keywords.
What’s the difference between a “buyer’s agent” and a “seller’s agent”?
I know, it can be confusing. A “buyers” agent is just a realtor that helps someone find and buy a home. The “sellers” agent is a realtor that helps someone market and sell their home. Without sellers agents, buyers agents can’t exist.
What is a broker in real estate?
The title “broker” can have many different meanings across many different industries. In real estate, “broker” is just the person who is in charge of the realtor’s affiliated firm office. Brokers sometime own and/or manage the local firm office. My broker is James Bunn of Move Home Nashville Inc. He’s a great dude, and we make a great team.
What’s the difference in a real estate realtor, broker, and firm?
Like the above… the realtor is usually the person representing a home buyer or seller (a broker can do this too), the broker is the person in charge of the office- overseeing all agents, and the firm is the real estate company in which the realtors and brokers are apart of.
I thought you were called a Realtor? But your also called an agent? So, what is an agent and what do they do?
Legally on paper, we’re called “special agents”. Kinda like James Bond, but can also mediate home purchases. Not really. “Realtor” is our legal business title in real estate, and “real estate agent” means the same thing. The word “agent” just means that we’re representing a party for a specific purpose.
Ok I understand. So what is the point of a real estate agent?
Great question! Most don’t know. Yes, we help mediate and facilitate home sells and purchases as well as negotiating contracts in ways that most people are unaware. However, the licensing process of all realtors were put into place by law to help protect you and the public from bad real estate deals that can hurt you and the economy financially. The type of bad deals that could lead to another “2008” market collapse. In general, real estate agents help keep the real estate market a healthy place.
Who do you work for?
Well, once we make a representation agreement, I technically work for YOU. For tax purposes, I’m considered self-employee, and contracted by my broker, Move Home Nashville, to practice real estate.
What is the MLS?
The MLS is the ACTUAL local home inventory database. Zillow, Trulia, and others don’t actually have the same inventory data that the MLS has. Listings (home data) originate by all realtors in our private MLS database. From there, some of the data is pulled via syndication into sites like Zillow. Not all data is pulled, not all data is correct, and not all data is up to date. So for a 100% accurate market inventory, trust an actual realtor and the MLS.
I’ve heard some good things and bad things about companies Zillow, Trulia, and Realtor.com. So, what’s up?
Simply put, these sites aren’t real estate websites. They are actually MARKETING websites. The business model for these sites is to pull data via syndication and APIs from actual MLS databases all over the country, then to build a user database (the customer), and sell the customer leads and information to realtors. That’s why, if you’ve ever used these services, your phone starts blowing up from realtors and soon as you submit your information. These sites can be useful for sure, but they do not show a good representation of the market’s inventory.
What’s the difference between a bank and a mortgage lender?
GREAT QUESTION! Both can give you a loan to buy a home, but they are different. Mortgage lenders are people to specialize in giving you a loan for a house, that’s all. The primary and secondary real estate markets are very complicated places and you want to work with people who understand them. I personally highly recommend using a mortgage lender when buying a home over your personal bank. I have great personal relationships with these people who have your best interest at heart. Getting you hooked up with a phenomenal mortgage lender is my first step in getting you closer to buying a home.
What is a conventional loan? I’ve also heard about FHA, USDA, VA, and other loan types. What are those?
There are many different types of loans that you can use to buy a home. Your mortgage lender I hook you up with will help you with this.
• Conventional loans are non-government insured loan. Many times these loans are the best route to go if you are approved for one. Conventional loans carry a PMI (private mortgage insurance) payment packaged in with the mortgage on your home. You pay PMI until you build 20% equity in your home. So this is why it’s really good to put 20% down on a home if you can- you’re not having to pay sometimes hundreds extra every month that doesn’t go to the principle balance of your mortgage. However, many times lower down payments are better and you can do a conventional loan for as little as 5% usually.
• FHA, USDA, & VA loans are all government insured loans. FHA is a loan that carries MIP (mortgage insurance premium) packaged into your mortgage payment. Usually you can get an FHA loan for as little as 3% down. USDA is a similar loan, but covers home purchases in rural areas. If both income and location requirements are met, many times you can buy a home for 0%. VA loans are special loans for military vets.
Who the heck is “Ernest”? And what is escrow?
So ernest is not a person. Instead, it’s money. Earnest money is a payment you’ll pay upfront for the purchase of a home. On a new build, it can be $5000 – $10000. On a resale home, it can be anywhere from $500 – $5000. By paying this money upfront, you’re showing the sellers (or builders) that you’re serious about making contract on the home. From there, the contract process moves forward. This “earnest” money is not spent, but held in a special “escrow” or “trust” account and applied to your downpayment through the lending process.
What are closing costs? How much are they?
Closing costs are costs related to selling or buying a home. Application fees, discount points, and other fees will need to be paid to the lender for the creation of a mortgage loan. Closing costs can be around 3% of a homes purchase price. Many times you’re looking at $7000-$9000 in closing costs on a home. These costs and who pays them are negotiated during the buying/selling process and written into the contact agreement.
How much overall cash do I need to buy a house?
It depends on what type of loan you qualify for. For a typical 5% down conventional loan, you’ll need 5% of the sale price upfront along with enough cash for earnest money upfront. You’ll also need to have the cash negotiated for closing costs to your lender. I’d also recommend having at least $10,000 in reserve cash after you’ve bought the home. It’s great to save, and it’s great to make big down payments on a home, but you don’t want to be house broke once your own the home 😉
How much overall equity do I need to sell my house?
In Nashville, the market is good, so most folks have positive equity. I would say in general, you at least want 8-10% of equity in your home to just sell it. This will cover marketing & selling costs, with some left over to help out with a down payment on another home if you’re planning to buy again. This isn’t considering the available cash you already may have saved. In general, you just want to make sure you DON’T have negative equity in your home as it will be expensive to sell.
Helping me find and buy a home is free? So how do you get paid for what you do?
Yes! If I help you buy a home, the representation doesn’t cost you a dime. Sellers want to SELL their homes, so they use equity in their homes to market their homes for it to sale. This is done by paying a “seller’s agent” to market the home and a “buyer’s agent” to bring a buyer (you) to the home via the marketing by the seller’s agent. So as a buyers agent, we’re paid commissions from the earnings of the seller of the home. So even though I’m technically employed by you under contract to help you find and buy a home, you don’t pay me anything!
What is a CMA?
CMA stands for comparable market analysis. This means that a real estate agent will look at home values and specs in a particular area to determine an approximate selling price, or “market value”, for your home to list for sell. Once under contract, the buyer’s lender will have a professional appraisal done on the home to determine the lending value of the home.
So you handle and negotiate contracts, are you some type of lawyer?
No, absolutely not. We actually have state commission lawyers we work with to write the contracts to make sure they are perfect. However, as licensed agents, we do have the ability to write in agreements into these contracts, then present them to sellers.
I’m looking for a new build, can I just buy a home I see by walking into a model home? Do I need an agent then?
You can definitely buy a new build home without representation from an agent. But I do not recommend it. A builders listing agent does not represent you. They represent the builder. Even though most people in the business want everyone to win in a home buying process, you’ll still want personal representation on your side to mediate the process and help you make sure everything is done to your liking.
So you can help me find and buy the perfect home. Can you also help me sell my home, then buy another?
Absolutely. That’s what I do best. I personally specialize in marketing your home for selling. Any marketing you see (videos, photos, etc.) from me, or on this website, is produced by yours truly. I personally take heart in giving your home the best marketing available for the fastest turn around possible.
What about commercial real estate? Do you do that too?
Yes. Residential real estate is done in larger quantity but I absolutely get involved with commercial.
I’m just looking to by my next investment property to rent out. Can you help?
Yes. Let’s get started. I show you some immediate properties popular for renting out, and also sending you email lists as long as you need of great homes to rent out or flip.
I’m moving to another state, can you help me find a home there?
Sure can. Real estate is big in referrals. I have great people I’ve connected with everywhere that are eager to serve you as well as I can, even if I can handle the contract for that state.
Whats the difference between an “appraiser” and an “inspector”?
Great question. An appraiser is someone who is licensed by the state to give a professional opinion of market value for the selling of a home. An inspector is someone who does an evaluation of a home for selling to determine structural integrity of the home. If problems are found, like a crack in a wall, they’ll have to be fixed before the home can sell.
What the heck is radon?
Radon is a natural gas that comes up from the earths crust, under homes. High levels of radon can be harmful to the occupants of the house. Levels of 4 pCi/L or higher are considered hazardous. If this is the case, the radon will have to be remediated by installed proper radon ventilation under the home before selling.
Can you help me find homes that I can’t find on other sites?
Yes. Realtors use a local MLS database of everything currently active. All inventory, listings, data, everything, starts with our MLS. Many times you’ll find old data, wrong prices, or will not find anything at all on these 3rd party sites.
How did you get into the real estate business?
I’ve always been amazed by both real estate, and the stock market. I thought these two businesses were awesome ways to make and invest money. I’ve had a passion for real estate since I was very young. I have family on other sides who are in real estate, and my wife also does real estate with me.
What else do you do?
Fly drones! I’m a uSUS licensed drone pilot. You’ll see a lot of that footage in my marketing. I also do marketing, multimedia producing, web design, all in real estate and for other businesses. I love music. I’m a musician and used to tour professionally, produce, and write songs. I love to write in general. I love to learn more than anything. I’m very much into physics and astronomy. Great films are a favorite as well. Great coffee and amazing beer is a must have in life.
Can we be friends once the deal is done?
No… I’m actually asking you?!?! Can we? Ha. Yes of course. I make it a priority to build a great trusting relationship with you. Gaining business is great and part of building a good economy and all… but making a new friend is better. Trust me, we’ll be hanging out plenty.