Real Estate FAQ and Essentials

Real Estate FAQ and Essentials

Welcome to our FAQ page. In this guide, we’ll cover a number of commonly asked questions about real estate terminology, as well as the real estate process in general.

Here’s what we’re going to be covering. It’s divided into three parts, general questions, key points for buyers, and key points for sellers:

General

For Buyers

For Sellers

General


What Does a Real Estate Agent Do – A real estate agent represents their client during the process of buying or selling a home.

They help buyers find homes, and they help sellers put their property up on the market. They help clients understand the market and negotiate to get the best deal, while also navigating the logistics of the transaction.

How To Pick a Good Real Estate Agent – There are many real estate agents out there and they will all want to do business with you. But which one do you pick?

It’s always a good idea to look at who’s out there, read their reviews, see their internet and social media presence and take in all that information when making a decision.

Once you’re getting close to taking action, try calling one or more agents that look good to you and see if the conversation feels right and if they seem like they fit and understand your needs.

What to Watch Out for When Picking a Real Estate Agent – It’s important to watch out for red flags when picking a real estate agent.

Similar to the point above, pay attention to reviews, online presence, and how the conversation goes if you decide to call or meet with them.

It’s important to trust your gut and take the time you need when making a decision. And of course, be on the lookout for high pressure sales tactics.

How Much Does a Real Estate Agent Cost – When buying a home, working with a real estate agent is actually free. The cost of the transaction is paid for by the seller of the home.

When selling, the typical commission rate is 4% of the selling price, or in some cases as high as 6%. This pays both the agent representing the seller as well as the agent representing the buyer.

If you’ve sold your home and are now looking for a new place to buy, that part of the process is free since the fee for buying is paid for by the person you are buying the home from.

How Do Real Estate Agents Get Paid – Real estate agents get paid a percent commission off of the price that the home sells at. The person selling their home is the one that pays the agent’s commission and buyers typically get to work with an agent for free. Agents only get paid when and if the transaction successfully completes.

What is the MLS – MLS stands for Multiple Listing Service. It’s a database where realtors submit their properties so that they can be shared among all agents within the area.

It includes the address of the property, the price, and its details. Homes currently for sale on the MLS are also available to the public via real estate websites.

While the vast majority of homes for sale are listed on the MLS, not every single property makes it onto the MLS. Some homes are sold privately without an agent, or are sold with an agent without being listed on the MLS.

What is the Difference Between a Brokerage and a Real Estate Agent – A real estate agent is the agent helping you with buying or selling a home. Agents can work alone or in teams.

A brokerage is a company that the agent or team belongs to. Brokerages have the responsibility of making sure agents stay up to date and adhere to real estate regulations. By law, all agents need to belong to one brokerage.

For Buyers


How Do You Buy a House – In simple terms, buying a house can be broken down into these stages: understanding what you want and need, finding a mortgage professional and securing a pre-approval, finding a real estate agent to work with, finding homes that seem like good prospects, viewing homes, putting in an offer, if offer is accepted you have successfully bought the house, once the transaction closes you get to move in (usually 90 days)

Should You Use a Real Estate Agent When Buying a House – It’s always a good idea to use a real estate agent when buying a new home.

They help you find properties that fit your needs, book and coordinate viewings for you, negotiate the transaction on your behalf, and help navigate the logistics of the transaction.

Best of all, when you’re buying a home, working with an agent is free.

How Do You Book a Viewing to See a House for Sale – Simply ask your agent to book a viewing for you and meet them there.

Should You Buy a House Using the Seller’s Real Estate Agent – It’s not uncommon that the agent hired by the seller takes care of the needs of both the buyer and the seller (instead of the buyer coming in with their own agent).

In general, that is still ok, however, we always recommend buyers work with an agent that is dedicated to them, as opposed to the seller’s agent handling both sides of the transaction.

This is because agents have the duty to represent and work for their client, meaning that they are working for you.

If the seller’s agent is handling the transaction, depending on the agreement you sign with them, they may only be looking out for the seller’s best interest.

Should You Buy a House Using the Agent You Met at The Open House – People very often run into real estate agents at open houses, as they’re looking around and seeing what’s out there.

If you’re looking to buy a home you saw at an open house, there isn’t anything wrong with using the agent you ran into, however it’s very important to keep in mind that this agent is working for the seller, not for you.

Agents represent their clients and have a responsibility to fight for their best interest. By not having an agent of your own, you might be missing out on the best possible deal.

It’s always a good idea to be represented by an agent if you’re buying a home.

How Long Does it Take to Buy a House – From the time an offer is accepted, it usually takes 90 days for the transaction to complete, giving the seller time to find a new home and to move out.

In some cases, depending on the situation, some homes are available as quickly as 30 days or even immediately.

On top of this timeline, you should also add the time it takes to search for your ideal home and the time spent viewing properties.

Depending on what you’re looking for, this can be as quick as 1-2 weeks, or it can take up to a month or more.

How Do You Get a Mortgage for a House – You can speak with any mortgage professional, they will assess and see how much of a loan you can qualify for, and if everything is good, they will make arrangements for you to have a mortgage for your home purchase.

What is a Pre-Approval for a Mortgage – When working with a mortgage broker, it’s possible for them to give you a ballpark estimate of what you can be approved for. This is very helpful in knowing what your budget is when buying a home.

What is an Offer on a Home (And How Does it Work) – If you want to buy a home, you can put in an offer to buy it. You can ask your agent to put together the paperwork, which when completed is sent over to the seller and their agent.

The offer documents outline the price you’re offering (which could be the asking price, a higher price, or a lower one), and any conditions you might want to add.

Putting in an offer doesn’t guarantee that you will be able to purchase the home. The offer needs to be accepted by the seller. It can be accepted, rejected, modified, or returned as a counter offer with a higher price.

When putting in an offer, you will need to have a cash deposit ready. The deposit is due upon the offer being accepted.

Once accepted, offers become legally binding contracts and neither the buyer nor the seller can back out of the transaction.

How Do You Submit an Offer to Buy a Property – If you want to put in an offer on a property, you can let your agent know to prepare the paperwork.

You’ll discuss with your agent what price to offer and if any conditions are needed. Once the offer documents are signed, your agent will send it to the seller’s agent.

You will also need to have your deposit ready for when your offer gets accepted.

What’s the Difference Between Condo and Freehold – What differentiates condos from freehold properties is the fact that condominiums have common elements which need to be managed and maintained.

If you think about an apartment building or a townhome complex, there are common areas and amenities used by all residents, which don’t belong directly to any specific person.

These are managed by a condo corporation, which takes responsibility for maintenance. Living in a condominium (either apartment or townhouse) means you get to enjoy these amenities, but you also will have to pay condo fees and follow the condo corporation’s rules.

What is a Multiple Offer Situation – A multiple offer situation is when multiple different buyers want to buy the same home. This leads to a competitive scenario where they bid higher and higher in hopes of securing the purchase.

A multiple offer situation can happen on its own, if more than one buyer happens to show interest, or it can be an organized bidding competition by the seller. Sometimes, the seller and their agent may set a date in the future to review offers from all those interested.

The fact that the review date is in the future means that a number of different offers may be collected during that time.

What is a Backup Offer (And Should You Put One In) – When facing a multiple offer scenario, you usually get the chance to revise your offer and increase your bid (and/or drop conditions).

If that does not work for you, you can still leave your offer on the table as it is (even if you know you are not the highest bidder).

The reasoning behind this strategy is that sometimes the seller’s highest offer might not go through or might not be accepted, meaning that you still have some chance to get the home with your initial offer. It’s not a guarantee but it’s worth a shot to try.

When doing this, it’s critical that you wait to see what the seller says (accept or reject) before moving on and trying to put an offer on another property. You shouldn’t have offers in on more than one home at a time.

Can You Put Offers on More Than One Home – You should only put one offer on one property at a time.

Once an offer is accepted, it becomes a binding contract and you are legally obligated to buy the home. If you put in several offers on different homes at the same time, you may end up in a scenario where you have to buy multiple homes.

Can You Put Conditions on Your Offer to Buy a House – Yes. It’s possible to put a number of conditions on your offer, such as getting a home inspection, getting approved for a mortgage, selling your current home, and more.

Conditions are useful because it means that if things don’t work out the way you need them to, you’re not going to be locked into an offer.

That being said, offers with conditions attached are less appealing to the seller than unconditional ones.

In a competitive environment, this can affect your chances of having your offer accepted, so it can be a double edged sword.

Should You Get a Home Inspection When Buying a House – This depends on the situation.

On one hand, having a home inspection done definitely helps you get a clearer picture of what you’re buying.

On the other hand, an inspection condition can delay the offer acceptance and make the offer seem less of a secure deal for the seller. In a competitive environment, this might work to your disadvantage.

In some cases, some properties will have already had a home inspection done by the seller, so you can ask for the report when viewing the property.

Can You Back Out of Buying a House After Making an Offer – No. Once an offer is accepted, it becomes a legally binding contract and you will have to buy that property.

How to Win a Bidding War on a House – Bidding wars can pose a stressful challenge for buyers. Some of the key points for succeeding in a bidding war are: start by being pre-approved for your mortgage and knowing how much you can spend, look for homes that realistically fit your budget, offer a price to the seller that is realistic for market conditions and the amount of competition, if possible avoid adding conditions to the offer, if the situation is competitive, be prepared to offer more, and lastly – follow the guidance of your realtor.

How To Find an Affordable House – Being savvy and effective in your search are key if you want to find an affordable home in a competitive market.

Some important points include: get pre-approved for a mortgage so you know how much you can afford, shop within your budget, keep your expectations realistic (no home is perfect), be flexible and open minded, listen to the guidance of your realtor.

Time to action is also a critical factor. Homes can sell very quickly, and especially if a rare gem comes up on the market, it’s not likely to last long.

It’s important to keep a close eye on the market, see what’s coming up, and take action as soon as a good prospect appears. A real estate agent will help you with all of these, which can make a huge difference in your chances of finding and successfully buying an affordable home.

Why Do Homes Sell For Above the Asking Price – As with anything else on the market, the answer is competition.

Oftentimes, there are many buyers trying to get the same home. In the process, they compete by bidding higher and higher. The seller naturally choses the highest offer.

For Sellers


How Do You Sell a House – At the heart of it all, selling a home is about putting your home on the market and attracting buyers.

A real estate agent can help you navigate the entire process, from understanding how much your home could sell for, to attracting buyers, and through negotiating and closing the deal.

If you want to list your home, simply speak with an agent. The steps involved are: choosing an agent, understanding the value of your home, getting your home ready to sell, having the agent market your property, having potential buyers come view it, receiving and reviewing offers, negotiating, accepting an offer, and finally closing.

Should You Use a Real Estate Agent When Selling a House – Selling a home is a big decision and it’s no small task. A real estate agent will help you navigate all of the logistics, and most importantly, ensure that you get the most money for your home.

Agents have access to resources and connections that everyday people don’t. Not only that, but they will be on the case fulltime marketing and showing your property, which is much more effective than selling it by yourself during evenings after work or during weekends.

How Much Does a Real Estate Agent Cost When Selling a House – The typical commission rate is 4%, however in some cases it can be higher at 5% or 6%.

Commission is paid by the seller, and covers the fee for the selling agent as well as the buyer’s agent.

Commission is only paid out if the home is successfully sold.

How Long Does it Take to Sell a House – The amount of time spent on the market depends on the property itself, however, many homes in Waterloo Region sell rather quickly.

Depending on the situation it can be either a matter of days, 1-2 weeks, or a month. In more rare cases there are homes that sit on the market for more than a month.

This is how long it takes to secure and accept an offer. Beyond that, there is the closing period which is usually 90 days. However, that is up to the seller. In some cases, if you’re already moved out, homes can close in less time (30 days) or even immediately.

Should You Get Professional Pictures When Selling a House – Yes. People take in a lot of information visually, and especially in this digital age, imagery is incredibly important.

As many people browse for homes online, the quality of pictures you use can determine the priority buyers assign to your property. This translates into the amount of attention you’re going to get and ultimately it affects your bottom line when it comes to how much you sell for.

Should You Get Your Home Professionally Staged Before Selling – Staging is indeed very important and a professional touch can make a difference.

That being said, you don’t always need to go full out. Making sure to declutter thoroughly and tending to a few visual details can be all that you need.

Should You Declutter Your Home Before Selling – Yes. Decluttering is a very easy and very effective way to increase the visual appeal of your home.

This has a tangible impact on how buyers perceive, how much they are going to be willing to pay for it, and how interested or defensive they might be during the negotiation process.

Should You Get Your Home Professionally Cleaned Before Selling – Similar to the staging and decluttering points, a clean home is very important when it comes to welcoming in and enticing buyers, and a professional touch can make the difference.

That being said, unless the situation specifically calls for heavy duty cleaning, you don’t have to break the bank on it. Simply make sure the home is clean and welcoming.

Should You Renovate Your Home Before Selling – This is something people think about frequently. The answer is yes, but there is no need to overdo it.

Less is definitely more when it comes to renovations. Tending to maintenance and small fixes can go quite a long way and will have the highest return.

It’s not always necessary to completely redesign the whole house, rather something as simple as a fresh coat of paint can do wonders.

Should You Buy First or Sell First – It can depend on the situation, however it most often is better to sell your current home first before buying your new one.

This is because, once your home is sold, you now have the cash in hand to be able to go shopping for a new place. This means that you know your budget and your finances are secure.

You don’t want to be caught in a situation where you already bought a home but your current place isn’t selling.

How Do You Get Your Home Listed on the MLS – The MLS is one of the many tools and resources real estate agents have at their disposal. The way to get your home listed on the MLS is to work with a real estate agent.

How To Get the Most Money When Selling Your House – There are a lot of factors when it comes to getting the best price for your home.

The bottom line in all cases is how much interest can you generate. The more demand the higher the price.

So, in order to generate as much interest among buyers as you can, there are some key points to consider: work with a skilled agent who knows the market, work with an agent that will be putting in full time effort to advertise your home and get it in front of buyers, understand the value of your home, understand how your home fits into the market (with both its pros and cons), have realistic expectations, be flexible and open minded, and of course – follow the guidance of your realtor.

How Do You Get Your Home to Sell Above Asking Price – Homes sell above asking price when there is competition among buyers.

If more than one buyer wants to buy the same property, the buyers will bid up the price and compete to get it.

So, in order to get that number above asking price, your home will have to be in demand with buyers.

The best way to do that is by working with a realtor that will employ a marketing strategy and will actively advertise your home. This will generate attention, which will generate demand, and the demand will drive up your price.

Can You Back Out of Selling Your House After Accepting an Offer – No. Once an offer is accepted (and the conditions, if any, are met) it becomes a legally binding contract.

You should be careful with which offers you accept, because that is what you are going to have to stick with.

Do You Need Your Spouse’s Permission to Sell Your Home – Yes. If you are selling the home that you and your spouse live in, they will need to sign off that they agree with the property being put on the market.

This doesn’t apply to other properties that you own where you and your spouse don’t reside full time (for example, an investment property where you are the only owner on the title).

How Do You Get Real Estate Agents to Stop Calling You – As a homeowner you might be getting your fair share of marketing calls from agents asking if you want to list your home.

It’s safe to say it can get exhausting if you are seeing yourself getting these calls all the time.

The way to get them to stop is by simply telling them to stop calling.

It’s important to keep in mind that telling one agent to stop calling doesn’t mean that other agents will get the memo. So if you’re seeing a number of different calling in, simply make sure to let them know not to call you again. You’ll see that over time the calls will dwindle down.

Also be sure to keep in mind any services that you may have subscribed to. Sometimes it’s possible that you signed up or requested to be contacted, which is why they’re reaching out. If you’ve changed your mind and don’t wish to be contacted anymore, the answer is the same: simply tell them to not call anymore.

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