+ What is the first step of the home buying process?

Although opinions vary, and some would think that identifying the right house should be the first step, there is really a step that should be taken, even before you do that: Getting pre-approved for a mortgage by a Lender.The reasoning behind this response is that you need to know how much you can borrow. This will allow you to narrow down your home search to suitable properties, and you will not waste time looking at homes that are not within your budget. This will help you get a clear picture of what will be required from you, financially speaking. Being pre-approved for a mortgage also helps demonstrate that you are a serious buyer to both your real estate agent and the person selling their home.

+ Can I sell a property without using a real estate agent?

With the era of DIY (Do It Yourself), and so much information being available online, you may be wondering if you really need an agent for this process. Can you do it without an agent? Yes, you can. Should you? No, you should not. This will be a big financial decision, so you want to make sure you do it right. Real estate agents have access to real time and more complete information than what you may find on your own. Information is power. An agent will help you navigate comparable sales and give you an opinion of price that your property is likely to achieve. On your own, you might end up pricing your property too high (causing it to sit for long and stale on the market); or worst, you could end up pricing it too low and leave money on the table. Typically, “for sale by owner” (FSBO) listings do not make it to the Multiple Listing Service (MLS), which will result in a very reduced exposure for your property. Experienced brokers many times even avoid FSBOs as they tend to be viewed as “unrealistic, unreasonable and sometimes just difficult sellers”. Agents will have relationships with clients, other agents and contacts in general that you may not have on your own. An agent will also help you navigate the sensitive legal and regulatory requirements that come with selling a home. In short, yes, you can try doing it yourself thinking that you will save money, but if you work with a good agent, you will quickly realize that it is money well spent and the benefits quickly outweigh any savings, if any, as more often than not, you could be able to sell your property for more (and/or faster) than you thought it’d be possible.

+ Can I buy a property without using a real estate agent?

If you are wondering whether you need an agent to buy a property, the short answer is no, you don’t. However, you should think twice before going solo. Many buyer’s first thought as the reason to not use an agent for their purchase is because the misconception that they will save money. Typically, buyers don’t pay the commissions. Sellers do. The commission is always negotiable, and it is typically negotiated with the seller by the listing agent, who shares it with the buyer’s agent. Most times, if you don’t have a buyer’s agent, you still don’t get a better price. In fact, the one who benefits from this is the listing agent, who no longer has to share a fee. Even then, fee aside, going alone can be a risky move. An agent is a professional who works on your behalf and advocates for you. There are many legalities, technicalities and fancy terms, and small details typically determined based on market conditions, that can quickly overwhelm and confuse someone who is not familiar with the business. An agent will assist you during the entire process. Remember, making an offer and having it accepted is only the very first step of buying a property. Without a good understanding of the market, you risk overpaying for a property, or ending up with a property that has issues or unintentionally making a legal binding offer that does not fit your exact needs or contingencies.

+ Is there such thing as a “standard commission”? Can I get a rebate?

Commissions are always negotiable. You should always discuss with your agent what the commission will be for the services. There are different approaches and scopes of work and there is not a “one size fits all” type of arrangement. Any agent who tells you that commissions are “standard” or “market” is violating anti-trust laws (such as the Sherman Antitrust Act), specifically enacted to avoid price fixing in Real Estate. It is not a violation of the Texas Real Estate License Act (TRELA) or the Rules for a license holder to rebate a portion of the license holder’s commission to a party to a real estate transaction. If the rebate is to a party the license holder does not represent, the license holder must obtain the consent of the party represented by the license holder before making the payment. [Rule 535.147(d)].

+ Do I need to sell my current home before I buy another one? Or the other way around?

This is a tricky question and can certainly have different answers. If you sell your home before you buy, you might need to rent for some time before you find a new place. On the other hand, if you buy a home before you sell your current one, you might be financially overextended and potentially looking at paying two mortgages, so not a very desirable situation! But, not to worry! There are ways to do both at once, and mitigate these problems. You can make an offer for the new place that is contingent on the sale of your current home. This means you only buy the new home if you can sell the current one. You can request a short lease back period as well to make sure you have enough time to move. The downside of these strategies is that your offer will now be considered an “offer with contingencies”, which not every Seller likes; however, there are ways to achieve it by properly negotiating with all parties simultaneously. Get in contact with us and we will help you navigate your particular situation, ensuring you are contractually protected and getting you the best outcome!

+ What is the earnest money deposit?

An earnest money deposit, known as EMD in short, is also sometimes called the "good faith deposit". When a Buyer signs a contract to purchase a home or any other type of real estate, the Buyer provides this deposit which is paid to the Title Company handling the transaction, for them to hold in their escrow account. The main reason for this deposit is to show a Seller that you are being serious about the purchase. This amount is credited to the final figure that is owed by the Buyer at closing. In many cases, the larger the deposit, the stronger the offer looks. It is very important to know exactly how the EMD process works. Reach out to us to learn more about the EMD, to discuss how much it should be for a particular transaction and to understand the circumstances under which this EMD might be refundable if the transaction doesn't close.

+ How long does it take to buy or sell a property?

The real answer for this question is that it depends on the type of property. The time it takes for a prospective buyer to search for a property and find the right one definitely varies from buyer to buyer, and the time your property might be on the market before receiving an offer will depend on a few different factors like pricing it correctly, marketing it correctly and of course depending on the demand for it. Once the property is under contract (whether you are selling or buying), it really comes down to the type of property and the contingencies of the offer. For example, an empty lot that is put under contract might be able to close within 10 days of the date it is put under contract if it's paid cash, whereas a commercial property will have a much longer due diligence/inspection period, and might take several months from when the contract is signed until the transaction closes. For a typical home purchase bought with 3rd party financing, the average time to complete the purchase is 30-45 days from when the contract is signed, depending on the lender, inspections, and some other factors. Reach out to us today to discuss your specific transaction and understand the circumstances and what to expect as far as the timeline goes.

+ Are there any tax advantages/benefits that come with owning real estate?

Before responding to this question, we must clarify that we are not tax experts, and this information is provided solely as guidance. Always consult with your tax specialist as these matters are complex; however, the answer is yes, real estate provides numerous tax benefits!. On the residential side, when you own a property that you live in as your primary residence, you may get to deduct mortgage interests payments. Also, if you live in your residence for at least 2 years, you may qualify for a capital gains tax exemption. On the investment side, if you rent out a property, you may be able to deduct many expenses such as repairs, maintenance, property taxes and depreciation. Further, if you sell an investment property, you may qualify for a 1031 Tax Exchange, which allows you to defer your capital gains taxes if you re-invest the proceeds into another property! As you can see, there are many tax incentives to owning property. Reach out to us to learn more, and always make sure to consult with a tax expert as well.

+ What stays with the property when it's sold and what is removed?

This answer will depend specifically on the transaction and how it's negotiated; however, in general terms, fixtures stay with the property but personal items are removed. It is not a 100% straightforward definition, but a fixture is basically something that it's physically attached to the property or that serves an integral part of it, while personal property would be items that can easily be taken away from the property without having to detach them. Some examples are kitchen appliances, built-in furniture/shelves, trees on the yard, chandeliers and so on. If any fixture is intended to not convey, it should be removed prior to listing the property on the market, or be specifically excluded. Many times, Buyers mistakenly assume that certain items are fixtures and that will convey with the property. Sometimes Sellers also assume certain items can be removed from the property and many times this is untrue. The purchase and sale agreement can be used to address these items when necessary. Reach out to us to learn more and make sure you avoid getting confused with these tricky definitions!

+ Is a Realtor® the same thing as a Sales Agent or a Broker?

A Sales agent is a person who is licensed by the Real Estate Commission to act on behalf of a real estate broker and their clients. A sales agent must be sponsored by a licensed broker in order to perform any act of real estate services. A duly licensed agent or broker can represent a client in any type of real estate transaction, commercial or residential, purchase or lease. A Realtor® is a federally registered membership term that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics. Contrary to what many people think, the terms are not the same, even if they are often used interchangeably. In essence, every Realtor® has to be a licensed agent/broker, but not every agent/broker has to be a Realtor®.