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What is a Realtor?
Realtor is a trademark that can be used if you are a member of the National Assoc. of Realtors.
Sometimes we are called "agent" or "sales associate".
What is a Broker?
Broker's have senior licenses to (real estate salespersons, agents, and associates) and usually have
their own agency in which they employ the above salespersons. Salespersons who are not Brokers, must work under a licensed
Broker.
What is the Multiple Listing Service?
The MLS is a paid membership service for agents to enter all the homes they are selling (called
listings) and for other agents to search for properties to buy. The MLS service is divided up into areas. There
are many MLS groups in Los Angeles County as well as Orange, Ventura, San Bernadino etc.
What is a Comparative Market Analysis?
A CMA is an analysis of sold houses in your area that
are comparable to yours. The purpose is to have a reasonable evaluation of what your home is
worth on the open market. This is a service that Realtor's provide for you to give you an idea of what you should ask
for your home if you choose to sell it.
What is a Foreclosure?
In
California, if you are late on your mortgage payments your loan company
can file a Notice of Default (NOD) with the county you are in and this becomes public notice. This officially starts
your foreclosure. You have 90 days to make up the back payments or sell your home to "cure" the foreclosure. If
you do not then the bank files a notice to sell your home and this is called a "Trustee Sale". They usually give you
another 21 days to make up the payments etc. to save your home from being sold. If the "Trustee Sale" occurs (usually
on the court house steps) two things can happen. Someone buys your home or the bank takes it back and your home becomes
bank owned (REO) "real estate owned".
What is a Short Sale?
This is a term used when the home owner has a home
loan that is worth more than the current market value of the home. The home owner usually cannot sell the home for what they
owe on it so they make a proposal to the loan company that holds their mortgage to do a "short sale". this means that
the owner or an agent/broker must put together a package/proposal of hardship for the loan company and submit an offer (usually
lower that what is owed on the home) and ask the loan company to take a loss on the amount owed on the loan.
Example: homeowner owes $500,000. and the house in todays market is worth $400,000.
Homeowner has an offer for $400,000. Submits the proposal to the bank to accept the offer of $400,000 and take a loss
of $100,000.
This is simplified as there are other costs involved which have to be worked out with the
bank. But the general idea is above.
As part of the Short Sale the homeowner cannot receive any funds or financially benefit from
the sale.
What is a Title?
It is evidence that one has the right to possession of land.
What is a Mortgage or a Trust Deed?
In So. California we use a document (security instrument) called a Deed of Trust to
show title to a piece of property. In other parts of the country it is called a Mortgage.
You frequently hear them used interchangeably.
What is Escrow?
When buying or selling a home there are many legal and financial steps to transfer the title
and loan(s). Escrow is a service that is licensed to do these transactions and remain a neutral party for both sides.(Buyer
and Seller).
What is Equity?
There are two ways to look at equity. In buying a home, the buyer usually finances
the money to buy the house. When this happens, the buyer puts down a percentage of cash money and secures the balance
of the home price from a lender. Custom is 20% down and finance 80%. (This varies frequently, so get advice from your lender).
The 20% cash down is the equity in the home.
Another way to look at equity is for the homeowner who has already purchased a home and has
been paying mortgage payments to a lender. The difference between what you owe and the current value of your home, should
you sell it, is your equity. For example..Your home is worth $300,000. on today's market and you owe $100,000 on your loan.
Your equity is $200,000.
Does it cost me to hire a Realtor?
If you are buying a home, no. Realtor services are free to the buying parties.
If you are selling your home, you hire a Realtor, for a negotiated fee, to sell your
home.
How does a Realtor make money?
When a Realtor is helping you buy a home, the Realtor usually collects half the fee that
has been negotiated by the seller, upon the close of Escrow.
The Realtor who listed the home to sell, also receives half the fee.
(Again, all this is negotiated as there is no law that fixes the fee.)
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