Frequently asked Real Estate questions and answers supplied by our Prescott Real Estate Team of Professional Real Estate Agents

Real Estate FAQ

This is where we have taken the time to answer some of the common questions people have about the real estate process. We hope you find this to be a practically in-depth, helpful, easy-to-use reference. However, we have not by any means covered every real estate nuance. So if there is a question not dealt with, or you simply cannot find the answer you're looking for, please don't hesitate to contact our real estate team toll free at 866.717.9700.

TABLE OF CONTENTS

GENERAL

→ Why should I hire a Real Estate Agent?

A real estate agent is a trained professional who's job it is to act on your behalf to help you navigate the ever increasingly complicated world of market conditions, legal contracts, negotiation, and disclosure laws. The following are a few reasons to consider hiring a Real Estate Agent:

  • If you're going to sell your home
  • Agents know the market and can help you determine the right price for your home.
  • Agents have a vested interest (commission) in selling your home for the highest amount possible.
  • They have far greater resources than you for locating buyers and steering them to your home.
  • They have access to and utilize the Multiple Listing Service (MLS), which lists recent sale prices of homes similar to yours in your neighborhood—the key determiner of your home's worth.
  • Agents can advertise your home in classified ads and real estate magazines. They make sure in advance that prospective buyers are financially able to buy your home.
  • Agents aren't emotionally invested in your home, so they can keep cool, level heads during the negotiating process.
  • They save you valuable time, working many hours behind the scenes for every hour they're in your presence.
  • If you're going to buy a home
  • Agents know the market and can help you determine a reasonable asking price for a home you are considering.
  • The real estate commission is paid by the seller.
  • They can show you properties that are inaccessible without and agent.
  • Agents have far greater resources than you for locating properties that meet your criteria and exposing you to them.
  • They make sure you speak to a lender and are pre-approved so when you find the home you want to purchase, there will be no roadblocks.
  • They are experts at writing contracts and navigating the escrow process. They save you valuable time, working many hours behind the scenes for every hour they're in your presence.

Back to Table of Contents

→ How do you charge for your services?

The seller is responsible for paying the commission. The compensation is typically divided between the broker listing the property for the seller and the broker representing the buyer.
Back to Table of Contents

→ Can you help me find a realtor in another location?

Yes, Russ Lyon Realty Company is a member of the RELO® network, a national and international relocation service. RELO® is the country's largest network of independent real estate firms. With 800 affiliates and 85,000 sales associates in our network, we can find you a REALTOR® anywhere you're thinking of relocating.
Back to Table of Contents

→ Do I need an attorney to sell my home?

No, Article 26 of the Arizona Constitution specifically grants real estate agents the legal authority to fill out and complete any and all documentation pertaining to real estate transactions. Real estate agents are recognized by the State of Arizona as an "Attorney in Fact" in matters pertaining to real estate. As an added measure of protection, the language in the Arizona Association of Realtor's documents and forms has been constructed by attorneys to ensure they comply with strict legal and ethical standards.
Back to Table of Contents

→ What is dual agency?

Dual agency occurs when a real estate broker represents both the buyer and seller in the same transaction. Dual agency is legal in Arizona, provided it is fully disclosed and consented to by all parties. If you find yourself involved in a dual agency relationship, before receiving an offer both you and the other party will be asked to consent in writing to this new limited agency relationship.

Since the broker has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent. This relationship involves the following limitations:

  • The Agent will deal with the Buyer and the Seller impartially.
  • The Agent will have a duty of disclosure to both the Buyer and the Seller
  • exceptions
  • The Agent will not disclose that the Buyer is willing to pay a price or agree to terms other than those contained in the Offer, or that the Seller is willing to accept a price or terms other than those contained in the Listing.
  • The Agent will not disclose the motivation of the Buyer or the Seller to sell unless authorized by the Buyer or the Seller.
  • The Agent will not disclose personal information about either the Buyer or the Seller unless authorized in writing.
  • The Agent will disclose to the Buyer the defects about the physical condition of the Property known to the Agent.

Back to Table of Contents

→ What is the MLS System?

MLS stands for Multiple Listing Service. It is a dynamic and comprehensive listing service for relaying property information to REALTORS®. The MLS system allows a listing agent to market your property to potentially thousands of other subscriber REALTORS®, expanding the marketing of your home well beyond the realm of local buyers.

Buyer's agents almost exclusively utilize the MLS service to access information about the location, price, size, number of bedrooms, architectural style, and special features of your home for their clients. In addition the MLS includes helpful information on available financing, taxes, showing times, and specific closing requirements.
Back to Table of Contents

→ What does FSBO mean?

FSBO is an acronym meaning, For Sale By Owner.
Back to Table of Contents

→ What are discount points?

Discount points are paid by the borrower to a lender to reduce the interest rate of a loan. One discount point is equal to one percent of the purchase price.
Back to Table of Contents

→ What is an escrow officer?

An escrow officer is a neutral, third party responsible for overseeing the paperwork and transfer of ownership of property. The escrow officer, who is employed by a title company, performs the title searches, prepares final paperwork, witnesses the document signing, and ensures that the real estate transaction is executed properly and legally.
Back to Table of Contents

→ What is the difference between an agent and a broker?

The difference between a real estate agent and a real estate broker lies in the amount of education and experience each has. While both agent and broker may list and sell property, the broker has additional administrative responsibilities.

A real estate agent is tested and licensed by the state, is considered an independent contractor, and must work under a licensed broker.

A real estate broker is required to have additional education and experience, is authorized to operate a private real estate firm, and supervises the transactions conducted by the salespeople, to ensure the ethical and legal standards established by the Arizona Association of REALTORS® are upheld.
Back to Table of Contents

FOR THE SELLER

→ Will it cost me more because of the level of service you provide?

No, you get all of the exclusive services we provide, plus a fully trained team of professionals for the same price as hiring a single agent and another brokerage.
Back to Table of Contents

→ If a person shows up to my house wanting a tour, should I let them in?

No, never let anyone into your home unannounced. REALTORS® follow a set protocol for making appointments to see your home and serious clients will contact a REALTOR®. Be leery of the person who knocks on the door, expecting to be let in to your home. If this ever should occur, have the people wait outside while you contact us.
Back to Table of Contents

→ Should my listing agent be showing my home?

Many homeowners use this as a barometer to judge whether an agent is doing a good job; however, a listing agent's job is not to bring a buyer to your home, but to market your home to other real estate agents and their prospective buyers. With over 1,600 real estate agents in the Prescott Tri-City area, the likelihood is that someone other than your listing agent, or even the listing agent's firm, will sell your home. Although, the Kathleen Yamauchi Group sells a high percentage of our own listings, it is possible we might go through the entire listing period without having the right buyer for your home. We will show your home as often as we have a qualified buyer, we will not however show your home to just anyone to make you think we have a buyer.
Back to Table of Contents

→ How does a lockbox work?

A lockbox is a hollow metal box that attaches to the front doorknob or some secure place nearby. Inside the hollow area is another matchbox-sized box that contains a key to the house. When an agent opens the lockbox, that smaller container slides out, revealing the key.

The lockboxes have a tiny microprocessor inside and can only be opened with an electronic key, which is only available to members of the local Multiple Listing Service (MLS). All of the keys have a unique identifier, so when someone opens the box, the microprocessors inside "registers" the agent who opened it. In addition to agent name, the date and time of access are also identified. Once the lockbox has been accessed, the information is stored in the electronic key and sent automatically to the local MLS Association that evening.
Back to Table of Contents

→ Do I have to have a lockbox on my house?

The main purpose of a lockbox is to facilitate the sale of a home. Without it, buying or selling a home would be much more difficult. A lockbox provides convenience to the seller, buyer, and real estate agents. Without the lockbox the seller would have to be present for all showings, leave the door unlocked, or coordinate getting a key to each and every buyer's agent who wanted to show clients the home. Since it would be near impossible, not to mention extremely inconvenient to do any of the above, a lockbox is a good, convenient solution to accessing your home.
Back to Table of Contents

→ Do you only accept "high-end" listings?

No. We are often perceived as a "high-end" brokerage because of the level of marketing and services we provide; however, we work with clients at every range of the home scale, from 600 square foot, $100,000 bungalows to expansive, multi-million dollar estates.
Back to Table of Contents

→ Can I turn the utilities off once the home sells?

No, the utilities must remain on the entire listing and escrow period due to showings, inspections, and the final walk-through.
Back to Table of Contents

→ What is the listing price you recommend based on?

The listing price your listing agent recommends is based on a careful analysis of the market, sold homes that are comparable to your home (known as comparables or comps), location, and your homes distinguishing features.
Back to Table of Contents

→ How much will it cost to sell my home?

Since many of the fees associated with selling a home are based on the purchase price, a definitive answer is hard to come by; however, the following items are a general list of expenses a seller can expect to pay. (Note: some items are negotiable between the buyer and seller, if written into the purchase contract.)

  • Home inspection
  • Pest inspection
  • One half of the escrow fees (split with the buyer)
  • Recording fees (split with the buyer)
  • Payoff of Seller mortgage
  • HOA transfer fee
  • Assessments
  • Real estate commission
  • Title insurance
  • Septic inspection
  • Survey, well inspection, home warranty (negotiable with buyer)

Back to Table of Contents

→ Should I leave when my home is being shown?

It is always best to leave when your home is shown. With you there, potential buyers may feel like intruders and will hurry through the house. With you gone, buyers will be free to envision your home as their own or talk openly about the features of your home they like or dislike.

If you must be in the house during a showing, be courteous but don't force conversation with the potential buyer. Do not volunteer information about your home. What seems like an advantage to you, may be a disadvantage to the buyer. Let the prospective buyer's agent, who knows his/her client's likes/dislikes point out the features of your home and answer their client's questions.
Back to Table of Contents

→ What are comparables or comps?

Comparables, or comps for short, are recently sold properties that are similar in size, age, location, and amenities to the subject property. Comparables are used by appraisers and real estate agents to determine fair market value of a property.
Back to Table of Contents

FOR THE BUYER

→ What is a Buyer Broker Agreement and why should I sign one?

A Buyer Broker Agreement is a contractual agreement between a buyer and real estate agent that precisely outlines responsibilities, representation, and compensation.

By default, all real estate agents work for the seller (even if the agents and sellers have never met before), and have a legal obligation to protect the interests of those sellers. As such, the seller agents can provide information about particular properties to buyers, but their primary loyalty is to the sellers of the properties. A seller agent, cannot do anything that would be in the interests of the buyer rather than the seller.

A Buyer Broker Agreement establishes that the real estate agent works for the Buyer exclusively and owes loyalty, honesty and fiduciary duties to the buyer alone. By signing a Buyer Broker Agreement, you allow your real estate agent to completely represent your interests. They can also talk to you about real estate in general (including providing information about potential market downturns and risks), provide honest opinions and analyses about the relative values of properties, expose you to properties other than those listed by other real estate agents (including showing properties For Sale By Owner), negotiate offers on your behalf and in general, represent your interests to the exclusion of the interests of the seller.
Back to Table of Contents

→ Can you show me any home or just ones listed by your company?

We are not limited to showing you only the homes we have for sale. We can show you any home listed in the Multiple Listing Service, as well as newly constructed homes in a new home subdivision, and For Sale by Owner properties.
Back to Table of Contents

→ What is earnest money and how much do I need to put down?

Earnest money is the deposit you make on a home when you submit an offer. The Earnest money proves to the seller that you are serious about wanting to buy the house. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment, closing costs, or other agreed upon expense specified in the purchase contract. If your offer is not accepted, your money will be returned to you.

The amount of your earnest money varies and is negotiable between parties; however, an industry standard is anywhere between 1% - 2% of the purchase price.
Back to Table of Contents

→ Should I get prequalified before looking at property?

Yes. It is to your advantage to pre-qualify for a mortgage. The following is a list of benefits of prequalification:

  • Prequalifying for a given loan amount allows you to comfortably shop for a home within your price range.
  • Prequalfying can speed the process of obtaining a mortgage once a house of your liking has been identified.
  • Prequalifiying gives you an advantage with the agent and sellers to whom you submit an offer, demonstrating to them you are a determined and qualified buyer. This is especially important in a fast-paced market, where competition for a limited number of homes exists.
  • Prior credit approvals can expedite the closing of your loan. Proof of prequalificaiton is required with the submission of the Arizona Residential Purchase Contract (your offer).

Back to Table of Contents

→ What is the difference between prequalification and preapproval?

Prequalification is a quick, simple process that is done either over the phone or at your initial meeting with the loan officer. Prequalification is based on housing and debt ratios, and will give you an idea of how much house you can afford, as well as options for loan programs.

A preapproval requires more detailed documentation of the information necessary to complete your loan. The loan documents will be processed, with information obtained from you and outside sources and then submitted to underwriting, where all the documentation will be reviewed. The underwriter will do one of three things: approve, reject, or approve with conditions. If the Underwriter issues an approval of your loan with additional conditions to be met, it is considered approved; however, the outstanding conditions will need to be satisfied before your loan is considered fully approved. Once the process is complete, you will be given a preapproval letter stating the lender is willing to give you a loan. This letter is typically valid for 60 days.
Back to Table of Contents

→ What information will I need to apply for a loan?

Some general information that is typically required includes:

  • The names and social security numbers of the borrower and co-borrower(s).
  • Where you have lived for the past two years. If you were renting, the landlord's name, address, and phone number.
  • Your most recent two-year employment history, including income.
  • W-2 tax forms for the past 2 years.
  • A listing of all creditors, including account balances.
  • Information about all bank and investment accounts, including balances.
  • The value of any other assets you might own, including other real estate.
  • Bank statements for the past three months.
  • Gift letter statement. If you have received any money from friends or relatives which will be used towards the purchase of the home.
  • Most recent pay stubs. (Usually the last 30 days.
  • Any supporting documents proving claims of additional or supplemental income for sources like: social security, pension, stock dividends interest and such.
  • If self-employed, additional tax forms and financial statements regarding both you and your company may be requested.
  • If recently divorced you will need to provide a copy of the divorce decree as well as proof regarding any claims of receiving alimony or child support.

Back to Table of Contents

→ Can you help me find a realtor in another location?

Yes, Russ Lyon Realty Company is a member of the RELO® network, a national and international relocation service. RELO® is the country's largest network of independent real estate firms. With 650 firms, comprising 4,700 offices with 120,000 sales associates we can find you a REALTOR® anywhere you're thinking of relocating.

Back to Table of Contents

ABOUT SECTIONS

The Kathleen Yamauchi Group is unique in that each member of the team is specialized to cover a specific function of the real estate process. Our team of specialists has one common goal: to make your real estate transaction a smooth and pleasant one. Drawing from our specific strengths and experience, we provide you with far more in the way of service and results than you could ever expect from a single agent or simple partnership. When you entrust your real estate decisions to us, you can count on a professional, thorough and satisfactory experience.

FEATURED HOME