Frequently Asked Questions of the Mason Realty Group

Why should I hire a Realtor when buying or selling my home?
What does it cost to hire a Realtor?
Why willhiring a Realtor to buy my home likely not cost me anything?
What is the Difference between a Realtor and any other Real Estate Agent?
How hard is it to buy a home?
What information will I need to Sell my home?
What information will I need to Buy a home?
How much home can I afford on my income?
How do I know the home I am getting is a good deal?
How do I decide how much to sell my home for?
What does a Realtor actually do?
What does Square Footage mean - How is it measured?
How do I know I have a good Realtor?
I have 3 people in my family. What kind of Square Footage would be right?
I am only 23, should I really purchase a home now?
What things should I expect with home ownership that I don't have with renting?
What is an Escrow Account?
What are the pros and cons of having an escrow account?

Why should I hire a Realtor when buying or selling my home?

Aside from the convenience of having someone else handle marketing and contract writing, property deeds and real estate contracts are legal documents and real estate laws change regularly. What you knew about buying or selling a home just a year ago has already changed. Sellers and buyers can be held accountable for even small mistakes in marketing and in the preparation of those documents. Just as you would hire an attorney to handle legal matters, a tax preparer to handle complicated tax issues or a mechanic to handle auto issues, hiring a Realtor, a GOOD Realtor, can make your transaction much smoother. Also, statistically, homes listed by Realtors bring more money in less time so what may look like an un-necessary expense can actually make you more!

What does it cost to hire a Realtor?

It is illegal to say that there is a set commission rate for real estate services as each company and in some cases, each individual, can set their own rates. Typically, commissions are based on local markets and requirements that companies place on their agents. At Mason Realty Group, we do not place commission minimums on our agents. We believe each agent is responsible for assessing the needs of the seller and establishing a rate that is both fair and honest. Of course, if you are buying a home, it will likely cost you NOTHING to hire a Realtor. Why not take advantage of a professional service that potentially costs you absolutely nothing!

Why will hiring a Realtor to buy my home likely not cost me anything?

Typically, real estate commissions are paid by the seller. In open markets like Colorado and Wyoming, the listing contract includes total commissions to be charged to the seller, including a co-op commission that the listing company will offer to other companies if they will bring a buyer for the property. It does not cost the seller more to have another company bring a buyer as the co-op commission is paid from the seller’s total commission in their listing contract. In the event of a closed market, where properties are not made accessible to Realtors from other companies, there may not be a commission for the buyer’s agent unless the seller agrees to it by negotiation in the contract or unless it is paid by the buyer. Your Realtor should tell you whether the seller is paying commission before you look at the property so there are no mis-understandings.

What is the difference between a Realtor and any other real estate agent?

A Realtor is required to pass ethics courses and belong to a local board that monitors complaints and arbitrates disputes between agents. Those who hold the Realtor designation are willing to be held accountable to a higher standard.

How hard is it to buy a home?

It depends on how you approach the process. Buying a home should be an exciting, fun experience. Many people mix up the steps to getting there and create a very frustrating situation and an overall bad experience that may or may not result in buying your home. It can be a complicated process; therefore, in order to have the best possible outcome with the least amount of stress along the way, we recommend you hire a Realtor and allow them to walk you through the process. Generally speaking, one should establish how much home they can afford before trying to find property. Once you know what price range to look in, your Realtor can help you narrow the search by neighborhood, school, amenities, conveniences or whatever your criteria are for finding the perfect home.

What information will I need to sell my home?

In order to sell your home, you’ll need to provide a minimal amount of personal information, legal name(s), property address and information on any existing loans on the property. You’ll also need to be sure your Realtor knows what personal items you will take with you when you move and which will be staying and you’ll need to discuss how you will allow access to your property for viewing and contact information so your Realtor can keep you updated on marketing strategy and any offers that come in on your property. At closing, you'll be required to provide proof of identity with a driver's license or other state issued photo id.

What information will I need to buy a home?

In order to buy a property with a mortgage, you’ll need to submit a considerable amount of personal, mostly financial, information to your lender. The amount and type of information that will be required of you depends on the type of loan you are obtaining, how much money you are bringing to the transaction and your credit history. You will have to provide household income and expenses and documentation to back them up such as pay stubs and/or bank statements for 2-24 months, taxes for 2-3 years and even utility statements or rent receipts if you do not have enough trade lines (unsecured loans). Having said all that, you should not be afraid to begin the process if you do not have this documentation. We suggest that you speak with a mortgage broker or your bank to determine other ways to prove your mortgage worthiness. You will also be required to prove your identity with a driver’s license or state issued photo ID at closing – there is no way around this one!

If you will not be financing the purchase, you’ll likely be required to prove that you have the cash to close. The seller’s agent will likely want to see a bank statement or a certified statement from your bank indicating you have the funds to close. You will also be required to prove your identity with a driver’s license or government issued photo ID at closing.

How much home can I afford on my income?

Again, we suggest that you meet with a mortgage broker or your bank to determine what you can actually afford. Income is one factor, but your monthly expenses and lifestyle are significant pieces of that puzzle. There is a difference between the black and white paper version of what you can afford and what you can actually afford based on your lifestyle and preferences. Typically, you will not be able to obtain a mortgage for payments that would encompass more than 40% or so of your monthly income but even that percentage depends on the type of financing and amount of down payment on the loan. FYI – this is one of the areas where I love Nancy the most – she’ll help you determine the price range you SHOULD be in – not just what you COULD be in.

How do I know the home I am getting is a good deal?

Here’s another area where having a Realtor on your side is a huge asset. Prices are based on local markets and are established by the history of what buyer’s are willing to pay for the subject or similar property. You can use public records to determine what similar homes in the area have sold for and compare to the price you offer on your home, but you cannot tell how long a property was listed, it’s condition at the time of the sale or what concessions were given in that previous sale from public records. You can also hire an appraiser to determine the value of the home but this can be somewhat tricky as it’ll likely cost you several hundred dollars and will likely NOT replace the appraisal your lender will require, which means you may be paying for 2 appraisals. Your Realtor cannot do an appraisal for you, but they can search recent sales and provide a considerable amount of valuable market trend information to help you decide if the home is worth what you are paying!

How do I decide on how much to sell my home for?

Actually, we use the same methods for determining what to list a property for as we do to determine whether the property you are buying is worth what you are paying. We look at recent sales of homes in the same general area which are as close as possible in size, style and amenities. This information is used as a baseline. Then, we look at properties with the same criteria that are actively for sale ( your competition – that’s what I call it!) in order to develop a marketing strategy that makes your home the most desirable in the area. Price can also be determined by what is currently owed and what the seller’s motivations are for selling. Generally speaking, if you can price your listing 2-5% below your closest competition, you’ll sell first. If your motivation is to get more money and you have the time to wait, you can list at or slightly above your competition depending on the market you are in. A local Realtor will be able to help you determine how best to price your listing!

What does a Realtor actually do?

Realtors are extensively trained in real estate law so their primary purpose is to insure your transaction is handled legally and efficiently. This includes things like making sure there are no liens on the property that would prevent it’s sale, verifying the legal address is accurate, checking figures and legal transfer documents at closing to insure accuracy and adequately wording legal contracts and documents to protect your interests. Realtors negotiate terms of the sale on your behalf so that difficult confrontational situations do not arise or if they do, can be handled in a professional manner, far removed from your living room. Realtors also market properties in multiple ways and help to determine market values of homes depending on the local market. Realtors do not replace appraisers, who’s purpose is to protect the lender’s investment in mortgage situations.

What does square footage mean – how is it measured?

Square footage is the total amount of area of a subject property as determined by multiplying the length of the home by it’s width. Square footage is determined differently in local markets. For example, in Colorado, square footage is an outside measurement of a property as a standard. Though outside measurements are usually easier to obtain, they are not an accurate depiction of how much actual living area is present in the home as it includes both interior and exterior walls, staircases and other non-living space. Some markets use interior measurements which are often more difficult to obtain as not all rooms are square or easy to measure. We do not recommend discounting a home based on it’s square footage. In 10+ years of experience, I’ve seen 1000 sq ft homes or less that I could be more comfortable in than 2000 sq ft homes – it depends considerably on the layout and “wasted” space of the home which are mostly subjective considerations. If square footage is important in your decision making, we suggest you ask your Realtor what the standard is in your market before you begin looking at homes.

How do I know if I have a good Realtor?

Aside from the usual, knowledgeable, competent, trustworthy, responsible and bold, a “good” Realtor is an accomplished communicator and is an EXCELLENT listener. An excellent Realtor possesses all of those qualities in addition to caring for the long term well-being of the client. We suggest, in looking for a good Realtor, that you interview a minimum of 3 so that you can test these qualities and choose a Realtor who best compliments your personality and needs. At Mason Realty Group, I hand pick EXCELLENT Realtors – and will accept nothing less. So you’ll know that you, not just your transactions, are in good hands.

I have 3 people in my family. What kind of Square Footage would be right?

There is no canned amount of square footage that is correct or incorrect. A better determination for what size will work for your family might be the number of bedrooms, living areas, office space, bathrooms and garage bays and the sizes of those rooms individually as well as the style of the home (2 story, ranch, bi-level, tri-level, etc.). A well planned home does not have to be large to be comfortable.

I am only 23, should I really purchase a home now?

If you’re old enough to enter into a legal contract, you’re old enough to buy a home. Home ownership is not necessarily a good idea for everyone; however, since real estate is generally considered an asset, we recommend that you buy as soon as you are legally, financially, emotionally and practically able. Having said that, we recommend, no matter your age, that you consult with real estate, mortgage and tax professionals as part of your decision making process to determine if the time is right for you. Contact a Mason Realty Group agent today and we’ll be happy to help you make those connections!

What things should I expect with home ownership that I don’t have with renting?

Ok, I’ll start with things that might generally be considered negative so we can get past those and talk about the good stuff! Depending on the type of rental contract you were in, you can expect NOT to have a phone number to call if something breaks. As the home owner, you’ll be responsible for anything that breaks or needs batteries or needs plunging, etc. so you’ll want to have the home inspected thoroughly before you buy. If you’re using a mortgage to obtain the home, you’ll also be required to carry hazard insurance and depending on it’s location, possibly flood insurance. You’ll also be paying property taxes to your local county. These expenses may be collected monthly by your mortgage company in an escrow account or may be paid by you directly to your insurer and the county you live in once or twice a year depending on the type of loan you get. Now for the fun stuff! You are entitled to “write-off” some of the expenses of homeownership on your income taxes. Generally, you can deduct some of the closing costs for the purchase and any interest you’ve paid on your mortgage loan. Sometimes, property taxes and repairs can be deducted and since you’ll be filing an itemized return, rather than the EZ form, there may be other household deductions you qualify to claim. We recommend you consult a local tax professional at least the first year of home ownership so that you know all of the deductions you can take. These laws change so please do not take what is written hear to be an indication of current tax law. Also, if the stove breaks – you can replace it with the one you want! You’ll not be subject to someone else’s taste or budget with regards to replacing, updating, decorating or repairing items in YOUR home. Your creative side has license when you own! And then there's the discount you'll get from your insurance company if you're able to insure your home with the same carrier as your auto(s). It's a multi-policy discount so you'll want to check with your auto carrier about your home insurance first. If you're not satisfied with rates, shop around and be sure to ask about a multi-policy discount!

What is an escrow account?

An escrow account is basically a savings account set up and maintained by your mortgage company for the express purpose of insuring that your taxes and insurance are paid on time. Sometimes escrow accounts are optional, sometimes required by the lender to secure their interest in the property. At closing when you purchase your home or when you re-finance your first mortgage, you will pay one year plus 1-6 months of your annual insurance premium and 1-6 months of your estimated property taxes, depending on the loan you get, into your escrow account to set it up. Then you will pay 1/12 plus a small cushion of your estimated annual taxes and insurance premium each month with your monthly mortgage payment. When those expenses are due, the county and your insurer will bill your mortgage company and your mortgage company will pay them directly from your escrow account. Two things most people don’t know about their escrow account: 1. You are the owner of the account, so when you sell your home or re-finance with another mortgage company, you are due a refund of any monies that are in that account. It should come to you by mail after closing so be sure to let your mortgage company know where you’re moving to! 2. There are limits to how much of your money the mortgage company can hold in an escrow account. Those amounts differ by state so I suggest researching the limits in your state because if your escrow account ever exceeds the legal limit – your mortgage company MUST refund the overage to you immediately.

What are the pros and cons of having an escrow account?

Pros – You will not have to worry about coming up with a large chunk of money to pay taxes and insurance. If you receive stable monthly or weekly income, it may be easier to come up with 1/12 each month than the whole thing once a year. Un-paid taxes can cause the home to go into foreclosure causing the first mortgage and you to loose rights and ownership of the property. It’s a safety net for you.

Cons – You typically do not earn interest on your escrow account money. If you were to hold back 1/12 of your money each month and put it in a private account, you could earn interest on your money. Escrow accounts are not typically interest bearing or if they are, the mortgage company retains the interest as compensation for managing your account or donates it to causes they consider worthy.

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