Dear Michael: Has the current housing market changed the going commission rate for real estate agents?
Answer: In my experience, you get what you pay for. The agents taking less commission are also doing less of the work, and providing more a la carte type services. . . . or don’t really know how to handle complex transactions. The market is now flooded with REOs (bank own properties), short sales (where the current lender’s approval is required to sell), etc. . . . these overlays, combined with increasingly cumbersome mortgage and appraisal guidelines mean that a lot of transactions require 2-3 times as much time and effort to close. There is also a much higher percentage of deals that “fall out” or are being canceled. So, to answer your question: there are more cancellations and more work required from an agent to sell a home, along with lower home prices equals less commission earned for the agent. The rate of commission is actually increasing where you seldom see anything less then 5 percent and more often then not 6 percent.
Dear Michael: What is the difference between a real estate agent and a real estate broker?
Answer: A real estate broker has a more senior license and supervisory obligations and permissions from local licensing authorities than an agent. As such, a real estate agent is a licensee that works for or under a real estate broker’s license. In Calif. for example one may not obtain a RE Broker’s license until they’ve been licensed as a RE Agent for at least two years and then complete a separate Broker training and testing requirement.
Separately, a real estate licensee who is a member of the national lobby called the National Association of Realtors is a real estate AGENT who has permission to use the name “Realtor” due to being a card-carrying / dues paying member.
Dear Michael: We are closing escrow on our new home. At closing does the seller or buyer pay the property taxes?
Answer: Taxes are typically pro-rated to the date of closing – that is, the seller pays the days that he or she owned the house, and the buyer pays any remaining days left for the current bill ( property tax bill is from July 1 until June 31) as well as any bill that is due within 60 days of the closing. (Because there is a delay before a buyer’s first payment is due, the money for the upcoming bill is collected at the closing to be certain that it is paid on time). In some areas, this practice may be different – and there may be more taxes then “property tax” – there may be county, school, or other taxes as well. All taxes may be negotiated as part of the purchase agreement – if the seller’s agreement to pay the upcoming tax bill is enough to make a price agreeable to both parties, there is nothing stopping the parties from making this agreement before a purchase contract is executed.
Dear Michael: Can you please tell me what I need to do to make sure title is clear on my home before it can be sold?
Answer: When a home is purchased, either existing or new, a title search must be done on the property in order to protect buyers and lenders from problems that could affect ownership. Some of these problems may be property line disputes, utility or other easements, tax liens, or materials men liens. Just to name a few. In order for your home to “clear title,” the buyer’s lender is going to order a Preliminary Title Report, or “Pre-Lims” to make certain that there are no issues that would keep them from lending money on the home. If there are, those items must be cleared and proof of that clearance provided before the lender will loan or the title company will insure. Even if a lender isn’t involved, a title search should be done so the parties are protected and clear title can be given.
Michael Kayem is a Realtor with Re/max Estate Properties serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or email them to him at: homes@agentmichael.com
