When it comes to real estate know-how, are you a pro? Whether you're buying or selling, a little bit of insider information goes a long way. With the help of five local real estate experts, we crafted a quiz to test your knowledge. See how well you score.
1. True or False: Realtor is just another title for a real estate agent. They mean the same thing.
2. Real estate lingo can be tricky, as they often use abbreviations only understood by other agents. Of the following, which is NOT a real estate term:
a. FP b. WIC c. SF d. OG
3. It’s always good to set aside some cash for closing day. Say you’re purchasing a home for $500,000. How much should you plan to pay for closing costs?
a. $2,500-$5,000
b. $8,000-$10,000
c. $10,000-$25,000
d. $30,000-$40,000
4. There are more mortgages available than you might realize. Match the following mortgage types to their descriptions:
a. A government loan that’s available to all borrowers and allows a very low down payment
b. A loan where the interest on the initial amount stays the same through the term of the loan
c. A no-down-payment government loan that provides financing to military service members and their families
d. A loan where the rate of interest is adjusted periodically to reflect market conditions
e. A government loan for rural borrowers who meet specific income requirements
I. Fixed rate conventional mortgage
II. VA loan
II. Adjustable rate conventional mortgage
IV. FHA loan
V. USDA/RHS loan
5. You’re planning to sell your home shortly and want to make improvements that you can recoup in value. Which of the following projects is the smartest choice?
a. Front door replacement
b. Bathroom renovation
c. Finished basement
d. Kitchen renovation
6. True or False: A house can fail a home inspection.
7. A listing says a home has a ¾ bathroom. What is that?
a. A bathroom that has a toilet, sink and shower, but no bathtub
b. A bathroom that is shared between two bedrooms
c. A bathroom that is located in the basement
d. A bathroom that is not connected to a bedroom
8. True or False: Staging your home will help it sell faster, but won’t necessarily make you more money.
9. Although they often result in the same thing, foreclosures and short sales have many differences. Which of the following statements is incorrect?
a. Foreclosure sales are initiated by lenders only, whereas a short sale can be initiated by the buyer/seller
b. Foreclosure sales often take place when the owner has abandoned the home, whereas homeowners likely still live there during a short sale
c. Foreclosure sales do not typically take as long to complete as a short sale
d. All statements are correct
10. To help provide insight on the housing market, an agent often draws up a document with information on homes in the neighborhood that are for sale or have been sold recently. Which of these terms does NOT describe this document?
a. CMA
b. Comparative Market Analysis
c. Competitive Market Appraisal
d. Comps
Answers
1. False. “A real estate agent is a person who earns a real estate license by taking the required number of classes and passing the state exam,” says Bowman. But the title of Realtor (spelled with a capital R) is only given when an agent has joined the National Association of Realtors. “A major benefit of working with a Realtor is that he or she subscribes to a strict Code of Ethics which in many cases goes beyond state law,” Melchiorre explains.
2. d. OG doesn’t mean anything, but the others are used commonly. “FP means fireplace, WIC is short for walk in closet and SF is an abbreviation for square footage,” says Minear. “LR, DR and FR are also used for living room, dining room and family room.”
3. c. Typically, buyers will pay about two to five percent of the purchase price of their home in closing fees. “Quite frankly, people are shocked at what it costs to buy or sell a house,” says Lusk. To start, in Pennsylvania, the buyer and seller each pay one percent of the purchase price as a fee. Buyers pay title insurance. Sellers pay a six to seven percent commission. “Plus many agencies charge their buyers and sellers an additional broker fee, though my agency does not,” says Lusk. Other closing costs in the “extensive list of fees” include notary fees, overnight fees, appraisal fees, inspection fees and loan origination fees, she explains.
4. a. iv; b. i; c. ii; d. iii; e. v. “I find that the majority of my clients use a fixed-rate conventional or government-backed loan,”
says Pion. “A conventional mortgage [fixed
rate or adjustable] is one that is not guaranteed by the federal government in any way. This distinguishes it from the three government-backed mortgage types [FHA, VA and USDA].” When deciding which loan is right for you, Pion recommends analyzing your budget and talking through the process with local, trusted mortgage partners.
5. a. Relatively low-cost curb appeal improvements, like replacing your front door, are the best investments for selling. “It has been said that people make decisions on whether they like something or not from appearance in about seven seconds,” says Pion. “It is the same with your home. The decision to schedule a showing is made that fast.” Pion also warns against high-budget improvements immediately prior to selling. “I have seen many homes that were over-improved and were priced too high for a certain location. They sit on the market for a long time or the sellers end up taking a loss,” he says.
6. False. Home inspectors can inform potential buyers of defects and concerns, but there’s no such thing as a failed home inspection. “It’s ultimately up to the buyer,” says Smolizer. “But red flags are problems with the electrical, roof, HVAC and plumbing.” He also recommends that buyers go along during the inspection so they can understand how the property is working at the time of sale.
7. a. “A half bathroom has a sink and a toilet, and a full bath includes a toilet, sink and either a tub/shower combination or a separate tub and shower,” says Minear. “But a ¾ bathroom is a bathroom with a toilet, sink, and stand-up shower. No tub.”
8. False. According to the National Association of Realtors, buyers frequently offer a one to five percent increase on the value of the staged home. “I see a huge difference when I show a [staged home],” says Lusk. “When taking buyers on a tour of homes, they are always most attracted to the homes that have been staged.”
9. d. “The difference between foreclosures and short sales is night and day,” says Smolizer. “But the major difference is that a foreclosure is owned by a lender or bank. A short sale is still owned by a property owner, but they’re under water on the loan.” Still, both are considered to be “distressed properties” and potential buyers should analyze the pros and cons. “Buyers need to ask themselves, ‘Can I afford to wait up to two to four months for a sale that may not work out in the end?’” Smolizer says.
10. c. “A Comparative Market Analysis (CMA) is an analysis using similar recent home sales in the same geographic area completed by a real estate agent to establish a home's market value,” says Melchiorre. “A CMA is important when you are selling your home so that you do not overestimate, or worse, you do not undervalue, its worth,” Bowman explains.