Ms. Lank: Recently, someone wrote that one shouldn't attend an open house for decor ideas or just to be nosy. I beg to differ.
I have stopped by quite a few open houses in my area when they weren't busy, and the salesperson is always glad to chat and pick my brain about the neighborhood, schools, etc.
The open house gives me an idea of what I might expect were I to put my house on the market, and the salesperson, who may be quite bored waiting for prospective buyers, gains valuable insight and knowledge about the area.
It's a win-win for both. I tell the person right out when I walk in the door that I am a nosy neighbor so they can decide whether they have time to speak to me or not. — no signature
Answer: I agree with you.
Equity Vs. Profit
Ms. Lank: Your article on equity versus profit wrongly calculated profit. A purchase of $200,000 with a selling price later of $300,000 means the house appreciated $100,000. The profit depends on how much interest was paid on the mortgage, which must be subtracted from selling price along with purchase price and other expenses paid during ownership to derive the profit. And don't forget the Realtor fee, lawyer fee and any closing costs. — D.D.
Answer: If you're an accountant, D.D., you know more than I do about profit versus equity. But I did write, for simplicity's sake, that we would ignore expenses of buying and selling.
Equity is the amount of money one keeps invested in the real estate. It would include cash the owner had put in as a down payment, for example, as well as amortization of a mortgage and any increase in value (potential profit) since then.
What They're Called
Dear Edith: We've started house hunting, but we're not using a real estate agent yet. When we meet agents, they give us a business card, and some have all sorts of letters after the name. Can you tell us what that's about? — W. K.
Answer: First of all, real estate agents are licensed by the state. Buying real estate involves spending a substantial amount of money or taking on a lot of debt. That's why each state has set up requirements for education, examination and supervision for agents. Not just anyone can set up in real estate brokerage.
That word "agent" is a general term for anyone legally empowered to act for someone else. Until and unless you specifically hire your own agent, ones you meet will be working for sellers.
State laws vary, but almost everywhere, "salesperson" is the term for the holder of an entry-level license. The salesperson does not collect commissions directly from the public. He or she usually operates under close personal supervision and is paid, typically a percentage of commissions, by the office's supervising broker. Many veteran salespeople also choose to remain in that position rather than open their own office.
"Broker" is a legal term for someone who meets further requirements of experience, education and examination. The broker is licensed not only to help negotiate real estate transactions but also to charge (most often the seller) for services. The broker owes the principal a set of specific fiduciary legal duties, which boil down to putting the client's interests above anyone else's. A broker may set up an independent firm, but again, many prefer to remain working for others as associate brokers.
The word REALTOR (properly in all capital letters) is a made-up trademarked word that applies only to an agent who is a member of the National Association of Realtors trade organization. The word has been too successful, though, and NAR works to keep it from slipping into the language — that's how Bayer lost exclusive right to the word "aspirin" many years ago. When a supervising broker becomes a Realtor, other members of the company join as Realtors or Realtor associates.
As for those letters after the names on the business cards, they represent designations awarded after additional study in various fields of real estate or membership in specialized organizations — perhaps in property management, for example, or industrial real estate.
Mr. Lank: A few weeks back, there was a small article in your column regarding the restoration of rusted tools. Needless to say, I have misplaced it. I would appreciate it if you would please send me a copy.
And at this time, I would like to thank you for all the helpful hints you have given me. I have used quite a few. Again, thank you. — Angel.
Answer: Sorry, Angel, but perhaps you meant to write to some other columnist.
Contact Edith Lank at www.askedith.com, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.