Blog | Katie Zarpas Group

Real Estate Agent Vs. Broker: What is the Difference?

April 20, 2020 By Katie Zarpas

The terms real estate “agent” and real estate “broker” are frequently used as though they mean the same thing. But, in fact, they do not. Brush up on the key differences between real estate agent vs. broker.

Real Estate Agent

A real estate agent is a person who is licensed by a state to represent buyers, sellers, and renters of real estate in that state. The requirements of each state differ as to what is required for a person to become a licensed real estate agent. For example, most states require aspiring agents to undergo a minimum of training in real estate transactions. The minimum number of training hours varies significantly from state to state. In Virginia, a person must have a high school degree, or equivalent, and 60 hours of pre-licensing training. But to become a real estate agent in California, a person needs 135 hours of license coursework. In Texas, you need 180 hours.

After meeting the basic qualifications and successfully completing the required pre-licensing training, the next step is to pass a written licensing exam administered by the state’s real estate board. The exam covers state and federal real estate laws and general real estate principles. Upon passing the exam, the person becomes a licensed real estate agent. Once licensed, the agent can join a real estate brokerage and begin working with home buyers, sellers, and renters. Agents are paid on a commission based on a percentage of a property’s contract sales price.

To maintain their license, real estate agents must pay an annual licensing fee and renew their licenses every one or two years, depending on the state. Other differences between real estate agent vs. broker involves continuing education. Some states require annual continuing education courses as a condition of renewing a license.

Real Estate Broker

Broker explaining difference between real estate agent vs broker To become a real estate broker, a person must first be a licensed real estate agent and meet the qualifications for a broker’s license that are set by the state’s real estate board. In most states, a real estate agent must have been working as a real estate agent for a period of time specified by the state’s real estate board, usually two or three years. In Virginia, an agent is eligible after being actively engaged as a salesperson for 36 out of the 48 months preceding the application for licensure. Additionally, the agent may need to have recommendations from other brokers to support the agent’s application for the broker’s license.

Becoming a broker requires the agent to successfully complete the state’s broker education requirements. The education consists of coursework on advanced real estate topics involving contracts, taxes, real estate legal issues, and insurance. Aspiring brokers also learn about the complex issues they may face in operating a brokerage firm, handling real estate investments, construction, and property management. The aspiring broker must have successfully completed 180 classroom hours of approved real estate broker pre-licensing courses.

Once the agent satisfies those requirements, the agent must pass the state’s examination for a broker’s license. In Virginia, the exam can be taken in two parts. If the agent passes the first part of the exam, the agent has twelve months to take the other part.

As a licensed real estate broker, a person may choose to specialize as one of three types of brokers, depending on the role they prefer to perform:

Principal/designated broker: Each real estate office has a principal/designated broker who operates in compliance with state and federal laws and supervises licensed real estate agents. They must review all real estate contracts handled by their agents and resolve disputes with other agents. Principal brokers may receive a base salary and/or get paid on a percentage of the commissions of the sales agents they supervise. They do not usually work with clients like sales agents and managing brokers.

Managing broker: In a large brokerage firm, the managing broker oversees the day-to-day operation and transactions of the office. They hire agents, handle their training, and manage administrative staff. In smaller firms, the principal/designated broker may also serve as the managing broker.

Associate broker: An associate broker is a licensed broker but is working under the supervision of a managing broker. An associate broker usually has no responsibility to supervise other agents.

Training is also a factor when considering a real estate agent vs. broker. Becoming a broker carries important responsibilities in connection with managing and training the agents under their supervision. In Virginia, real estate brokers are responsible for overseeing their agents. If an agent violates the law and the broker takes no action on it, the broker can be disciplined by the state’s real estate board.

Contact the Katie Zarpas Group for More Information

The professionals at the Katie Zarpas Group are available to answer any of your questions about real estate or the real estate business. Katie Zarpas has many years of experience specializing in Virginia properties. Consult with the team for more information about buying, selling or renting a Virginia property. Reach out today by phone at 757-685-4400, or schedule an appointment online

How to Buy a Beach House

April 16, 2020 By Katie Zarpas

Buying a beach house is a little different from buying a home in the city or suburbs. Being aware of the differences, and of the unique circumstances that apply for a beach house, can help you understand how to buy a beach house that fits your expectations and budget.

A Few Things to Consider When Buying a Beach House

Since beach houses are closer to the ocean than inland homes, they come with their own set of factors and risks – thus, it is important to know these before buying. Here are some important things to keep in mind as you work through the process.

Will Your Beach House Be Your Primary Residence or a Second Home?

Whether a beach house will be where you live or where you vacation makes a difference in terms of financing rates, insurance rates, and in some areas, your state and local property taxes. If the beach house will be a second home for you, you will need to put more money down than you would for a primary residence, and you may find your insurance premiums and taxes are higher. Before you shop, make sure you will be able to afford those extra costs.

Will You Need More Insurance?

Due to the proximity to coastal waters and exposure to severe weather conditions, you are likely to need insurance coverage of the sort you would not need for property that is not near the beach. For example, in some locations, you may need flood insurance. Or you may find that hurricane insurance is necessary, and you will pay higher premiums and higher deductibles for a little less coverage. Will the insurance cover erosion that occurs due to extreme weather conditions? If you plan to rent your beach house to others, you will want landlord insurance as well.

Will Local Laws Allow You to Rebuild If the Home is Lost in a Major Weather Event?

Another factor to consider is whether the applicable laws will allow you to rebuild if you lose the property in a major storm or flood. In some locations, the governing authorities have determined that topography and coastal conditions have changed enough that no further building will be permitted. Once a structure in that location is lost, it cannot be rebuilt. Make sure the property you may be considering is not under those conditions. If it is, you need to factor it into the price you are willing to pay. You will need to determine if insurance coverage is even possible for such a property.

Are You Able to Keep Up with Beach Property Maintenance?

Beach properties are subjected to external conditions that other homes are not. For example, the humid, salty air can corrode paint and exterior fixtures at a much faster near the coast. Constant exposure to the sun’s heat can also cause wear to the exterior painted surfaces, leading to dry rot. If the beach house you are considering is on or near the oceanfront, you may also have frequent winds blowing sand against the exterior surfaces, which will mean more frequent painting than you might expect. Be on the lookout for damp, humid conditions that cause mold and mildew to thrive inside the home. If the home is carpeted, you will find that it does not wear as long as it would in non-beach homes.

Is There a Public Access Easement on the Property?

Make sure you are aware of any public access easements on the property you are considering. Sometimes, these beach access easements run alongside the home. Often, the easement is a beachfront easement that allows members of the public to use the beach. If the beach property you are interested in is encumbered by such an easement, you should factor the easement into the sales price you negotiate. Like any other easement that encumbers a private property, the property owner cannot interfere with the public’s use of the easement. This means you cannot block it or prevent public access to it, even if you do not like people walking by on a regular basis.

Do You Have a Real Estate Agent Who Is an Expert in Beach Property?

Buying a beach house often means you must consider factors in addition to those associated with buying a house located elsewhere. Not every real estate agent is familiar with the issues that are unique to buying beach houses. Some of the most important considerations are noted above, but those are not the only questions you need to be aware of before you make an offer. You need an agent who knows what they are doing when it comes to locating, negotiating, and closing on the sale of a beach house.

Learn More About How to Buy a Beach House

Before you begin your search for a perfect beach house, talk to the experts on beach properties. Contact Katie Zarpas Group for more information on how to buy a beach house or if you need a real estate agent to help you with your search.

Top 5 Myths About Real Estate Agents

April 13, 2020 By Katie Zarpas

Whether you’re selling your house or house hunting, you’re probably wondering whether to get a realtor. It’s also likely you’ve heard conflicting information about using one. However, most people have only gone through the process of buying or selling a home a few times throughout their life.

Top 5 Myths About Real Estate Agents

It’s very difficult to remember how everything works through such a lengthy process. Sellers and buyers should make sure they have the right information to make the process easier. Here are five of the top myths about real estate agents and the real facts behind them.

The Classic 6% Commission Myth

The most common myth about real estate agents is that they get a 6 percent commission when a house is sold. This percentage is actually split between the two agents and brokers, for a four-way split. That means on a $200,000 home sale, the realtor will get about $3,000 from the total $12,000 in commission.

Breaking up With Your Broker

As a seller, you may have signed a contract to use a real estate agent and their broker to help sell your home. Contracts have terms, and many sellers tend to think they are stuck using the agent the entire time. However, it’s possible to ask to be released from your contract early. Especially if there are challenges with the relationship, it doesn’t hurt to ask.

For buyers, it is rare to enter a contractual relationship with an agent. A buyer’s agent is working for free until you find a home and is paid on completion of the sale. A buyer’s agent should be motivated to help you find the right house for you, the most difficult part of the home buying process.

An Agent Can Represent Both Parties

The seller’s agent has a vested interest in getting the best terms and price for the seller. If you’re a buyer, that directly conflicts with yours. Don’t assume that you don’t need an agent because you have the technology available to help you find a home. Technology has changed the real estate market without a doubt, however this is no substitute for industry experts.

Your smartphone can show you what property listings are available on-demand. But a great buyer’s agent will prove to be a true advantage in your home buying success. This is especially true if you are new to the area or buying for the first time.

A buyer’s agent will have expertise and knowledge of the local market you won’t find on an app. Having a local connection will get you access to the best experts available. Lenders, inspectors, and other key players who have been vetted by a buyer’s agent will be available to work on your side.

No Agent is Better than Any Other Agent

When you hire someone to repair your car or cut your hair, are you comfortable working with just anyone? Probably not. You want someone that you trust and can get the job done right.

It’s the same as working with a great local agent. When you have the right agent it will pay off by saving you money and time. They will have vast knowledge in the local market and be able to find the right areas based on your needs.

An agent that’s worked in the area will have established and deep relationships with other agents. Look for an agent with at least eight years’ experience which is the median amount according to the National Association of Realtors membership report. Experienced agents will have access to insider information first, such as upcoming opportunities or deals being reached. That information can be used to get you access to a new listing first or know what properties to avoid.

Buying Agents Can’t Work With Owners Selling Their Houses

The fifth myth of the myths of real estate agents is that working with one means you can’t buy a home that’s for sale by owner (FSBO). Only 5 percent of homes were sold by FSBO from data from a 2020 Home Buyers and Sellers report. The main reason that owners try to sell their homes themselves is to avoid paying commission.

However, an informed seller knows that the real estate process is complicated. The majority of buyers have their own agents and FSBO sellers are usually willing to work with them. So you should feel comfortable asking your agent to help if you see an FSBO home that you’re interested in.

FSBO sellers will usually compensate an agent as an incentive. As an added benefit, the seller will also be able to take advantage of the agent’s experience.

The Zarpas Team is not a Myth, but Here for You Right Now!

The Katie Zarpas Group has experience in navigating the real estate space and can help you get the information you need to buy or sell a house. No need to worry about the myths about real estate agents here! Contact Katie Zarpas Group today for more information or to start the home buying or home selling process!

Pros and Cons of For Sale by Owner

April 9, 2020 By Katie Zarpas

In most home sales, people hire a real estate agent to help them sell. However, nothing requires anyone to use a real estate agent to sell their home. Selling your home without a real estate agent means you are selling it yourself. As such, your home will be designated as “for sale by owner” (“FSBO”). The primary reason people choose to put their home on the market as FSBO is they believe they will save money on the real estate agent’s commission.

Often, however, they underestimate what is involved in selling a home. There are significant reasons why it makes sense to work with a real estate agent, meaning that a real estate agent can save you money and headaches in the long run. Working with a real estate agent instead of doing FSBO is more efficient and professional, and it yields better results.

Here are just a few important pros and pitfalls (and there are many) to consider before you list your house FSBO.

Pros of For Sale By Owner

No Commissions

Real estate agents are paid on average 6% of the sales price as their commission. If your home sells for $300,000, the real estate agent will get $18,000. That leaves $282,000 to pay off the loan balance, cover other closing costs, fees and outstanding taxes. Without an agent, the seller will be able to pocket more of whatever is left.

Control Over the Listing Price

Without a real estate agent, you will have complete freedom to set your asking price at whatever point you like.

Control Over the Scheduling

Selling your home can be a major disruption to your schedule. Agents sometimes give you very little notice when they are in the area with an interested client. If you are not home, they will simply let themselves in to look around. Without an agent, you will have more flexibility when it comes to when people can come in to look at your house.

Cons of For Sale By Owner

Listing Price Based on ???

A local real estate agent knows the market. The agent can make solid recommendations on a sales price that is likely to bring in reasonable offers. Without that expertise, you won’t know if your listing price is too high or too low. If the price is too low, you may have been better off working with an agent and paying the commission. If the price is too high, you may not have many interested buyers bothering to look at it. In many cases, homeowners are more likely to base your price on their “feelings” of what the price should be and not what the market can bear.

You Will Not Have the Resources to Screen Potential Buyers

Before an agent shows your home to a potential buyer, the potential buyer has been screened to ensure that the buyer has been prequalified for the loan needed to buy the home and has the ability to pay. You may waste a lot of your time with people who are not in a position to buy your home. Also, homes that are for sale by owner are stigmatized – they rightly or wrongly are viewed as having a problem, otherwise they would be listed with a reputable agent.

You Could Leave Money on the Table by Handling the Contract Negotiations Yourself

When someone is interested in your home, their real estate agent helps them come up with an offer. The offer is relayed to your real estate agent, who then helps you decide whether to accept it or make a counteroffer. This back and forth is the negotiation process. The real estate agents have extensive training in these negotiations. They know how closing costs, points, and other elements involved in a sale can be negotiated to make a sale happen at a reasonable price point. Without an agent, this important aspect of the sale will fall on your shoulders.

If the interested buyers do not have an agent either, neither of you will benefit from the expertise an agent can offer. This is a situation that can result in disappointment and even disputes that can be costly to all sides. In such cases, the parties should work with the help of a lawyer, which can end up costing you as much as the real estate commissions you were trying to avoid.

You Have to Be Ready for Closing

Once you have a ratified sales contract with an agreed-upon sales price and terms, you will have to get ready for closing. The contract may require the seller to make certain repairs to the home and pass inspections. The real estate agent is instrumental in coordinating all of that. The buyer will have to get an appraisal. If the appraisal does not show a value that meets the requirements for the buyer’s financing, the buyer will have to put more money down out of their pocket. If they cannot do that, the sale will not close, and the whole process must start over again.

Contact Katie Zarpas Group For More Information

Before you list your home for sale by owner, consult with the experts at Katie Zarpas Group. They are happy to discuss selling your home FSBO in detail. If you choose to work with an agent and avoid the pitfalls of the FSBO process, our licensed Virginia Beach real estate agent, Katie Zarpas, is standing by and ready to help you.

Buying a Beach House: What You Need to Know

April 7, 2020 By Katie Zarpas

Buying a beach house is fun and exciting. But if you overlook some important considerations, your dream could turn into a nightmare.

Things to Consider When Buying a Beach House

When you buy a house by the ocean, the process is similar to buying a home anywhere else, but it requires very careful thinking about some matters that are uniquely important considerations for beach-front homes. Here are some things you need to think long and hard about before you make a purchase:

Location

If you plan to rent your beach house, you will attract more renters and command more rent if it is on the beach, or at least within viewing distance or walking distance. If being that close is not possible, try to be close to something else, such as popular eating spots, public transportation, or something that will make it competitive.

Insurance

Owning a beach house in close proximity to the water is good for rental and for resale value, but it will likely increase your flood risks and insurance rates. In fact, you should expect your homeowner’s insurance rates to be higher than you may be used to paying.

In some places, flood and hurricane insurance may be required by your lender, and in other cases, you may not be able to get the necessary insurance. This is information you need to know before you begin looking at beach houses in any given area.

If you have found a home you like, note whether it is located in a high-risk flood zone. Even if it is not, your lender may still require flood insurance. Flood insurance is expensive. A beach home in Florida may command flood insurance premiums of $10,000 or more. Be sure to speak with an insurance agent about what you should expect to pay. (In fact, it pays to shop around for the best insurance rates).

Weathering

Near the ocean, a house will be subject to grueling winds with pelting sand and saltwater. This acts as corrosive sandpaper against the home’s siding. Make sure the siding and the roof are able to withstand the unrelenting weather. If you can find a beach house with a fairly new roof, that is a major plus. Replacing a roof can cost around $25,000. Even better if the roof is metal. Metal roofs are very durable and highly wind-resistant.

If the area is prone to flooding, you will want a beach house built on stilts. The home’s construction materials should also be wind and flood-resistant. Concrete is best able to hold up to high winds, rains, and high temperatures.

Another aspect of the home’s ability to withstand severe coastal weather is the windows. In some locations, building codes for new homes require “hurricane-proof” windows. The windows in older homes, however, may not comply with updated building codes for windows. Hurricane windows are expensive, but they are worth the investment. They will help protect your home, and they will lower your insurance expenses.

Wear and Tear

Keep in mind that renters will not treat your property with the same care that you will. Think of ways to keep damage to a minimum.

At the beach, people will have lots of outdoor gear. Make sure the house has a place to store it all, such as bikes, beach chairs, beach toys, and so forth.

Along those lines, think about how the house will stand up to a beach lifestyle. People will be tracking in sand and saltwater, so think about an outdoor shower of some sort where people can rinse feet and beach shoes to keep it to a minimum. Have a convenient place outside to hang wet towels and sandy swimsuits, too.

Property Management

Consider whether you will be able to keep up with renters, maintenance, and cleaning yourself, or whether a property manager would be better for you. If you are not planning on living nearby, or if you expect a lot of turnovers, a property manager is likely preferable to trying to do it yourself. The expense of a property manager is likely well worth the money. Depending on your financial situation, you may be able to deduct the expenses.

A property manager will also manage the deposits, rental agreements, and other aspects of the landlord-tenant relationship for you in a way that complies with applicable local laws. If you have a tenant that leaves the property heavily damaged, the property manager can get it back in shape quickly so that you are not left with a vacancy for any longer than needed.

Contact Katie Zarpas Group For Information on Buying a Beach House

When you are thinking of making an investment in a beach house, you want to work with the experts. The professionals at Katie Zarpas Group are known for their expertise in beach house properties. Contact us for more information and to get help from our experienced waterfront property agent, Katie Zarpas.

Real Estate Mistakes To Avoid After A Divorce

March 30, 2020 By Katie Zarpas

Selling your home during a divorce can add a lot of stress to an already stressful situation, leading to avoidable real estate mistakes. Emotions are often running high. It helps to have the assistance of an experienced and objective real estate agent at your side to help you make rational business decisions in connection with the transaction.

Top 2 Real Estate Do’s and Don’ts After A Divorce

Without help, it’s easy for divorcing couples to make real estate mistakes that cause the house to linger on the market, unnecessarily complicate the sales transaction, and adversely affect how well the home looks to potential buyers. The result is the home sells for less than it should. Here are a few do’s and don’ts to help you avoid those real estate mistakes:

DO: Work With an Experienced Real Estate Agent

When you contract with an agent to sell your home, make sure the agent has experience with divorcing homeowners. Some agents receive special training on transactions in properties during a divorce. An agent with that kind of experience will know where issues typically arise and how to avoid or minimize the associated stress. Such an agent will know how to coordinate meetings and showings with both divorcing spouses. They know how important it is to communicate with both parties to keep everyone informed of important developments, and to prevent real estate mistakes.

Working with an experienced agent to get the best price possible for the property also means disclosing any court-ordered details regarding the property or the sale before listing it. To be effective and efficient at selling the property, the agent needs to know about all stipulations regarding the sale and the responsibilities of both parties. The agent needs to know, for example, which spouse has the court-approved authority to act on behalf of the couple. It will usually be the spouse living in the home. The agent also needs to know the listing price if it is spelled out in the court’s order, and who is authorized to reduce the price if necessary. Some court orders may cover which spouse is responsible for home repairs and how to get approval for those costs.

DON’T: Let Home Maintenance Slip

When one spouse moves out and the other is busy trying to juggle a job, child care and taking care of the house, home maintenance and repairs can pile up. Keeping up with all of that while struggling through a divorce can be overwhelming. That is especially the case if a court order has imposed constraints on the number of expenses it will require and requires both spouses to consent. However, falling behind on simple repairs and basic upkeep is important to get a good selling price.

DO: Stage the Home, Especially if it is Unoccupied

Ideally, one of the spouses will stay in the house until it sells. The spouse should try to make it appear as though both spouses are still living there. If buyers sense a divorce sale, they are likely to suspect the home can be bought at a fire sale price point. That will only encourage low-ball offers.

If no one is living in the home, it is best to leave some furnishings so that it will not appear empty. Homes generally sell better if they are at least lightly staged. Empty homes or homes with a few items left behind a helter-skelter can impair the home’s marketability.

If you can afford a professional stager, it may be worth the expense. A professionally staged home helps the house sell quickly and for a good price.

Whether lightly staged or staged professionally, a furnished home can help buyers picture themselves living in it, and a well-staged home can even help make the rooms seem bigger.

DON’T: Overlook Your Capital Gains Tax Break

Before you list the home for sale and finalize your divorce, make sure you review the tax consequences with a CPA or your attorney. If possible, you want to plan a sale by timing it to minimize your capital gains tax liability and preserve the exemption in the divorce.

As you may have heard, the capital gains tax is a tax that you pay on the profit you receive from selling a capital investment. Your home is such a capital investment.

If you sell your house while you’re still married, each spouse can exclude the first $250,000 of profit (or gain) from your taxable income (for a total of $500,000). If you sell the house while you’re in the midst of a divorce, you can exclude from tax the same amount of $500,000 of gain, provided both spouses lived in it for two of the five years before the sale.

This tax exemption can be affected by factors such as the timing of your divorce filing, the date your home is sold, whether both spouses co-owned the house even though only one lives there, or whether one spouse buys out the other half of the house. Make sure you don’t inadvertently overlook these details.

Contact the Real Estate Team at Katie Zarpas Group for More Information

The real estate agent at the Katie Zarpas Group is experienced with helping divorcing couples sell their home and prevent real estate mistakes. They know how to ensure a smooth process with minimal stress on both parties while extracting the best possible price for the home. Schedule an appointment today for more information.