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Frequently Asked Questions
(FAQ's)

What is the difference between a real estate agent, a real estate broker, and a REALTOR?

dot Who does the agent represent and who pays for my agent?

dot What is the difference between an appraisal and an inspection?

dot What is earnest money?

dot What is the difference between a mortgage banker and a mortgage broker?

dot What is the difference between being pre-qualified for a mortgage and being pre-approved?

dot What is a property disclosure statement?

dot Can a REALTOR help me purchase a FSBO?
(for sale by owner)

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What is the difference between a real estate agent and a REALTOR®?
A real estate agent is a person licensed by the state of North Carolina and the North Carolina Real Estate Commission.   A REALTOR® has taken the additional steps to become a member of the National Association of REALTORS® and has agreed to act under and adhere to a strict Code of ethics.  This membership obligates REALTORS® to be fair to all parties involved in a transaction.

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Who does the real estate agent represent?
In North Carolina an agent may represent the Buyer or the Seller, or both.  A real estate agent must tell who he or she represents in a prospective transaction at the time of your first personal meeting to discuss a specific property or properties. 

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What is the difference between an appraisal and an inspection?
According to the Appraisal Institute, the role of the home appraiser is to "provide a professional opinion, usually an estimate of market value, to be used in making real estate decisions." Typically, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction. An appraiser hired by a lender works in the best interest of their client, the lender.

A home inspection is an objective visual examination of the physical structure and systems of a house. Home inspectors are usually employed by the prospective homebuyer. A home inspector hired by a buyer works in the best interest of their client, the homebuyer. An appraisal is not a home inspection and a home inspection is not an appraisal. Keep in mind that the approval / acceptance of a home by a lender is not an endorsement of the home's physical condition.

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What is earnest money?
Typically when an offer to purchase a house is made the buyer will also pay an “earnest money” deposit to show that he or she is serious about buying the house.  The sales contract will dictate who holds the earnest money.  Usually the seller’s real estate agent will deposit the earnest money in a trust or escrow account until closing.   At closing, the earnest money is applied to the purchase price.
In the event the sale doesn’t close, the sales agreement generally spells out the conditions under which you would forfeit the earnest money.  Generally if the seller meets all the terms of the contract, the seller will keep the earnest money.  If the seller does not meet the terms of the contract, you, as the buyer, may receive a total or partial refund of the earnest money. 

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What is the difference between a mortgage banker and a mortgage broker?
A mortgage banker works directly for a bank or lending institution.  A mortgage broker has access to loan programs of many different banks or lending institutions.  It is a personal decision to whether someone uses a banker or a broker.

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What is the difference between being pre-qualified for a mortgage and being pre-approved?
A pre-qualification is normally issued by a loan officer, who, after interviewing you, determines the dollar value of a loan the borrower can be approved for. However, loan officers do not make the final approval, so a pre-qualification is not a commitment to lend.
Pre-approval is a step above pre-qualification. Pre-approval involves verifying credit, down payment, employment history, etc. The loan application is submitted to an underwriter and a decision is made regarding the loan application. If the loan is pre-approved, a pre-approval letter is given.

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