Q: I'm in the market to sell my apartment. What's the difference between a real estate agent and a real estate broker? And what do I need?
A: Although consumers tend to use the terms interchangeably, there's a difference between real estate agents and real estate brokers.
Brokers are the people who run the offices; they have tougher licensing requirements and have been through additional classes in subjects like real estate law. They'll likely only get involved in an individual transaction when some problem arises.
Agents are the folks on the front lines. They list homes for sellers and show them to buyers.
Here are the four types of agents:
- Listing Agent. Represents the seller. Contractually, the listing agent promises the property owner to make his or her best effort to sell the property for as much money as possible as quickly as possible. Typically, they earn 6 percent of the sale price, which is generally split with the agent representing the buyer.
- Buyer's Agent. Represents the buyer. Exclusive buyer's agents work only with buyers, though today most buyers' agents also work as listing agents on other deals. They usually take in half of the traditional commission.
- Discount Agent. The same thing as a listing or buyer's agent, depending on who they're working for, but usually for 3 to 4 percent of the sales price.
- Fee-for-Service Agent. The same thing as a buyer's or listing agent, but they only work on a piecemeal basis. If you want to be listed in the local multiple-listing service, you pay one price. If you want your house shown or an agent to run an open house, you may pay an hourly rate.
Jean Chatzky’s Bottom LineThis week: Stay-at-home IRAsJust because you don't earn a paycheck, doesn't mean you can't contribute to an IRA.
If you're a stay-at-home parent or spouse, you can — and should — put $3,000 into an IRA every year (the maximum annual contribution allowed under IRS guidelines). The deductibility guidelines work the same as those for traditional and Roth IRAs.
Want evidence this is a smart move? Say a 30-year-old woman has a baby and plans to return to the workforce in seven years (when her child is in school). If she puts $3,000 a year (for those seven years) into a spousal Roth IRA that earns an annual tax-free return of 9 percent, by the time she retires at 65, she will have more than $335,000 in that account.
No matter what happens to the cost of living, that's a significant chunk of change.
Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Copyright ©2004. For more information, go to her Web site, .
PLEASE NOTE: With this column, Money MONDAY is going on vacation. Look for Jean Chatzky's next column on Monday, August 16.