FAQ

Frequently Asked Questions

Whether a first-time buyer or expert homeowner, you have questions we can answer.

Realtor questions

What is a Realtor®?

A Realtor® (with a capital R) is a licensed real estate agent who is also a dues-paying member of the National Association of Realtors® (NAR — the country's largest trade Association for real estate professionals). Not every licensed agent is a Realtor® — membership means voluntarily agreeing to uphold a strict Code of Ethics that goes above and beyond what Arkansas state law requires. In Arkansas, all agents are licensed through the AREC (Arkansas Real Estate Commission), but Realtors® have made an additional professional commitment. Think of it like the difference between a licensed contractor and one who belongs to a guild with a strict code of professional conduct.

How much does it cost to have a Realtor®?

Realtors® are self employed, independent agents and they may charge slightly different rates depending on where they are, which brokerage their license is held with, and the method by which you were connected to each other. Rates can be either a flat fee or a percentage of the purchase price. Regardless of the rate, customers will know up front what their Realtor® is going to charge on a transaction so that there are no surprises at the closing table. For buyers, this is established on the Buyer Agency Agreement. For Sellers it is on the Listing Agreement.

Who pays my Realtor® as a buyer or seller?

If you are a buyer, then your Realtor’s fee will be part of the negotiations on the purchase of your home. The seller may have agreed to pay a portion of a buyer agent fee when they signed the listing agreement. If, for example, a seller agreed on their listing agreement to provide 3.0% of the purchase price to a buyer agent but your Buyer Agency Agreement is set at a 3.5% rate - then you are only responsible for the difference. At closing, the title officer will have a line item debited to you as the buyer of .5% of the purchase price. If you are selling a home, your Realtor® should have discussed fees with you at a listing appointment. As a seller, you have the option to not offer anything toward a buyer’s Realtor®. However, there may be less buyers that have cash reserves to cover everything plus their Realtor®. This could affect the amount of offers you receive or how long your home is on the market.

What is a professional fee?

A professional fee is generally a charge that the Realtor® is incurring from their brokerage. That money goes to the company to offset costs associated with insurances the brokerage provides, office locations, marketing materials, compliance softwares, broker supervision, MLS access, and any number of other costs associated with just trying to do business.

Finance questions

What does it mean to be pre-approved?

Getting pre-approved means a lender has reviewed your actual financial information — income, debts, credit score, and employment history — and issued a letter stating how much they're willing to lend you. It's like getting the green light from the bank before you start shopping. Sometimes a seller may request pre approval letters at the time an offer is made, or maybe even before scheduling a showing in order to provide assurance that the buyer will be able to close.

What does it mean to be paying cash?

Paying cash means you're purchasing the home without a mortgage — you have the full purchase price sitting in a bank account that can be liquid within the contract’s time constraints. This can be an investment account or 401k but it has to be available to give to the title company on closing day. Cash buyers are very attractive to sellers because there's no lender involved, which means fewer steps, fewer things that can go wrong, and a potentially much faster closing.

What is my purchase budget?

Your budget isn't just the price of the home. It also needs to include closing costs (typically 2–5% of the purchase price), moving expenses, any immediate repairs or updates, and ongoing monthly costs like property taxes, homeowner's insurance, and HOA (Homeowners Association) fees if applicable. Your lender will determine the maximum you qualify for — but your comfort zone may be a different, lower number. We always recommend buying within what feels right for your life, not just what the bank says you can technically afford. There are down payment assistance programs that you may qualify for, or loan products with lower or no down payments. This is something that a Realtor® will most likely direct you to a lender in order to answer and decide based on your financial situation.

What are “certified funds”?

Certified funds are a guaranteed form of payment — like a cashier's check or a wire transfer — that confirm the money is real and immediately available. At closing, the title company will require certified funds rather than a personal check, because they need to know those funds are guaranteed before they hand over keys. Your lender and title company will give you exact instructions on the amount and how to deliver it before your closing date.

When should I have a pre-approval?

Before you start seriously looking at homes! In a competitive market, great homes can receive multiple offers within hours of listing. If you fall in love with a house and you're not pre-approved, you may not be able to move fast enough to make an offer — and you could lose it. Think of it like having your shopping cart ready before the big sale starts. Another reason it’s important to have a pre-approval before you start looking at homes is that your conversation with the lender may change the properties that you go see. Monthly payment estimates on real estate websites can’t factor in things like interest rate, homeowners insurance, and other things that are specific to you. Your loan officer should show you a loan estimate with monthly payment options and details about their fees so that you can go into home shopping with a complete picture of what you need and what it will cost.

What are the differences in types of home loans?

There are several common loan types. A Conventional loan is not government-backed and typically requires better credit and a larger down payment (usually 5–20%). An FHA (Federal Housing Administration) loan is government-backed and allows lower credit scores and down payments as low as 3.5% — popular with first-time buyers. A VA (Veterans Affairs) loan is available to eligible veterans and active military, often with no down payment required at all. A USDA (United States Department of Agriculture) loan is for properties in eligible rural areas and can also require zero down payment, but that is heavily based on the property address. Your Realtor® will be able to help you navigate which homes meet the criteria for different loan types, and your lender will help determine which loan type fits your situation best.

What is PMI (Private Mortgage Insurance)?

PMI (Private Mortgage Insurance) is an extra monthly fee added to your mortgage payment when you put less than 20% down on a conventional loan. It protects the lender in case you default. If you take out an FHA loan, then it may be there for the life of the loan unless you refinance.

Buyer questions

What is a Buyer Representation Agreement?

A Buyer Representation Agreement (BRA) is a contract between you and your agent that outlines what services the agent will provide and how they will be compensated. Since August 2024, this agreement is required before anyone can show you homes — it's an industry-wide rule mandated by the Department of Justice. This ensures total transparency about what you're agreeing to, and it means your agent is fully committed to working in your best interest. The agency agreement will detail which homes they’re hired to represent you. It could be just one address, or it could be a more broad search area. It may be for a time frame of a few months, a few weeks or a year depending on how long you plan to be searching for and buying homes. It’s important to know that if a Realtor® has an agency agreement with you and shows you homes, then that agreement establishes intent for them to represent you if you decide to purchase that home. This means that you can’t sign an agency agreement with one Realtor® to get a showing and then have another Realtor® write your offer and work on the purchase. That’s like asking someone to change your oil for free because the mechanic you typically visit is closed. In that same vein - if the person that represents you is out of town and you need to get into a property to see it and are worried that you may not have time to wait for them, then communicate that with us. We can’t speak for all Realtor®s by any means, but with our team there are multiple agents that can step in and take you to a showing without being in conflict with the agency agreement.

How do I know what to offer on a house?

You should offer based on the conversations you’ve had with your lender; but you, the lender, the Realtor® - you’re all on a team for the purpose of helping you get a home for a price that makes sense for you. The loan estimate will help you see how much a payment might be at a particular purchase price/down payment scenario. If you’re paying cash and you don’t have a lender, then your source of insight is your Realtor®. They’ll be able to give you some advice as to what they’re seeing with the market and can put together a CMA on a property to see if the asking price matches the market. Your Realtor® should also be having conversations with your lender to make sure that the offers they write align with what the lender is seeing that you need based on your financials. So, always make sure that your Realtor® has contact info for your loan officer.

What is earnest money?

Earnest money is a sum of money held at the title company after your offer is accepted — it's your way of saying "I'm serious about this purchase." In Arkansas, this is typically around 1% of the purchase price, though it can vary. The good news: if everything goes well, it gets applied toward your down payment or closing costs at closing, so it's not extra money out of pocket. If the deal falls apart due to a contingency (like a failed inspection or financing issue), you typically get it back. If you back out without a valid contract reason, you may lose it — so it's a commitment, not a fee. A requirement of earnest money is somewhat rare in Arkansas. You will definitely see it if you’re looking at foreclosures because the owner of those properties is out of state, where earnest money is mandatory.

What is a contingency?

A contingency is a condition that must be met for the contract to move forward. Common ones include a financing contingency (your loan must be approved), an inspection contingency (you want the home inspected to ensure that you want to proceed), and an appraisal contingency (the home must appraise at or above the purchase price). Contingencies are your safety net — your built-in exit ramps if something doesn't work out.

Specifically, the word “contingency” on an Arkansas Real Estate Contract (the offer) refers to a home that you must sell in order to be able to purchase the home you’re offering on. If the bank has determined that your down payment and your monthly income require that you sell the home you’re in, then the offer must lay out which property that is, and by when it will be sold. Unfortunately, we do have to guess because there’s no way of knowing the future. However, your Realtor® should have a good idea of how long properties are on market (unless the home you’re selling is in another market) so they can establish a date in the future for when that could be settled. You can close on a sale and a purchase in the same day. You can have time in between. But, on an offer if you have a property sale contingency then you will also have to establish if there is an escape clause or not.

An escape clause gives the seller the opportunity to move on to another buyer that does not have a contingency. If your home doesn’t have a contract and a new buyer offers without a contingency, then you will be notified and given a set amount of time to see if you can remove your contingency before that time is up. If you cannot, then the contract may be terminated and you’ll need to start looking at homes again for purchase. If you can remove your contingency - because there’s a financial solution or because you do get a contract on the home you’re selling - then a new close date will be proposed and everything proceeds.

A second option does exist for there to not be an escape clause. This would mean that regardless of what offers come in during your contract, the seller can’t terminate for that reason. If you ran out of time and your home didn’t sell before the proposed date on the offer then the seller can choose not to extend.

How long does it take to buy a home?

From accepted offer to closing, the typical timeline with a mortgage is 30–45 days. Cash deals can close much faster — sometimes in as little as 1.5–2 weeks. The timeline depends on your lender's speed, the title company, inspection scheduling, appraisal timing, and any negotiations that come up along the way. We will keep you on track at every step and make sure no deadlines are missed.

What is a home warranty?

A home warranty is a service contract — usually good for one year — that covers the repair or replacement of major home systems and appliances, like HVAC, plumbing, electrical, etc. Sellers sometimes offer one as an incentive or you can add one to your contract so that it’s included in your closing costs. They can be a nice safety net, especially for older homes. If the home is new construction, it may come with a warranty from the builder for the structure and various components. A warranty does not replace homeowners insurance, but it does sometimes cover things that insurance does not.

What is a final walkthrough?

Your final walkthrough is your last chance to view the property before closing — typically within 24–48 hours of your closing appointment with title. The purpose is to confirm the home is in the anticipated condition for you to close, that any agreed-upon repairs have been completed, that nothing catastrophic has occurred (such as vandalism, a fire, tree fall, etc.) and that the sellers haven't taken or removed anything they weren't supposed to. It's not another negotiation — it's a verification. Never skip it!

Seller questions

How do I know what my home is worth?

We will prepare a CMA (Comparative Market Analysis) — a detailed look at recently sold homes similar to yours in your neighborhood and price range. This isn't an official appraisal, but it gives you a strong, data-driven starting point for pricing your home. Pricing is both science and art: list too high and your home sits on the market and gets stigmatized; list too low and you leave money on the table. Our goal is to get you the most money in the least amount of time.

What is a Seller's Property Disclosure (SPD)?

The SPD (Seller's Property Disclosure) is a document in Arkansas where sellers disclose known material facts and defects about the property. Under AREC (Arkansas Real Estate Commission) rules, this form must be delivered to the buyer early in the transaction if one is required per your contract. You're required to disclose things like past water damage, foundation issues, easements, insurance claims, roof condition, and any known mechanical problems. Think of it as a "what do you know about this house?" form — and the key word is "known." You're not expected to be a home inspector, but you are required to be honest about what you're aware of. This includes what companies service the utilities and who your contact is if you have a homeowners association or any neighborhood fees or amenities. If a seller has never lived there (meaning they bought it to renovate and resell, or it had been occupied by a tenant or someone besides the seller), then they are not required to complete this form. They and their Realtor® still have to disclose what they know about the property, they just don’t have to complete this form.

What should I do to prepare my home for sale?

First impressions are everything — both online and in person. Focus on curb appeal, decluttering every room, deep cleaning, and addressing any obvious repairs. Your Realtor® will walk through the home with you and give you a priority list. Sometimes small, affordable investments — fresh paint, updated light fixtures, professional photography, putting out of season items in storage — make a significant difference in how quickly the home sells and at what price. We'll create a custom plan together.

What is staging?

Staging is the process of arranging and presenting your home to appeal to the widest range of buyers. It might mean rearranging furniture, removing personal photos and collections, adding neutral décor, or in some cases, bringing in rental furniture for vacant homes. The goal is for buyers to picture themselves living there — not to see your life. Staged homes statistically sell faster and for more money

Do I have to be home during showings?

No — and in fact, it's strongly recommended that you're not! Buyers tend to feel more comfortable exploring the home, opening closets, and having honest conversations with their agent when the owner isn't present. Plan to step out (and take/kennel your pets) during any scheduled showings. If it is difficult for you to get out, or you work from home and need to have an active desktop - don’t worry - we can ensure that everyone is aware and prepared for that.

What repairs am I required to make after an inspection?

In Arkansas, sellers are not automatically required to make any repairs simply because a buyer requests them. After the inspection, the buyer may submit an IRSA (Inspection Response and Settlement Agreement) — an Arkansas-specific form used to negotiate repairs, seller credits, or price reductions. As a seller, you can accept their requests, counter with something different, or decline entirely. If you and the buyer can't reach an agreement, the buyer typically has the right to walk away and get their earnest money back. They may also present an addendum with an another suggestion if they don’t approve of the seller’s repair response but also don’t want to walk away from the purchase just yet.

What is a termite clearance letter?

Due to the humid conditions in Arkansas, most lenders require a termite inspection and clearance letter before closing. Sometimes a buyer will also just want one for themselves - even if they’re paying cash. This is a document issued by a licensed pest control company confirming the property has no active termites. It's typically required to be delivered a few days before closing, but they are good for 30 days. If termites are found, treatment is sometimes required before closing. We will make sure this is on the radar well before your closing date.

What is the difference between list price and sale price?

Your list price is what you're asking a buyer to pay for the home. Your sale price is what you actually agree to sell it for after negotiations. Depending on the market, the sale price might be equal to, higher than, or lower than your list price. In a seller's market, homes sometimes sell above list price due to multiple offers. Our job is to help you price strategically from the start so you attract strong offers without having to chase the market.

What happens to my mortgage when I sell?

When your home sells, your existing mortgage is paid off at closing using the proceeds from the sale. The title company handles this automatically — you don't write any checks. Whatever is left after paying off your mortgage, your agent's commission, closing costs, and any other fees or liens paid at closing - those are your proceeds. This can be wired to your bank account or applied to your next purchase. We will prepare an estimated net sheet (a simple estimate of what you'll walk away with) early in the process so you know what to expect.

Contract questions

What is an appraisal?

And what is an appraisal gap? An appraisal is an independent assessment of a home's market value, ordered by your lender (or the buyer’s lender if you’re the seller) to make sure they're not lending more than the home is worth. A licensed appraiser visits the home, reviews comparable sales, and issues a formal report. An appraisal gap occurs when the appraised value comes in lower than the agreed-upon purchase price. For example, if you agreed to pay $300,000 but the home appraises at $280,000, there's a $20,000 gap. Options include renegotiating the price, the buyer paying the difference out of pocket, or — depending on your contract terms — walking away. Depending on the type of appraisal, that low report could affect future buyers if you decide to terminate. Some appraisals are valid for 6 months.

What is an inspection?

A home inspection is an examination of the property's condition. Arkansas Real Estate Contracts allow for a buyer to self inspect, hire the inspector of their choosing, or they can waive an inspection. An inspector evaluates the roof, foundation, electrical system, plumbing, HVAC (Heating, Ventilation, and Air Conditioning), and much more. At the end, you receive a detailed written report. It's not a pass/fail test — it's information. Think of it as a physical exam for the house before you commit to buying it. Even brand-new construction benefits from a third-party inspection.

What do I need to do to prepare for an inspection as a seller?

Make sure all utilities are on — gas, electricity, and water. Clear access to the attic, crawl space, electrical panel, water heater, and HVAC (Heating, Ventilation, and Air Conditioning) equipment. Replace any burned-out light bulbs (inspectors flag these as potential electrical issues). Make sure that toilets are tight to the floor. If you have a pool, outbuildings, or a detached garage, make sure those are accessible too. The more open and accessible the home is, the smoother — and faster — the inspection goes. We will send you a prep checklist when the time comes.

What does it mean when a property is being sold “as is”?

"As is" means the seller is not willing to make any repairs or provide any credits based on what an inspection uncovers. The buyer can absolutely still inspect the home — and still has the right to walk away if they don't like what they find. But the seller is essentially saying "what you see is what you get — no negotiations on condition." This is common in estate sales, foreclosures, and deeply discounted properties. It doesn't mean a home is a bad deal — it just means your eyes need to be wide open going in. Sometimes a seller needs the transaction to be “as is” because they’re not local, in poor health, or may have some other extenuating circumstance. It’s always recommended to inspect, even if it’s just for discovery purposes.

What is an IRSA (Inspection Response and Settlement Agreement)?

The IRSA (Inspection Response and Settlement Agreement) is an Arkansas-specific form used after a home inspection to negotiate between buyer and seller. After reviewing the inspection report, the buyer lists the items they want addressed — whether that's specific repairs, a seller credit toward closing costs, or a price reduction. The seller then responds: accept, counter, or decline. Both parties have set timeframes to respond (defined in the original contract), and if an agreement can't be reached, the buyer typically has the right to walk away and receive their earnest money back. This may be the most impactful form that we have in the contract process. It keeps inspections and repairs timely and specific so that everyone understands what and when things are happening.

What does "under contract" mean?

When a home goes "under contract," it means the buyer and seller have both signed the purchase agreement and a closing date has been set. The home is generally no longer available for new offers, unless the status is “taking backups” and the clock starts ticking on all the deadlines — inspections, financing approval, appraisal, and closing. You'll sometimes see homes listed as "pending" on real estate websites, which means the same thing but just may be a different term due to varying procedures across the country.

What is a Lead Paint Disclosure?

Federal law requires that sellers of homes built before 1978 provide buyers with a Lead-Based Paint Disclosure form. This discloses any known lead paint hazards on the property and gives buyers a 10-day window to conduct a lead paint inspection if they choose. We will make sure this is handled properly and on time — it's a federal requirement, not optional. A lot of the time, a home has been repainted since 1978 so lead paint may not be visible or accessible, but it could still be there were you to start major renovations and replace windows or rip out walls. Lead paint is really dangerous if ingested so this disclosure provides some consistency around making everyone aware.

What does "contingent" mean on a listing?

A "contingent" listing means the home has an accepted offer, but the contract still has conditions — contingencies — that must be met before it's truly locked in. Examples include a financing contingency (buyer still needs final loan approval) or a home sale contingency (buyer needs to sell their own home first). Contingent homes sometimes fall back on the market if a contingency isn't met, so it's worth keeping an eye on them. This is usually just another status that indicates that a home is under contract with an accepted offer from a buyer.

Closing questions

What is a closing?

Closing is the final step in a real estate transaction. It's when ownership of the property officially transfers from seller to buyer. Both parties (or their representatives) sign a stack of legal documents, money changes hands, the lender funds the loan, and keys are exchanged. In Arkansas, closings are typically handled by a title company or real estate attorney. It's the finish line — and honestly, one of the best moments in the whole process.

What are closing costs and how much should I expect to pay?

Closing costs are the fees and expenses associated with finalizing a real estate transaction — separate from the purchase
price itself and any down payment that your lender may require. As a buyer with a mortgage, expect to pay roughly 3% of the purchase price in closing costs, which can include lender origination fees, title insurance, attorney fees, recording fees, and prepaid items like homeowner's insurance and property taxes for escrow. We will request that the seller pay the buyer agency fees for your Realtor® representation as a buyer. It’s part of the negotiations and you’ll know how much they agree to cover on your behalf, if any. Your lender will provide a Loan Estimate document early in the process so you won't be surprised.

How many times do I get to see the house I am buying before closing?

In most transactions, you'll see the home 2-3 times before closing: your initial showing, then during the inspection after your offer is accepted, and a final time for your walkthrough (typically 24–48 hours before closing). If there were repairs requested, you’ll want to confirm that they were completed at your walkthrough before you go sign the closing documents with title. The final walkthrough isn't for second thoughts — it's to confirm everything is as it should be.

Always do your walkthrough.

When can I move in?

Your move-in date is determined by the "possession date" agreed upon in your purchase contract. In most Arkansas transactions, possession happens at closing — meaning you get the keys the moment you sign. Occasionally, sellers may need a day or two after closing to vacate (called “delayed occupancy"), and that arrangement is negotiated upfront with specific terms. Never assume you can move in early or before you have written possession in your contract.

When do I need to switch my utilities over?

Buyers should schedule utility transfers to take effect on their possession date — the day they receive the keys. Sellers should keep utilities on and active through possession (inspectors and appraisers need working utilities during their visits). Don't cancel service early as a seller! We will send you a reminder as your closing date approaches, including a checklist of the utility providers common in Central Arkansas.

What is title insurance?

Title insurance protects you against problems with the ownership history of the property — things like undisclosed liens from a previous owner's unpaid contractor, errors in public records, or unexpected claims against the property. There are two types: lender's title insurance (almost always required by your mortgage company) and owner's title insurance (optional, but strongly recommended). Think of it as insurance against surprises from the home's past. It's a one-time premium paid at closing.

What happens between offer acceptance and closing?

A lot! After the contract is signed, you're in what's often called the "contract period" or "due diligence period." During this time, you'll complete your inspection, negotiate any repair items via the IRSA (Inspection Response and Settlement Agreement), apply for your mortgage (if not already done), order your appraisal, review the title commitment, and complete any other contingencies or underwriting conditions. Your lender and Realtor® will guide you through every step so nothing falls through the cracks.

What if something goes wrong before closing?

Real estate transactions can hit speed bumps — an inspection that reveals something unexpected, an appraisal that comes in low, a lender hiccup. Almost all of these have solutions. The key is having an experienced Realtor®® who knows how to problem-solve quickly and keep the deal on track. We have navigated countless transactions in Central Arkansas and has the experience to handle the unexpected without panicking — and to keep you calm too.

Find your perfect home withLPT Realty & EP RealTeam

Find your perfect home with
LPT Realty & EP RealTeam