FAQ
Real estate questions, answered
Answers to the most common real estate questions — buying, selling, mortgages, valuations, and how Lotum AI's six named experts help at every step.
Getting started with Lotum AI
What Lotum AI is, who it's for, and how the six experts work together.
What is Lotum AI?
Lotum AI is a free real estate knowledge platform with six named AI experts — Kai (residential), Theo (commercial), Milo (property management), Lena (maintenance), Zara (insurance), and Ava (financing and structuring). Each expert is purpose-built for their specialty, so you get instant, knowledgeable answers at any hour without waiting on a callback.
Full answer page →Who is Lotum AI built for?
Anyone dealing with property: home buyers and sellers, landlords and renters, commercial investors, and homeowners maintaining what they own. Buyers use Kai to understand pricing and neighborhoods, landlords lean on Milo for tenants and leases, investors talk cap rates with Theo, and everyone checks their numbers with Ava. The guidance adapts to whichever role you're in.
Full answer page →Does Lotum AI replace my real estate agent?
No. Lotum AI gives you instant expertise between conversations and helps agents work faster, but the human relationship stays central to every deal. Think of it as an always-on research and drafting team that makes great agents even better — not a substitute for licensed representation, negotiation, or fiduciary duty.
Full answer page →How do the six experts work together?
Each expert owns one specialty, and they share context so your situation flows end to end. Kai can price the home you're eyeing, Ava can structure how you'd finance it, and Zara can flag the insurance it will need. After you close, Lena keeps the maintenance schedule — and if you ever rent the place out, Milo takes it from there.
Full answer page →How much does Lotum AI cost?
Nothing — Lotum AI is 100% free. There are no plans, no subscriptions, no accounts, and nothing to buy. We believe everyone deserves access to reliable, fact-checked real estate information without depending on someone who's trying to sell them something, so every expert, tool, guide, and glossary entry is free for everyone, always.
Full answer page →Why is Lotum AI free? What's the catch?
There's no catch. Almost all real estate information online comes from someone earning a commission or a fee on your decision — agents, lenders, and listing portals. Lotum exists to be the neutral alternative: the knowledge is free, and we never sell your data or pass your questions to salespeople. The one way we may earn money: if you explicitly ask us to introduce you to a vetted professional, that partner may pay us a referral fee — it never costs you anything, it never changes the advice, and it only ever happens when you raise your hand.
Full answer page →Do I need to create an account?
No. Every expert, calculator, guide, and glossary entry works without an account, an email address, or a phone number. Open the site and start asking.
Full answer page →Buying a home
Affordability, offers, neighborhoods, and the buyer journey.
How much house can I afford?
A common rule of thumb is to keep your total monthly housing payment near 28% of your gross monthly income and your total debts under about 36%, but the right number depends on your down payment, interest rate, property taxes, insurance, and existing debt. Ava, our financing expert, can produce a personalized affordability estimate and explain each driver behind it.
Full answer page →How much should I put down on a house?
20% down lets you avoid private mortgage insurance and lowers your monthly payment, but many buyers put down far less — some loan programs allow 3% to 5%, and certain government-backed loans require little or nothing down. The trade-off is a higher monthly payment and added mortgage insurance, which Ava, our financing expert, can model for your situation.
Full answer page →What's the difference between pre-qualification and pre-approval?
Pre-qualification is a quick, informal estimate of what you might borrow based on numbers you provide. Pre-approval is a stronger, document-backed commitment from a lender after they verify your income, assets, and credit — sellers take pre-approved buyers far more seriously. Ava can build your pre-approval document checklist.
Full answer page →How do I make a competitive offer?
A strong offer balances price with terms sellers value: a solid pre-approval, a reasonable closing timeline, a clean but protective set of contingencies, and earnest money that signals commitment. Kai, our residential expert, can help you weigh how aggressive to be based on local inventory and days-on-market data.
Full answer page →How long does it take to buy a home?
From accepted offer to closing typically runs 30 to 45 days, though all-cash purchases can close faster and complex financing can take longer. The home search itself varies widely. Ava, our financing and structuring expert, maps every milestone so you always know what happens next.
Full answer page →What are closing costs and how much should I budget?
Closing costs are the fees due when the home changes hands: lender fees, title insurance, escrow charges, and prepaid taxes and insurance. Buyers typically pay 2–5% of the purchase price on top of the down payment. Budget 3% as a starting rule of thumb, then compare your loan estimate line by line.
Full answer page →Should I rent or buy?
Run the honest comparison: unrecoverable costs on both sides. A quick check is the 5% rule — if annual rent on an equivalent home is under 5% of its price, renting is competitive. Time horizon matters most: under about five years in the home, buying's one-time costs usually outweigh its benefits.
Full answer page →Selling a home
Pricing, listings, marketing, and timing your sale.
How do I price my home correctly?
Accurate pricing comes from recent comparable sales ("comps") of similar nearby homes, adjusted for condition, size, and features, and balanced against current inventory and demand. Kai, our residential expert, produces a defensible estimate, explains the drivers behind it, and reads whether it's a buyer's or seller's market right now.
Full answer page →What's the best time of year to sell?
In most markets spring and early summer bring the most buyers and the strongest prices, but the right timing depends on your local climate, school calendars, and inventory levels. Lower-competition seasons can still work well if your home stands out. Kai can read seasonality for your specific area.
Full answer page →Should I make repairs or upgrades before selling?
Focus on fixes that affect buyer perception and inspection outcomes — fresh paint, clean systems, and curb appeal usually return more than major remodels. Kai can estimate the ROI of specific upgrades — and Lena, our maintenance expert, can sanity-check repair quotes — so you spend only where it moves the sale price.
Full answer page →What makes a listing description sell?
A great listing leads with the home's strongest, most specific selling points, uses concrete sensory detail instead of clichés, and is tailored to the buyer most likely to want it. Kai, our residential expert, drafts MLS-ready copy, suggests the photos that matter most, and adapts the message for each marketing channel.
Full answer page →How much does it cost to sell a home?
Sellers typically pay agent commissions, transfer taxes, title and escrow fees, and any negotiated repair credits — often totaling several percent of the sale price. Pre-sale prep and staging add to that. Ava, our structuring expert, can help you build a net-proceeds checklist so there are no surprises at the table.
Full answer page →How much will I actually walk away with after selling?
Your net proceeds are the sale price minus commissions, closing costs and taxes, any repair credits, prep costs, and your remaining mortgage payoff. Our free seller net proceeds calculator itemizes each line so you see the take-home number before you ever list.
Full answer page →Is staging worth it?
The free parts almost always are: decluttering, deep cleaning, and maximizing light. Professional staging pays off most for vacant homes and unusual layouts, where empty rooms read smaller than they are. Big pre-sale renovations rarely return their cost — paint and curb appeal beat remodels.
Full answer page →Financing & mortgages
Loan types, rates, credit, and what lenders look for.
What types of mortgages are there?
The main categories are fixed-rate loans (a steady payment for the life of the loan), adjustable-rate loans (a lower initial rate that can change), and government-backed programs designed for specific buyers. Terms commonly run 15 or 30 years. Ava, our financing expert, explains the trade-offs of each for your goals and time horizon.
Full answer page →What credit score do I need to buy a home?
Requirements vary by loan program, but a higher score generally unlocks better interest rates and lower costs. Some programs accommodate lower scores with offsetting factors like a larger down payment. Ava can outline what's typically expected and how to strengthen your profile before applying.
Full answer page →What documents do I need to get a mortgage?
Lenders generally want proof of income (pay stubs, tax returns, W-2s or 1099s), proof of assets (bank and investment statements), identification, and details on your debts. Self-employed buyers usually need additional documentation. Ava generates a personalized checklist so nothing stalls your approval.
Full answer page →How do interest rates affect what I pay?
Even a small change in rate meaningfully changes your monthly payment and the total interest over the life of the loan. That's why rate, term, and down payment should be modeled together rather than in isolation. Ava can show side-by-side payment estimates as rates move.
Full answer page →Should I get pre-approved before house hunting?
Yes — pre-approval tells you a realistic budget, signals to sellers that you're serious, and speeds up the offer process. It's one of the highest-leverage first steps for any buyer, and Ava, our financing expert, can walk you through exactly what's required.
Full answer page →What is PMI and how do I avoid it?
Private mortgage insurance protects the lender when your down payment is under 20% on a conventional loan, and it's added to your monthly payment. You avoid it with 20% down, remove it once you reach about 20% equity, or sidestep it entirely with a VA loan if you're eligible.
Full answer page →What's the difference between interest rate and APR?
The interest rate is the cost of borrowing the money; APR (annual percentage rate) adds the loan's fees — origination, points, and certain closing costs — into one comparable number. When comparing lenders, APR is the fairer apples-to-apples figure.
Full answer page →Agents, brokers & lenders
Choosing the professionals who change your outcome the most.
Do I need a real estate agent to buy or sell a home?
Legally no, practically usually yes. Pricing judgment, negotiation leverage, contract management, and off-market intel are hard to replicate solo, and unrepresented parties often concede more in negotiation than the fee would have cost. If you go without one, hire a real estate attorney for the contract at minimum. The quality of the agent matters more than whether you have one — Kai can help you evaluate candidates.
Full answer page →How do real estate agents get paid now?
By negotiated commission, set in writing before you work together. Since the 2024 NAR settlement, buyers sign an agreement stating their agent's fee before touring, and buyer-agent compensation is no longer advertised through the MLS. Sellers still frequently cover the buyer's agent fee as a negotiated deal term. Everything — the rate, the structure, the exit clause — is negotiable up front.
Full answer page →What's the difference between an agent and a broker?
An agent is licensed to represent clients and must work under a broker; a broker holds a higher license and can run a brokerage. 'Realtor' is a National Association of Realtors membership, not a skill level. None of the titles predicts quality — recent closed transactions in your area and price range do.
Full answer page →What is dual agency, and should I agree to it?
Dual agency is one agent (or brokerage) representing both buyer and seller in the same deal. It halves the duty owed to each side and is illegal in several states, consent-required in most others. It occasionally makes sense for a simple deal between informed parties — but never agree under pressure, and never without asking what you're giving up.
Full answer page →How many lender quotes should I get before choosing?
Three to five, from different lender types — a bank or credit union, a mortgage broker, and a non-bank lender — requested the same day for the same rate-lock period so the Loan Estimates compare honestly. Then take the best written offer to your preferred lender and ask them to beat it. That negotiation works more often than most borrowers believe.
Full answer page →Does shopping mortgage rates hurt my credit score?
Not meaningfully. Credit models treat all mortgage inquiries within a single shopping window — 45 days for most, 14 for the most conservative — as one inquiry. Keep your quotes inside two weeks and shopping five lenders costs your score the same as shopping one.
Full answer page →Can I switch agents or lenders in the middle of a deal?
Lenders: yes, any time before closing — you're not committed until you sign closing documents, though switching late costs time. Agents: the agreement controls; most have terms and cancellation provisions, and many brokerages release unhappy clients on request. Ask about exit terms before you sign anything — that's when you have the leverage.
Full answer page →Valuations & market data
How estimates are produced and how reliable they are.
How accurate are Lotum AI's valuations?
Valuations are estimates based on comparable sales and market data, with the key drivers explained so you understand the number rather than just receiving it. They're an excellent starting point for pricing and offers, but you should always confirm with a licensed appraiser before a transaction.
Full answer page →What is a comparative market analysis (CMA)?
A CMA estimates a home's value by analyzing recently sold, similar properties nearby and adjusting for differences in size, condition, and features. It's the same logic agents use to price listings, and Kai, our residential expert, can produce one along with the reasoning behind each adjustment.
Full answer page →How do I know if it's a buyer's or seller's market?
It comes down to supply and demand: low inventory and fast sales favor sellers, while high inventory and longer days-on-market favor buyers. Kai summarizes inventory, days-on-market, and price trends for your area and tells you which way the balance is tipping.
Full answer page →Why do online home value estimates disagree?
Different tools use different data sets, comp selections, and models, so estimates vary. The most useful estimate is one that shows its work — which comps it used and how it adjusted them — so you can judge its reasoning. That transparency is exactly what Kai is built to provide.
Full answer page →What's the difference between assessed value and market value?
Assessed value is what your county uses to calculate property taxes, and it's often lower than — and updated less frequently than — market value, which is what a buyer would actually pay today. Never price a home from its tax assessment.
Full answer page →Renting & landlording
Rentals, tenants, leases, and being a good landlord.
How do I set the right rent for my property?
Price from comparable rentals — similar units nearby, adjusted for condition, size, and amenities — the same comp logic used for sale prices. Overpricing costs more in vacancy than the extra rent recovers: one empty month wipes out an 8% rent premium for a whole year. Milo, our property management expert, can talk through pricing for your unit.
Full answer page →What should be in a residential lease?
At minimum: rent amount and due date, deposit terms, lease length, maintenance responsibilities, entry-notice rules, pet and smoking policies, and what happens on late payment or early termination. State law overrides anything contrary you write, so use a state-specific lease form as your base.
Full answer page →How much should landlords budget for vacancy and repairs?
Use 5–8% of rent for vacancy, and pair it with a turnover line — every move-out costs a make-ready and re-leasing, so spread roughly one month's rent across your expected tenancy. For maintenance, skip the flat 1%-of-value rule: repair bills don't scale with price, so budget 2–3% of value on homes under about $150K, roughly 1% above that, with a floor near $2,500 a year — plus a separate capex reserve for roofs and HVAC. If a deal only works with zero vacancy and no repairs, it doesn't work.
Full answer page →Can I manage a rental myself or should I hire a manager?
Self-managing saves the typical 8–10% management fee and works well for nearby properties and organized owners. But don't let proximity pick your market: a strong market with a professional manager usually beats a weak one you can drive to. Hire out when you're remote, scaling past a few units, or when your time is worth more than the fee. Milo can help you build systems for either path.
Full answer page →What's the process for raising rent?
You can generally adjust rent at lease renewal with proper written notice — commonly 30–60 days, longer in some states and capped in rent-controlled jurisdictions. Mid-lease increases aren't allowed unless the lease specifically provides for them.
Full answer page →Insurance & protection
Policies, coverage, claims, and protecting what you own.
How much homeowners insurance do I need?
Enough dwelling coverage to rebuild at today's construction costs — which is different from market value — plus liability of at least $300k for most owners. Zara, our insurance expert, can walk through how reconstruction cost, personal property, and liability limits fit your situation.
Full answer page →What's the difference between replacement cost and actual cash value?
Replacement cost pays what it takes to buy or rebuild new; actual cash value subtracts depreciation first. On a 12-year-old roof the difference can be thousands of dollars. Check which one your policy applies to the roof specifically — insurers increasingly move older roofs to ACV at renewal.
Full answer page →Do I need landlord insurance for a rental property?
Yes — a standard homeowners policy generally doesn't cover tenant-occupied properties. Landlord (dwelling fire) policies cover the structure, liability, and often lost rent after a covered loss. Requiring tenants to carry renters insurance protects everyone further.
Full answer page →Is flood insurance worth it outside a flood zone?
Often, yes. Standard policies never cover flood, and a large share of flood claims come from outside high-risk zones — where premiums are also cheapest. If water could conceivably reach you in a hundred-year storm, price a policy before deciding.
Full answer page →When should I file a claim versus paying out of pocket?
If the loss is close to your deductible, paying yourself is usually smarter — claims sit on your record for years and can raise premiums. Save claims for the losses that genuinely need them. Zara can help you think through a specific situation.
Full answer page →Maintenance & repairs
Keeping your home healthy and knowing what things cost.
How much does home maintenance cost per year?
Budget about 1% of the home's value annually as a long-run average — more for older homes and harsh climates. It arrives in lumps, not installments: quiet years bank the surplus for roof and HVAC years. A dedicated home fund turns emergencies into planned spending.
Full answer page →What maintenance actually prevents expensive damage?
Water management above all: clean gutters, downspouts that discharge away from the foundation, sound caulk and flashing, healthy supply lines, and a working sump pump. Water causes more costly home damage than everything else combined. Lena, our maintenance expert, can build a checklist for your home.
Full answer page →How do I know if a contractor's quote is fair?
Get three itemized quotes for anything significant and compare scope line by line, not just totals. Be suspicious of the lowest bid and of any pressure to sign today. Lena can sanity-check a quote's line items against typical ranges before you commit.
Full answer page →How long do major home systems last?
Rules of thumb: asphalt roof 20–25 years, furnace 15–20, central AC 12–15, water heater 8–12, kitchen appliances 10–15. Knowing the install dates in your home turns replacements from surprises into a schedule you can budget for.
Full answer page →Should I repair or replace a failing system?
The 50% rule: if the repair costs more than half of replacement and the unit is past half its expected life, replace it. Factor in efficiency too — new furnaces and water heaters often partially pay for themselves in energy savings.
Full answer page →Privacy, accuracy & trust
How your data is handled and how to use AI guidance responsibly.
Is my data private?
Yes. Your conversations and information are kept private and are not sold. If you'd like to make a data request, reach out through our contact page and we'll help.
Full answer page →Is Lotum AI's guidance legal or financial advice?
No. Lotum AI provides educational information and estimates to help you make better-informed decisions, but it is not a substitute for advice from a licensed real estate agent, attorney, lender, or appraiser. Always confirm important decisions with the appropriate professional.
Full answer page →Which markets does Lotum AI support?
Lotum AI is rolling out market by market. Reach out through the contact page and we'll tell you what's live in your area and when more coverage is coming.
Full answer page →How current is the information?
Market conditions and rates change constantly, so treat figures as point-in-time estimates and re-check anything time-sensitive before acting. Kai is designed to surface the most recent trends available for your area.
Full answer page →Still have a question?
Chat with Kai, Theo, Milo, Lena, Zara, or Ava, try the free tools, or read our step-by-step guides.