(Based on an actual Google query: tipping food ordered over the counter)

A quick trip through the Punny Money search engine referral logs reveals that one reader was curious as to whether it is appropriate to tip for food served over the counter as opposed to at your table.

The original tipping topic covers the answer to this nicely, but it’s worth repeating: do not tip for food served over the counter. Cashiers and behind-the-counter food servers are paid a wage for a reason–they are not waiters.

Tipping should be used as a reward for service beyond what is expected. For example, it is expected that when you pop into Starbucks and order a double-tall, half-caf latte that you will receive a double-tall, half-caf latte. There shouldn’t be much room for deviation from that order; either you receive your latte, or you don’t. And if you don’t get your latte, you don’t pay for it! I don’t see any room for tip-deserving behavior in there.

Here’s another common situation. You order food that is served over-the-counter with a credit card, and you’re presented with a receipt that includes the food bill and an extra blank line for you to write in a tip. Were this a sit-down restaurant, you’d fill in that line and add up the numbers. But all you did was order a bucket of drumsticks from Chickenland USA, so you should write “N/A” on the tip line and duplicate the food bill amount on the total line.

So if you see a makeshift tip jar sitting in front of a cash register, don’t even think about dropping in a dime of your pocket change.

If you’re one of those parents who wants the sex of your baby-to-be to remain a surprise until the delivery, you could be passing up a chance to save a ton of money. I was reminded of this fact today by a note in this article on the best time to buy everything at SmartMoney.com.

We don’t have any children of our own yet, but I’ve known a lot of new parents who didn’t want to know their child’s gender until he or she was born. I’ve never quite understood the desire to keep a baby’s gender unknown during pregnancy, and the usual response I get when inquiring as to the parent’s motivation is “we’d like to be surprised.” Well, I counter, won’t you still be surprised if you found out today instead of six or seven months from now?

So if you’re thinking of staying in the dark about whether your baby has a hee-hee or a hoo-hoo, think about some of the added expenses you’ll encounter. For example, if I told you right now that you’re having a girl in six months, then you’d have six months to shop for the best deals on baby girl clothes, baby girl room furnishings, and baby girl toys. If you wait to find out until baby pops out of mommy, you’ll either be rushing to match clothes and decor to the sex of the child, or you’ll have to go with gender neutral items ahead of time.

The SmartMoney.com article will tell you that the best time to shop for newborn clothes is during the pregnancy. For a May birth, you can stock up on summer fashions the previous October during end-of-season clearances. And you’ll have plenty of time to look for the best price on blue or pink paint as well as other gender-specific items for the nursery.

Oh, and save the receipts just in case your doctor confuses an arm for a… yeah.

Update 09/13/2006: Amberlynn makes a good point about one expense I forgot to take into consideration along with one idea why parents might opt not to discover the baby’s gender…

…Long-term effects of ultrasound are not known, so we didn’t want to chance it if we didn’t have to. Plus, the cost of the ultrasound is much higher than any little pink dress.

And Sean gives me another good reason why some parents may choose to stay in the dark…

First off, I think you’re really discounting the surprise on the day of their birth aspect. There’s just something about having yet another surprise on a crazy day that finding out months before just won’t give you. And you get to realize that, in the end, as long as they’re healthy, the color you picked for their clothes are truly a moot point.

In an ideal world, everybody could afford to go to college. Unfortunately, the only way a lot of people think they can pay for college is by taking on massive debt. You may recall that we’ve already disproven the need for a debt-burdened education. Free Money Finance recently featured one reader who noted another way that anyone can afford college is by going for free.

A free college education. Sounds great, right? Not if you compare it to the college education I received…

You see, I got paid to go to college. I mean, a lot of money. Like, five figures over four years.

No, I didn’t join the military. And no, I wasn’t a research subject in any drug trials.

I got paid to sit in class, listen to my professor, and receive the education which landed me a well-paying job. No work study, no loans, just free money that was mine to keep.

How did I do it? In theory, it wasn’t hard.

1. Hit the books in high school. This first step will disqualify about 90% of today’s high school population, and I won’t sugarcoat the reason why: they just don’t try hard enough. Since your performance in the four years prior to college is the basis of your admission, getting a good and cheap/free college education starts on day one of high school. Many teenagers blow a chance at a free ride their first year of high school while others perform strong throughout and “take off” their senior year. Getting paid to go to college absolutely requires four years of strong academic performance.
2. Dominate the SAT/ACT. As someone who worked as an undergraduate college admissions representative, I can tell you that those standardized tests play a big role (perhaps too big of a role) in determining your admission and scholarship eligibility. I’ve seen cases where students lost thousands of dollars of scholarship money because of 10 measly SAT points. Parents, consider investing money in test preparation courses, even if your child already has solid scores. A few hundred dollars can mean 100 extra points, and that can mean the difference between a partial scholarship and a full ride.
3. Search out scholarship programs early. You’re looking for a few different types of scholarships, and you will want them all. First, check out school-specific full-tuition scholarships at your colleges of interest. They’ll at least cover the cost of classes and perhaps also fees, books, room, and board. Next, look for school-specific side scholarships. Much like side dishes for a big meal, these little guys won’t fill you up, but they’ll go great with a larger piece of meat. Note that you’re only interested in scholarships that can be accepted in addition to those full-tuition offers. Finally, check out non-school-specific scholarships like those offered by private companies, individuals, or certain government agencies. Find and apply for every scholarship for which you qualify.
4. Apply for state and federal financial aid grants. Many people associate the Free Application for Federal Student Aid (FAFSA) with obtaining student loans. While it’s true that the FAFSA helps determine eligibility for loans and work-study programs, it is also the application for free, need-based money like the Pell Grant. The best part of these grants is that they can be combined with full-tuition scholarships to pay all of your college costs… and then some!
5. Pick a good school, but one that will pay you. So you’ve been offered free rides to several colleges with programs of interest to you, but one of them will also give you extra money. Where does this extra money come from? Well, if the sum of the amounts of your scholarships and financial aid exceeds your bill, you may be eligible to directly receive the excess. Just be careful–some scholarships or aid can only be applied to tuition, fees, and other related costs; they won’t be refunded to you if there’s anything left over.
6. Collect your refund. If you’re eligible for a refund, you should receive it shortly after the school year begins. Contact your school’s financial aid office if you have any questions.

Sounds pretty straightforward in theory. But did I really follow all six of my own steps? See for yourself…

1. I hit the books in high school. It took a lot of hard work and personal sacrifice, but I ended up as the valedictorian of my high school class.
2. I dominated the SAT/ACT. I’ve tutored the SAT for years, and I’ll be the first to tell you that it’s the stupidest test in the world. Any school which bases its admissions on it should be ashamed of itself. That said, a 1560 (back when it was out of 1600) seemed to make my prospective colleges happy.
3. I didn’t search out scholarship programs early. Oops, I flunked big time here. I filled out some school-specific scholarship applications, but I didn’t make much of an effort to find alternative scholarships. I might have found even more free money if I had invested some time in searching for it.
4. I applied for state and federal financial aid grants, and I thank you taxpayers from the bottom of my heart for all that free money you gave me.
5. I picked a good school, one that would pay me. Okay, decision time. Do I go with the full ride to the top-notch school with no money left over, or do I let the state university pay me gobs of cash to grace it with my presence? You guessed it. I picked a public university with an excellent program in my area, and I pocketed every penny of leftover scholarship and financial aid money.
6. I collected my refund. Like clockwork, while other students would open their tuition bills each year, I’d open my refund check.

As it turned out, that extra scholarship and financial aid became critical in keeping a roof over our heads and food on the table during my college years, so please don’t think I squandered it.

Yes kids, you can get paid to go to school. I especially hope that those of you who do end up earning while you’re learning will make the most of your better-than-free education, commit yourselves to academic excellence, and do something you really enjoy with your lives.

Somehow you’ve managed to sweet talk somebody into lending you the cash to buy your first home. But unless you’re a tiny tiny person, you can’t live in a mortgage pre-approval letter. So it’s time to find a property on which to spend all those promised funds. We’ve previously touched on methods you can use to find your new home, but you’re probably not quite sure how to go from “Ooh, that house looks nice” to “Ooh, I own this house.” Heck, you might not even know how to go about looking for your new home in the first place. Enter the real estate agent.

Thanks to this little thing we have called a “legal system,” it’s ridiculously complicated to buy a house. Did you know that purchasing a home involves so much paperwork that 17 acres of rainforest are chopped down every time someone makes an offer on a property? Well, that’s not true, but there’s still a lot of paperwork involved.

Luckily for you, there’s a whole profession full of people out there who have only one job–helping you spend tons of money on your brand new home. These people are called real estate agents, and you definitely want to get one of them to help make this whole homebuying thing a lot easier.

What’s a Real Estate Agent?

I’m glad you asked that question, gray-colored section headline. While technically anybody can act as your real estate agent, only specially licensed folks can actually get paid for doing the job. To get licensed, agents must sit through 40+ hours of classes and then receive a passing grade on the real estate exam for the state in which they wish to be licensed.

Unfortunately for real estate agents, obtaining a license is only half the battle. All newly minted agents must hire onto a brokerage firm. You may know of some brokerage firms already–Long and Foster, Century 21, RE/MAX, any many others. After some years of experience as an agent working for a brokerage firm, an agent can opt to take more classes and get a different license to start his or her own brokerage.

Both homebuyers and sellers can obtain the services of real estate agents and their brokerage firms. Chances are good that the people from whom you buy your home will have their own real estate agent–an agent whose sole fiduciary responsibility is to the sellers. While both the buyer’s and seller’s agent make more money if the property sells for more, the buyer’s agent is bound by law and ethics to look after your best interests, even if that means less money for them in the end.

Why Do I Need a Real Estate Agent?

The truth is that you don’t really need a real estate agent; that is, you are not legally required to have one in order to buy a home. That said, there is absolutely no reason not to have one. They save you a lot of work, and they can help navigate you through one of the most legally complex events of your life.

Here are some of the things for which a buyer’s real estate agent is generally responsible:

• Locating potential properties. Unless you’ve already found the house you want when you approach your agent, you’ll probably want some help sorting through all those listings. Your agent can help match you to properties with the features you want in a price range you can afford. And if you aren’t already pre-approved for a mortgage loan (though you should be if you’re following my tried and true process), your agent may be able to look at your finances and ballpark your price range.
• Chauffeuring and door opening. After finding potential properties for you, your agent will take you to see them. Quite often you’ll hop in the car with your agent and he or she will drive you to see the place. You’ll need a real estate agent here because only licensed agents can operate the property’s lockbox. The lockbox is attached to the house and holds a key to the property. Buyer’s agents can access the key with a secret code provided by the seller’s agents.
• Composing the contract. When you’re ready to make an offer on a property, you’ll sit down with your agent who will fill out roughly three billion pages of legal mumbo jumbo that simply say “Hey, I want your house and I’ll give you X dollars for it.” The contract itself is usually pretty boilerplate, but there are hundreds of blanks that your agent will fill in for you with your specific offer details.
• Recommending services. You may need the services of people such as house and termite inspectors or a settlement agency. You can find your own, ask friends for recommendations, or pick one from a list provided by your agent. Since there are laws prohibiting agents from being paid for referring you to these services, you can usually trust recommendations from your agent… assuming that house inspector isn’t your agent’s brother or something.
• Handling other paperwork and communications. Even after your offer is accepted, there are still plenty of things that need to be done. Your agent will communicate the details of the contract to your mortgage loan officer and settlement agency. They’ll also pass on any requested or required repairs to the sellers following a house inspection.
• Holding your hand at closing. Your agent will mostly be a spectator at closing, but they’ll be there to answer any questions you may have or help handle any items that may pop up at the last minute.

If you think you can handle all of that yourself, then by all means go right ahead. But as you’ll find out in the next section, you’re likely passing up a free helping hand.

How Do Real Estate Agents Get Paid?

You might be thinking, “I can save money by not using a real estate agent to help me purchase a home.” In most cases, you’d be absolutely wrong because it is the sellers who actually pay for the services of your agent along with their own. Here’s the rundown on how your agent and theirs get paid.

1. Sellers find an agent. People who want to sell their house go to a brokerage firm and obtain the services of an agent. They draw up a contract specifying exactly how much money the buyer and seller agents will receive in total. Typically that amount is set at 5-6% of the selling price of the property. The buyer’s and sellers agent will generally split that amount, called their commission, 50-50.
2. Seller’s agent does their thing. The seller’s agent puts the property up on the MLS and does their “best” to get the house sold. Really, a seller’s agent’s “best” is roughly equivalent to the size of their commission.
3. Buyer’s agent sees the property, possibly shows it to potential buyers. Unless you scour the MLS listings or newspaper classifieds yourself, your buyer’s agent will help you find candidate houses. While buyer’s agents stand to make more money if you buy a more expensive house, they’re not going to show you homes you cannot actually afford since that would be a waste of their time. They may, however, steer you toward listings where the commission percentage is higher. In fact, some buyer’s agents may refuse to show properties to their clients if the commission is set too low.
4. Buyers find a house they like and make an offer. And if the sellers accept the offer, we move on to the final step…
5. At closing, everyone gets paid. We’ll go into obscene detail about closing near the end of this series, but an important aspect of closing (at least to the agents) is that the agents get paid. Whatever the final sale price of the property is, the agents get their percentage, usually from the sellers.
6. The brokerage firms take their cuts. Your agent doesn’t get to pocket all of that cash. Their brokerage will take a hefty chunk from the agent. My agent once worked for a brokerage which took 50% of the commission, but that’s much higher than most firms usually take.

And while you might think you can make that 3% buyer’s agent commission by handling the whole process yourself, you’re probably out of luck there. Generally if you opt not to use a buyer’s agent, you won’t get a dime of the commission. Instead, it’ll either be forfeited or go to the seller’s agent along with their part of the commission. Note, however, that there are other ways for you to get a chunk of the buyer’s agent commission, but we’ll talk about that in a later part of episode #6.

In short, real estate agents usually don’t cost you anything as a buyer, they handle all the paperwork (except for your own signature; they don’t have power of attorney to do that for you), and they’re licensed and bonded and insured and legally accountable in case things gets screwed up during the purchase process. Something tells me you are neither bonded nor insured, and you certainly don’t want to be legally accountable for something as big as a house sale gone wrong.

What Are Realtors?

You may hear the term “realtor” used synonomously with “real estate agent.” The proper use of the term “REALTOR®” (all capital letters) refers to members of the National Association of Realtors (NAR). Don’t let the fancy name fool you; being a REALTOR is as simple as adhering to the NAR’s Code of Ethics and Standards of Practice and paying membership dues. Yes, that’s all there is to it.

In my research and talks with various people, I could find no advantage to going with a real estate agent who is a REALTOR versus one who is not. I’m not sure if our agent was a REALTOR, and I never even bothered to check. So don’t let some capital letters stand between you and a good real estate agent.

Speaking of which, next time we’ll talk about some strategies for locating a good real estate agent… as well as avoiding the bad ones.

Lender closing fee: $619.00

Hazard insurance premium: $418.00

Six months of county property taxes in escrow: $1,128.69

Becoming a homeowner for the first time: Pricey

There are some things in life even MasterCard can’t buy. For those things, a gigantic mortgage loan will do quite nicely.