The following post is by Darren from More Than Finances.
Purchasing your dream home is a big investment with many variables. From finding your home, making an offer, getting financing, and closing the sale, professionals can protect your interests as you go through the process. Here are the four main people, along with a description of how they help you.
Real Estate Agent
This is the person you’ll probably interact with the most. Your agent is a licensed professional who’s authorized to negotiate and carry out the sale of property for your behalf. There are three types of agents: a seller’s agent, a buyer’s agent, and a dual agent. Since you’re in the market to buy a home, you should look for a buyer’s agent. This person works only for you, representing your interests throughout the transaction.
What They’ll Do
You can expect the agent to do the following:
- Listen to your home-buying priorities, including your price range
- Contact seller’s agents to schedule home tours
- Help you negotiate with and present an offer to the seller
- Schedule and attend the closing
And though your agent has a fiduciary duty to look after your best interests in a transaction, you’ll still want to interview several agents and their former clients before you choose one to work with.
Since you’re not likely to have enough cash to pay for the home, you’ll need a mortgage provider to lend you money. You can get financing through a mortgage broker, or directly through a lender. Here are the differences between the two.
The broker will match you with potential lenders and act as an intermediary. Though most states require brokerage firms to be licensed, it’s not necessary in all states.
What They’ll Do
- Assess your eligibility for a mortgage based on information about your finances, employment, and credit history
- Find loans from lenders that meet your needs
- Help you apply for the mortgage and present your application to the lender
- Help you decide if you should have mortgage life insurance
- Keep track of all the conditions you must meet before closing, and facilitate the closing.
If you choose to work directly with a lender, you’ll deal with a loan officer. This person will work with you just like a broker does. However, since he’s employed by a specific lender, he’ll only present mortgages from that lender. Whether you go through a broker or a loan officer, it’s important to note that in most states, they don’t have a fiduciary duty towards you. This means that they’re not obligated to act in your best interests. Do some due diligence by checking their background and asking for references.
Real Estate Attorney
When you buy a home, you’ll go through a lot of paperwork – and it’s important to understand every piece of paper you sign. A qualified real estate attorney can explain difficult concepts, answer your questions, and examine the fine print. Every state has different real estate laws. And though not all states require an attorney, you should consider bringing one onto your team.
What They’ll Do
- Review your purchase agreement before you sign it, or make revisions if necessary
- Review other legal documents related to the purchase, including possible mistakes in the deed
- Prorate costs that you split with the seller, such as property taxes
- Coordinate among agents, your mortgage provider, your seller’s attorney, and your lender’s attorney to ensure all documents are reading for the closing
When you look at a home, it’s easy to notice the nice wool carpet or the marble countertops. But how do you know if the foundation is strong, or that the plumbing works? No matter how nice the home appears on the surface, there may be problems that the untrained eye can’t see. A home inspector will look through your home thoroughly, from the foundation on the bottom, to the roof on top, and all the central systems in between.
So now you know that the main people who make up a home buying team are the real estate agent, mortgage provider, real estate attorney, and home inspector. If you look for them when you’re shopping for a home, you’ll be on your way to finding your dream home.