There are a lot of professionals involved in the homebuying process. And when these people can function as a team, the buyer is much more likely to end up where they want to be…in their new home.
The lender is an integral part of the team unless you are going to be paying cash. Trust is very important when selecting this person because they are going to qualify you for the mortgage you need. The interest rate and fees should be fair based on your credit, income, and the market.
You’ll want someone who can close at the rate and terms that were quoted. In a rising market, you may want to consider locking in the rate so that it doesn’t go up before you close.
The appraiser is hired indirectly by the lender to determine the value of the home as part of the loan approval process. During the financial crisis of 2008, a process was created by the Dodd-Frank Wall Street Reform and the Consumer Protection Act to limit direct contact between borrowers, lenders, and appraisers.
This requirement protects appraisers from being influenced by a lender. Sometimes, an Appraisal Management Companies, AMC, may assign an appraiser who may not be familiar with a particular area or type of property. The real estate agent can act as a liaison to provide additional information about the property and area that the appraiser would not necessarily know about initially.
Once a contract has been fully agreed upon, one of the first steps is for the buyer to have a home inspection made by a professional. While most states require these professionals to be licensed, 14 states do not require one to perform inspections.
In addition to being licensed, some inspectors belong to professional organizations that provide specialized education and suggest levels of performance. Recommendations from friends who have recently purchased a home would be helpful. Your agent may give you several names of inspectors and you can ask for the buyer’s contact information who used them recently to verify their results.
Pest control is not usually included in the normal home inspection. These are also licensed specialists who are concerned about termites, other insects, and vermin. If you do not have experience with a pest control company, I can recommend one.
Property casualty insurance is required by the mortgage holder but even if you were paying cash for a home, it would be prudent to have insurance. A homeowners’ policy provides the broadest coverage with fire and other named perils including burglary for both the dwelling and the contents. Liability is packaged with the other coverage to protect you if someone is hurt while on your property.
Deciding based on policy price may not present a complete comparison. Another consideration is how the company handles claims in both time and settlement.
The title insurance provider is usually named in the sales contract. There are two different policies that are usually offered simultaneously but paid for separately. The owner’s title policy guarantees the buyer they are getting a clear and marketable title while the mortgagee’s title policy guarantees the lender that they have an enforceable lien.
The Real Estate Settlement Procedures Act gives the buyer the right to determine the provider.
Surveys are commonly required when new mortgages are established to make sure there are not encroachments on the property lines. Even in a cash purchase, a buyer may want to get a survey for the same reason. In some cases, lenders might accept a seller’s previously obtained survey.
The title company usually order’s the survey based on instructions from the contract or lender.
A real estate attorney is required in some states to be involved in all transactions. I have some I can recommend to you. You definitely want to use one to represent you.
The listing agent – that’s me, I hope! – is hired by the seller when they place their home on the market for sale. In many cases, the listing agent has a fiduciary duty to put the seller’s interest above their own. These duties include loyalty, confidentiality, disclosure, obedience, reasonable care and diligence and accounting.
The buyer’s agent will interface with the listing agent in the various negotiations that will take place beginning with showing the property, offer, acceptance, and all the other steps that will lead to the settlement of the sale.
Agency describes a legal relationship and can apply to seller’s and buyer’s agents and is created once an agreement is signed; a few states have provisions for oral agreements. Members of the National Association of REALTORS� subscribe to a code of ethics that describes their practice and behavior to clients and the public.
There are many professionals involved in the purchase of a home. From a buyers’ standpoint, it is helpful to have one person who is familiar with the process to be coordinating the efforts of the different parties to finish with a settlement and possession.
There are a lot of steps and even if a buyer has been through the process before, they may not have the experience to anticipate difficulties and solve issues that could derail the transaction. The role of a third-party negotiator is a valuable role that the buyer’s agent plays. While the buyer is in control, the buyer’s agent can provide information and background necessary for sound decisions.
The purchase of a home is the largest investment most people make. For more information, download the Buyers Guide.
And then make an appointment with me to find out how I can help you put together your Homebuying Team and get you moving!