Building The Right Home Buying Team For You

Been thinking of buying a home? You’ll want the right team. You see, 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.  You’ll want to be able to trust this person – trust is very important because they’ll be qualifying you for the mortgage you will need. The interest rate and fees should be fair based on your credit, income, and the market.

Your lender needs to be 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.

As a part of the loan approval process, the appraiser is hired indirectly by the lender.  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 an agreement has been reached and a contract has been fully agreed upon, one of the first steps is for the buyer to have a home inspection which is performed by a professional. While most states require these professionals to be licensed, 14 states do not require one to perform inspections.

How do you find a home inspector?  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.

More than likely, pest control is not usually included in the normal home inspection.  Pest control specialists are licensed, and are concerned about termites, other insects, and vermin.  If you do not have experience with a pest control company, recommendations from friends and your agent can give you a place to start.

Insurance – we’ll begin with property casualty insurance. This type of insurance is required by the mortgage holder but even if you were paying cash for a home, it would be a very good idea 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 provider for title insurance is usually named in the sales contract. In most cases there are two different policies which 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 normally required when new mortgages are established to make sure there are not encroachments on the property lines.  A buyer may want to get a survey for the same reason – even in a cash purchase. 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.

In some states, a real estate attorney is a requirement and is to be involved in all transactions. In other situations, a real estate attorney may be involved to draw the legal documents but in no way is representing the interests of a specific person.

A buyer or seller can consult an attorney and have them represent their interests in the transaction.  Once a buyer understands if an attorney is not required in a real estate transaction, they are free to decide if they want legal representation.

The listing agent 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.

As you can see, there are many professionals involved with the purchase of a home. When you look at it from a buyers’ standpoint, it’s 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.

Of course there are so many steps and details when going through and experiencing the homebuying process. Even if a buyer has gone 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.  Like it takes a village to raise a child, it helps to have a team to buy a home.  Finding an agent to keep your best interests at heart is the first team member you need to select.  From there, your agent can help you find the other team members.

For more information, download the Buyers Guide and make an appointment, in-person or virtually, to find out how they can put together your Homebuying Team.  In that appointment, ask the agent to explain agency and its benefits to you in your upcoming transaction.

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