Building your dream team
June 12, 2017
Buying a home is not a solo adventure. No one gets through the process without help, especially the first time. After all, even if you dig in on educating yourself, you’re not going to become a real estate, finance, and building expert. And expertise is what you want when the dollar figures have so many zeros, right?
That’s why it's important to build a team of professionals you can trust. From start to finish, the homebuying process involves a number of specialized professionals. You might deal with your real estate agent once or twice a week, but there are others you’ll never lay eyes on.
Let’s meet them all and see where they enter the picture.
Before you start shopping for a home …
There are three professionals you’ll want to connect with before you start looking for a home.
1. Homeownership Advisor
This is the first person you want to bring on board. Here at Framework, we love Homeownership Advisors (sometimes called housing counselors) because they provide trusted, unbiased guidance throughout the entire homebuying process, from deciding how much you can afford to having your back during the closing process.
Your advisor answers your questions, connects you to other resources, and generally helps you keep moving toward your goal. They might even know about obscure homeownership programs that you could qualify for.
2. Real estate agent
Finding a great agent is another priority. Besides scouting homes for you, your real estate agent helps you prepare and negotiate the purchase agreement once you’ve found a great property and then steers you to the closing. The agent is typically a homebuyer’s top ally and guide.
Agents are licensed by the state and provide advice, represent buyers in negotiations with sellers and their agents. A “buyer’s agent” represents only your interests to the seller and seller’s agent. The seller’s agent or listing agent works on the seller’s behalf.
FYI, some homebuyers work with a facilitator: a real estate agent who does not represent you directly. You would use one if you decided not to work with an agent and needed help completing the purchase agreement. If you’re an experienced homebuyer, this could work for you.
3. Loan officer or mortgage broker
Your loan officer represents the lending institution that processes your mortgage application. It’s the loan officer who will give you the preapproval you need to be taken seriously as a buyer — one reason it’s best to shop for a mortgage before you start shopping for a home. They’ll also help you through the process in general and make sure you meet all the loan requirements.
A mortgage broker is more of a go-between who helps you shop for and compare loans from different lenders. One thing the two have in common is that they are expected to help you find the best loan product you qualify for.
When you find “the one” …
The next three pros step in once you make an offer.
4. Real estate attorney
In some states, you have to hire a real estate attorney to document and review any offer you make. Your attorney protects your rights, makes sure your duties are clearly defined, and helps resolve issues related to things like title insurance and any environmental laws that might come into play.
You’ll need a real estate attorney to review your closing documents (at a minimum) if you live in Alabama, Connecticut, Delaware, District of Columbia, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, or West Virginia.
5. Home inspector
Are costly, unexpected home repairs part of your plan? We didn’t think so. Once you find that just-right home, you’ll want to hire a professional home inspector to check it out from top-to-bottom. Your inspector looks for any major issues you need to be aware of, like water or structural damage, code violations, an old roof, or a subpar foundation. Depending on the home, you might want to also hire one or more specialists, for example to check for termites and other pests.
Buying a newly constructed home? A home inspection is still important. The builder might have overlooked something that you want corrected as a condition of the sale.
6. Home appraiser
The appraiser determines the home’s value and confirms for the lender that it's worth at least the price you plan to pay. You’ll probably never meet or even have to think about the appraiser, unless the seller is asking too much.
And in the home stretch …
When you’re ready to close the deal, three more pros enter the picture as part of getting the keys in your hand.
The underwriter works on behalf of the lender, scrutinizing and approving your loan after it’s processed. Just how risky is this deal? Is everything you entered on your loan application true? Can you afford the monthly mortgage payment? Is your credit history solid? Is the loan amount in line with the home’s appraised value?
In some cases, much of the underwriting task is automated. An algorithm-based system retrieves all the relevant data, such as your credit history, and arrives at a “logic-based” decision. This allows lenders to give you a thumbs-up much faster — within a few days.
8. Closing agent
The closing agent (sometimes called an escrow officer) represents the title company and facilitates the final transaction. That means making sure both parties’ closing documents are in order, reviewing the title work, and conducting the actual closing.
If your state requires a real estate attorney, your attorney might handle all this.
9. Insurance agent
Before you can close on your mortgage, you have to prove that you’ve purchased enough homeowners or hazard insurance to cover potential loss or damage to the home. An insurance agent will help you decide what you need. You want enough coverage, but not too much.
Support goes both ways
As you can see, everyone on the homebuying team has an important job to do. The more you support them, by knowing what they’ll need and being ready, the more smoothly your purchase will go. So check out the Framework online homebuyer course. It’s a fast, convenient way to make sure you can navigate every step of the process with confidence.
Keep this info close at hand
Download the infographic below for a quick reference guide to your homebuying team. You might also want a copy of the 8 steps of the mortgage process to go along with it - you can find that here.
Ready to take the next step in your homebuying journey with all the confidence of a smart and savvy homebuyer? Our comprehensive online homebuyer course is simple and easy to access on your computer, tablet, and mobile device. It's all the information you need, all in one place. Go ahead and get started today.
Filed Under: For Homebuyers