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Buying a home is a quest. It’s a quest for peace. A quest for serenity. A quest for well-being. It’s an adventure most homebuyers do only once or twice in their lifetimes. Consider it a pilgrimage to find a place to dream.
And like any serious quest or adventure, meeting and working with new people along the journey is an essential part of buying a new home. Yes, even for the painfully shy among us.
But instead of dragons, it’s piles of paperwork. Instead of spells cast, it’s legalese that must be interpreted.
Without good, quality professional people to help buyers through the labyrinth that leads to home ownership, the task can become unmanageable.
Like anything new, there is mystery involved. Who are all these people? What will they do for me? Why do I need to deal with so many people buying this house? How can I be assured these are quality people, people worth my time and money?
Let’s take a look at which parties are involved when you’re buying a house.
The two main parties in buying a house are the borrower, you, and the mortgage lender.
While buyers will have a ballpark idea of what they can afford to spend on a new home, a mortgage lender will be able to pinpoint just where in the housing market you should be looking.
The lender has many tasks including the following:
- Reviewing bank statements
- Checking your proof of income
- Define your rates
- Calculate an estimated monthly payment
- Estimating how much of a down payment you need
These are also the people who will pre-approve* your home loan before you talk to the person who will help guide you through this adventure — your real estate agent.
Pre-approval defines your budget clearly and also tells the real estate agent and the seller that you are serious about purchasing.
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Real Estate Agent
The person leading the way is your real estate agent.
Typically referred to as a buyer’s agent, this is the person who will help you find a home. They’ll also put together your offers, negotiate the final price, and walk you through the mounds of paperwork involved in closing the deal.
Finding a quality real estate agent requires a bit of research, but fortunately, there are plenty of resources out there. Start with the National Association of Realtors. With more than 1,200 local boards in all the states (plus four territories), the 112 year-old organization promises buyers a level of trust.
Be sure to find a real estate agent that you not only like on a personal level — after all, this is the person who you’ll spend the most time with during this process — but someone who also has a history of giving quality customer service.
Talking to friends and family members can help you find a good real estate agent.
There are also several certifications a real estate agent may have that a buyer might be interested in. These include:
- Certified Residential Specialist (CRS): Trained to better handle residential real estate sales
- Accredited Buyer’s Representative (ABR): Trained representing buyers in transactions
- Seniors Real Estate Specialist (SRES): Trained to help buyers and sellers aged 50 and older
Once you and your real estate agent found a home you love, it’s time to meet the next person in your journey.
Home Inspector and Appraiser
Appraisers and inspectors are two more parties involved in your process of buying a house. The two have different sets of skills and certifications.
Your lender will order an appraisal through a third-party service during the purchasing process, after your initial offer on the home has already been negotiated.
Negotiations with the seller to come down in price will usually take place if the house doesn’t appraise at value. If the seller does not come down in price, the buyer will have to take care of the difference in their down payment or completely walk away from the deal. If the house appraised “at value” the seller will not know how much the house appraised for, they will only know that the house appraised at value.
An inspection has to be set-up through the buyer. Appraisals are required by the lender, while the inspections are not. But it’s almost always a good idea to set up an inspection of the home before you close.
The inspector will do a walk-through in the house to make sure everything is in working order. They’ll point out if things need to be repaired and make recommendations. An appraiser is simply evaluating the value of the house.
The listing agent works for the seller and the buyer probably won’t even meet them, but they are the liaison between the buyer’s agent and the seller.
Make an offer and the listing agent will take it to the seller. It goes on this way until a price is agreed upon, then both the real estate agent and the listing agent will take care of the paperwork.
Also behind the scenes is the title company.
They’re responsible for ensuring the buyer is buying a property that has no outstanding liens or mortgages, otherwise known as a title search.
This is necessary to ensure there are no legal issues down the road. Often, your real estate agent has a title agent they work with.
By law, your new home must be insured.
Insurance is normally folded into the monthly payments, and a good insurance agent will give buyers every option, from the bare minimum to essential additions.
Some beneficial adds on include weather-related damage coverage or specific coverage such as mine subsidence insurance.
One of the last people buyers will meet is the notary. They are an impartial individual who will witness the signing of the prepared closing documents. This usually takes place at what is known as “closing”
During tax season, it might be wise to meet with a tax expert who will gladly tell new buyers just how they can leverage their home financially.
Not only that, certain rules apply to the different ways a person bought their home. Was the down payment gifted by a relative? Is the buyer a senior citizen? Does the buyer work from home and use the garage as a workshop? A tax advisor will help advise the buyer with their specific situation.
Make Homefinity One of the Parties in your House-Buying Adventure
Regardless who the buyer finds to help them with this quest, Homefinity is here to answer any questions for those looking for financing.
Check out our step-by-step guide for new homebuyers.
Our loan specialists are always happy to answer questions and share the mortgage options that are available to you personally.
Reach out to Homefinity today to set up an appointment that is convenient for you.
*Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.