Who’s Who On Your Homebuying Team
Unlike most purchases, buying a home requires a whole team of people to ensure the transaction goes smoothly. As a first-time homebuyer all those people may seem overwhelming, and you might wonder if it’s even necessary to have everyone involved. Let’s take a look at who’s who on your homebuying team and how they can help you.
For many first-time homebuyers, a housing counselor is the first person they work with on the homebuying team. These specially trained advocates help buyers determine how much they can afford, investigate opportunities for down payment assistance, instruct on fair housing guidelines, and more. Look for a housing counselor who works for a HUD-approved nonprofit credit counseling agency, such as Take Charge America.
Real Estate Agent
Probably the most widely recognized member of your homebuying team, your real estate agent finds homes for you to view based on the criteria you provide. They will also help you negotiate the purchase agreement and guide you through the closing process. Look for someone specializing as a buyer’s agent who will have the personality and skills to work with the seller’s agent on your behalf. All real estate agents must be licensed by the state in which they work.
Mortgage Broker and Loan Officer
A mortgage broker is someone who helps you shop for and compare the loan offerings from different lenders. They should be able to help you find the best loan for your qualifications.
The loan officer represents the financial institution responsible for processing your loan application. The loan officer decides whether or not you are pre-approved. That pre-approval will help sellers and agents view you as a viable potential buyer.
Real Estate Attorney
Not every home purchase requires the assistance of a real estate attorney. But in some states, you must use one. If you do engage a real estate attorney’s services, you can expect them to help you resolve issues related to title insurance, environmental laws, and generally work to protect your interests throughout the transaction.
The last thing you want to deal with right after you move in is a costly home repair. Hire a professional home inspector to uncover potential issues before closing including water damage, problems with the foundation, code violations, roof issues and more.
Chances are you won’t interact with the home appraiser directly. But you should know they determine the home’s value and ensure the lender the home is worth at least as much as you are planning to pay for it.
Working with the lender, the underwriter reviews and approves your loan after it’s processed. They investigate all the information on your loan application to ensure it’s true and correct. They also review your credit history, determine if you can afford the monthly mortgage payment and confirm the loan amount aligns with the home’s appraised value.
The closing agent – or escrow officer – works for the title company and finalizes the transaction. They review the title work, make sure the buyer’s and seller’s paperwork is in order and complete the closing. If you’re working with a real estate attorney, they may perform the same services as the closing agent.
Before closing on your mortgage, you must show you’ve purchased an appropriate amount of home insurance to protect the home from potential damage or loss. Work with a reputable insurance agent to help you determine the appropriate amount of insurance so you’re not under- or over-insured.
If it all seems a little overwhelming, our nonprofit housing counseling is a great place to start your homebuying journey.