There are many players in the homebuying process, and each has an important role. But it is better to know these roles and how you are going to interact with each professional before the process begins. Don't worry, this is not knowledge that you would casually come across if you haven't purchased a home before. If you are getting ready to purchase a home or considering taking those first steps into the market however, then it is a good idea to get acquainted with the following players:
Realtor or real estate agent
There is often some confusion when it comes to a realtor, versus a real estate agent. The difference between the two is that a real estate agent earns the designation of realtor by having advanced credentials. While real estate agents have to pass certifications, realtors are members of the National Association of Realtors, which means they have to uphold standards of the association and its code of ethics, according to Realtor.com. Essentially, they play the same role in the process as far as you are concerned.
"Know the roles before you interact with the players."
So what is it that a real estate agent actually does? Well, he or she acts as your resource when purchasing a home. A real estate agent is a valuable resource, as he or she can help you negotiate an offer and address common problems that might occur. While going through the home purchasing process without a real estate agent is possible, it is highly recommended that you work with one, as he or she can make the process much smoother.
The appraiser is someone you might not even meet as the homebuyer, but this role is crucial to the process. An appraisal is a service provided by an independent third party to ensure the value of the home is as stated. This means conducting an analysis of the property to determine its market value.
The appraisal of a home often comes after pre-approval and before final approval. The reason for the appraisal is to protect the lender as much as you. If the home is listed for more than the market value, then the lender may not provide the larger loan, and you shouldn't be willing to pay that amount.
A mortgage lender can provide financing for your new home. While there are many different types of lenders, ranging from nation-wide lenders to local offices, finding one you are comfortable with is key.
A mortgage lender will consider your financial situation, including any debt and your debt-to-income ratio, before approving you for a loan. After finding a lender you work well with, you may go through several steps which may include pre-qualification, pre-approval and final approval. All steps are important, and it is best to get pre-qualified before you even start your house hunting, as this will give you a basis for how much you can reasonably afford.
It is recommended that you obtain a home inspection of the property you wish to purchase to make sure the home is in good shape. While home sellers should be reporting the accurate condition of the home, there might be items that the home inspector finds that were not previously reported.
When you have the property inspected it gives you assurance that the property is in good order, but it also provides you with negotiating power should something be discovered.
These are only a handful of the roles you will come across when purchasing a home. For more players in the process, stay tuned for the second part of this piece.