Choose Your Team Wisely When Buying A Home

Buying a home is considered to be the American dream, but mistakes or mishaps can happen, which could make it a nightmare. From applying for a mortgage to finding yourself in a bidding war, it can be difficult for any homebuyer to go at it alone. This is why it's essential to have an experienced team, including the parties listed below, to manage all the moving parts and guide you at every step of the home-buying process.

1. Mortgage Lender

Most people need a mortgage to finance their home purchase. But there are many different types of mortgages and tons of lenders you can work with. The mortgage lender you pick plays a primary role in your home-buying experience, so meet with multiple lenders and review all your loan options before committing.

It is recommended that you work with your mortgage lender before looking at homes. Based on your income and other financial assets, your lender will let you know the loan amount you could be approved for, which is called a mortgage pre-qualification.

The next step is to be pre-approved for a mortgage. The lender's underwriter will examine your income, credit score, debt-to-income ratio, projected down payment amount, and other factors to approve you for a specified loan amount. Then you'll receive a mortgage pre-approval letter confirming how much home you can afford, and this shows sellers that you're a serious buyer.

2. Real Estate Agent (Buyer's Representative Agent)

Finding the ideal home in your price range and making sure it has all your must-haves is only the beginning of the role your agent plays in this process. Your realtor also helps determine your offer amounts, negotiates with sellers on your behalf, and can advise you best in bidding wars.

Typically, sellers pay the buyer's agent commission, so you get all the benefits of working with a realtor, yet the cost will not come out of your pocket. Your agent can also connect you with the other professionals you need on your team after the seller accepts your offer.

It's extremely important to make sure you pick the right real estate agent. You must trust them and ensure they're knowledgeable and experienced in the local area where you want to buy.

3. Home Inspector

The home inspection is critical when buying a home as it protects you from potential issues and major repairs the house may need. The home inspector you hire will assess the house for structural issues and other potential problems that only professional inspectors are trained to identify.

The home inspection report will confirm that the house is in good condition; if not, it will give you more negotiating power with the seller. Home inspections are usually included as a contingency with your offer, which allows you to back out of the deal depending on the inspection's results, or you can ask the seller to cover the costs of repairs needed.

4. Homeowners Insurance Agent

Buying a home is a huge financial investment, so you'll want to protect it with homeowners insurance. This covers your home and personal property if it's damaged by fire, other natural disasters, and from theft.

Most home insurance policies offer protection in these four categories: structural coverage, personal belongings coverage, liability protection, and coverage for additional living expenses (ALE). The coverage you choose should depend on your home's location, age, and condition, and a qualified agent can advise you accordingly when picking your policy.

5. Title Officer

Your title company also plays an essential role in your home purchase because they examine public records to ensure the legality of the home's title and look into any outstanding mortgage payments or existing property liens that could affect the transfer of ownership. They also provide title insurance which protects you as the buyer and your lender if someone else claims ownership of the home at some point in the future.

At closing, your title officer will ensure the new title, deed, and other necessary documents are completed and recorded. Your lender or realtor may refer a title officer and company they've worked with before, but ultimately, you pick the title officer you want on your team.

6. Home Appraiser

Once the seller has accepted your offer and the home goes under contract, your mortgage lender will require a home appraisal. This is an unbiased, professional evaluation of the home's value based on its size, location, condition, and features. Most importantly, it ensures your lender is not issuing a loan for more than the property is worth.

As the home appraisal technically protects the lender, the lender is the one who picks the appraiser, but you, as the buyer, are responsible for paying the appraiser's fee. Having an experienced appraiser is crucial to determining an accurate home value, which ensures you are not paying over its fair market value.

When you're ready to start your home-buying journey, make sure you have the most qualified professionals on your team, so your purchase can proceed quickly, smoothly, and stress-free.