Homebuyers

When You're Buying a Home, You're Also Buying a Team

Getting to know all the people who will join you for all or part of your homebuying journey is like meeting new people on the first day of school or the first day at a new job. There will be a lot to process, which alternately will prove exhilarating and overwhelming.

But just as you triumphed (okay, survived) those tension-filled events, we're confident you'll come through the homebuying experience with flying colors, too.

However, to calm any lingering anxieties about the adventure you're about to undertake, let's make some early introductions so you'll better understand who these key players are and the distinct roles they will play in helping you find and finance a home:

Real Estate Agent

Your agent is your captain. Therefore, he or she must be knowledgeable, personable, patient, reliable, trustworthy, honest, direct, motivated, a solid negotiator, and committed to your success.

This leader also will have his or her own network of connections and resources to serve you before, during, and after the transaction – somebody who can recommend a top-notch lender or a plumber who will come out to your house at 11 p.m. on a Sunday to fix your leaky faucet.

To find such a saint, ask friends, business associates, members of organizations you belong to, and professionals in related fields that you use. Also, drop in at a few open houses in areas where you would like to live. The agents you meet will likely have a good knowledge of the neighborhood and perhaps possess exactly the qualities and style you're looking for. Observe how they interact with clients.

When you have three strong candidates, interview each one. Ask each agent to bring along a list of every transaction they've been a part of in the last 12 months. You may quickly discover that the agent prefers working with sellers and not buyers.

Additionally, ask how long they have been an agent if they work full-time, if they have a specialty (foreclosures, short sales, property type, etc.), and professional designations to match. If you must sell a property before buying your next one, pay special attention to how they market their properties. Do they offer professional photography (including video and drone) and staging? Ask how they will specifically market your listing.

Also, inquire about their team. The last thing you want to deal with is one of their assistants who rubs you the wrong way.

From their activity sheet, also ask if you can spot-check their references, which, when you meet or call them, may trigger a new set of questions. Above all — after asking these references if their agent followed through on their promises and represented their interests to the best of their ability — ask if they would use the agent again. This is the ultimate test of customer satisfaction. Also, Yelp your candidates to see what past clients are saying about them.

Buyers typically don't pay their agent a commission, so that's one expense you won't incur. That's usually the seller's responsibility. But if you have to sell first, anticipate paying a commission between 4 and 8 percent (harder-to-market properties may justify the higher commission). There has been downward pressure on commissions owing to new real estate players entering the market.

A point of note, unlike lawyers, real estate agents don't bill by the hour. Rather, agents do most of their work below the water line. It's said that good agents spend at least nine hours working behind the scenes for every hour spent in the presence of clients. So, seek a busy, competent agent, but also one who has the time to serve you well.

Real Estate Broker

When you're selecting your agent, you're also selecting their broker. It's a package deal. If your deal sails through, you might never meet the broker. However, should a buyer-seller dispute arise, you want to know your broker has your back and your agent's, too, with a deep bench of business, legal, and educational resources that either of you can readily access. The broker should be the acknowledged backstop of your team.

Lender

Unless you recently hit the lottery or received an inheritance, you will likely need to finance your home purchase and thus require the services of a mortgage lender. If you have solid credit and you're gainfully employed, lenders will knock down your door to serve you. Many homebuyers often start their search for financing with a financial institution with whom they already have a financial relationship for their checking, savings, and investing.

At the same time, many homebuyers will prefer working with a mortgage broker or a mortgage banker, who specializes in home lending. Mortgage brokers are independent contractors who shop various wholesalers for the best rate and then add their markup for their time and trouble, whereas mortgage bankers use their own or borrowed capital to originate and service loans in their name. Whoever you ultimately select should have the breadth of knowledge and experience to match you with exactly the right loan product for your needs. Also, ask each lender you're considering if they service their loans. Lenders who service their loans are often more accountable, not to mention easier to get on the phone if a mortgage payment issue or other discrepancy arises.

Property Inspector

An old real estate rule of thumb says to buy the worst house on the best block, then fix it up to live in or sell. But you could be Einstein and still not be aware of all the serious defects hiding in a home. Leaky pipes, faulty wiring, defective locks, uneven floors, termite-infested siding, missing roof tiles, etc.

Any one of these defects could cost you thousands of dollars in repairs, turning what seemed a housing bargain into a bust. So, in your defense, hire a qualified inspector who will examine your potential home from foundation to roof. Members of the American Society of Home Inspectors (ASHI) must have performed 250 property inspections to earn that designation, so the organization is a good source for referrals. Your real agent will likely be another source but remember that many home inspectors rely on business agents, so there could be a conflict of interest. Lastly, home inspections aren't intended to be X-rays of your home so out-of-view hazards like mold or asbestos may require calling in a specialist if you suspect these health threats exist.

Escrow Officer

If your broker is your backstop, your escrow officer is the umpire, the neutral third party that receives and disburses money or documents for the primary transacting parties. They are the bridge that gulfs the natural distrust between buyer and seller. Strictly speaking, they're not on anybody's team, but you need a good one on yours to ensure every detail of every transaction is buttoned up correctly to everyone's satisfaction. Real estate is a document-driven enterprise, where every "I" needs to be dotted and every "t" crossed!

Financial or Tax Advisor

A home is an asset, like stocks, bonds, or precious metals. If you're buying one, you need to understand how a home purchase will impact your overall finances. If you're selling, you need to know, among other things, if the sale will trigger a taxable event, such as a capital gain. The sooner you can integrate your advisor into your team the better; otherwise, you could be paying more than your fair share of taxes.

Attorney

You may need a lawyer who specializes in real estate, not your next-door neighbor who handled your divorce. Their input will not be needed in every transaction, but it's good to know you have one ready to come off the bench when his or her expertise is needed.

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Buying a home often involves a team of professionals. The more you know about who's on your team at the outset and the specific role each member plays, the more confident you'll feel about finding and financing a great home.