You’ve been boosting your credit score, saving up for a down payment, and creating your dream home wish list for months. You’re basically ready to move into your perfect new home, right? Not really. The buying process can be complicated, and even if you’ve seen 400 episodes of “House Hunters,” you’re probably not an expert.
That’s where your real estate agent comes in. They’re like a personal mentor to guide you through one of the biggest financial decisions of your life.
HouseLogic teamed up with REALTOR® Dale Chumbley of Camas, Wash., during a Q&A on Facebook, to answer your questions about how to work with agents and lenders. For the entire conversation, visit HouseLogic’s Facebook page.
#1 When to Reach Out to an Agent
Q: It’s probably unrealistic to think you can buy a home entirely online, but when and how does a real estate agent come into the process?
A: We know that almost all buyers now start their home search online. Listing sites are a great way to get familiar with the general marketplace and what’s going on in it, but you really need a local agent to understand the idiosyncrasies of any given neighborhood. Someone who's working every day in the market you’re considering can help you decipher some of the nuances you don’t get when you browse online and direct you to the right area for all your home needs.
Once you have a general sense of your home wish list, start reaching out to agents and having conversations about what you’re looking for. The best way a buyer can find an agent is through the recommendation of a trusted resource. Ask your friends and family who they have worked with in a particular area, and try to interview a few agents so you can find the right fit.
Look them up online to read their reviews and get a feel for their level of business. And make sure you work with someone who you enjoy spending time with. Finding the right partner early in your buying journey can save you a lot of hassle later on down the road.
#2 How An Agent Helps You
Q: What sorts of things can real estate agents help with that most people don't know about?
A: A good real estate agent is with you far beyond the actual transaction.
During the transaction itself, agents help you organize inspectors, contractors, and anything else that’s needed for the logistics of the home buy. They also can put you in touch with a great lender from the beginning.
After closing, your agent can continue to be your resource for any repair work you might need or help answer any general questions you may have about home improvement ROI, financing, and more.
A great agent should be a mentor and resource, so make sure you have someone by your side who can help guide you through your whole home ownership journey.
#3 How To Switch Agents
Q: Is it possible to switch agents without making anyone feel badly or causing problems?
A: If it’s not working out, and you're under a buyer-broker contract, you'd need to work out the legalities of closing out that formal agreement with your current agent before moving on to someone new.
If you aren't under contract and the relationship isn’t working for you, speak up. Have a heart-to-heart with your agent, and clearly explain what you need and why you feel you aren’t getting it.
[Whether you're under a contract or not,] share your honest feedback, and give your agent a chance to get back on track.
#4 How to Decide Between an Online vs. Real-Life Lender
Q: You can get a loan online or from a bank in person. What do you think is the best approach, and why?
A: From my experience, the real-life mortgage broker tends to be the best. Having the ability to sit down face-to-face and have a conversation about your overall financial goals and how real estate plays into them is very important. An expert lender who can help you navigate the whole buying process makes for a better, less stressful experience all the way around.
I also believe you have a better competitive advantage when working with someone you have an in-person relationship with and that you can reach whenever you need to. There’s nothing worse than wanting to write an offer on the weekend and not being able to get a lender letter until Monday when your online loan officer is back in the office.
As for the loan, I’d recommend sticking with a mainstream mortgage broker or trusted bank. Keep in mind, if something appears "too good to be true," it often is. If you have a red-flag feeling, listen to your gut.
#5 The Loan Process
Q: The loan process can seem a little scary. Should buyers expect their mortgage lender to help them through all the financial and paperwork details, or are they on their own? What should buyers get together in terms of finances before even reaching out to a lender?
A: The loan process can definitely feel overwhelming, especially if you’re a first-time buyer. But if you have a lender who has strong experience and with whom you have a good relationship, they can absolutely guide you through all the finer points of the loan process and make it as smooth and painless as possible.
You should try to meet with mortgage lenders as soon as possible. People often think they need to have everything exactly in order before connecting with a lender, but you really want to allow the lender to help you get ready. They can give you the road map to buying success as they evaluate your financial information, step by step.
Even though it’s a major commitment, I think buying a home shouldn't be a scary or daunting project. If you have positive relationships with your agent and lender, the journey can and should go smoothly. (And be fun!)
#6 How to Choose the Loan
Q: If you've been pre-approved by, say, three different mortgage lenders that offer pretty similar loan terms, what's the biggest differentiating factor when selecting a final lender?
A: In selecting your final choice for lender, you want to make sure you choose someone you feel comfortable with and who is competent to help all the way through the process. I would also lean on the expertise of your agent and who they have a relationship with; that can help streamline communication between all the parties involved in the transaction.
#7 Deciding on the Loan Terms
Q: If you're more confident about the monthly payments on a 30-year mortgage over a 15-year, but you're not planning to stay in your next home for decades, how do you know which type of loan to pick?
A: This is where having a lender that can help you look at your overall financial situation becomes critical, and it can be another major difference between an in-person relationship and one you’ve made online.
Particularly if you’re a first-time home buyer, you need that person who can walk you through each step of the financial process and explain the pros and cons of all the different loan types to help you make your best educated decision.
#8 Getting an Attorney Depends on Which State You're In
Q: How important is a real estate attorney? If I'm considering employing one for my home purchase, at what point in the buying process should I reach out?
A: [Whether to use a] real estate attorneys varies from area to area. In some parts of the country it’s standard practice to employ one, but where I’m from a real estate attorney is never brought into the home buying process unless there’s an actual legal issue.
I would make sure to talk to your agent and ask them if it’s something you should be doing where you live.
At the end of the day, both agents and lenders are there to make you feel comfortable, confident, and prepared over the course of your home buying journey. Trust your instincts, and be honest about your needs and financial situation; the right partners will guide you to the perfect fit.