If you’ve never gone through the process of buying or selling a home, you might be surprised to learn about all of the different people involved in the entire process. Handling a sales transaction takes several weeks, and there are often plenty of interactions via the telephone and several meetings to attend. As you approach closing day, several key people become a part of the real estate transaction.
THE BUYER OR SELLER
You can’t have a real estate transaction without both a buyer and seller. However, you probably won’t spend much time interacting with the other party during the process. If you do an in-person closing, you may see them at this meeting. However, most of the back-and-forth dialogue and negotiations beforehand will occur between your realtor and the other party’s realtor.
THE LENDER
The lender is one of the most important people involved in the process, and if you’re buying a home, you will probably speak with a lender before you do anything else. The lender will distribute the funds you need to purchase your home. Early in the process, reach out to a lender to begin the process of pre-approval. Your lender will ask you questions about your debt-to-income ratio and current credit score. They may ask to see tax returns or recent pay stubs. Once they have a clear idea of your current financial state, they will tell you what size loan you qualify for and what interest rate the loan has.
Different lenders will offer different interest rates, so speak with multiple lenders to see who can offer you the best rate. While you won’t officially secure the loan until you go under contract to purchase the home, a seller will probably want to see a pre-approval or pre-qualification letter before they agree to sell you their home.
THE INSPECTOR
Once you go under contract to buy or sell a home, an inspector will assess the property. They are looking for possible foundational, structural, or mechanical concerns. Once they are finished, they will let the buyer know what they found, and the buyer can decide if they want to renegotiate the deal or walk away if there’s a major issue. Because this inspection usually happens during the option period, the buyer would only pay a small fee to terminate the deal.
In a competitive market, a buyer may offer to waive the inspection contingency to make their offer look more appealing to the seller. As a seller, you may consider ordering a home inspection ahead of time so that you’re aware of any potential issues before this point in time.
THE APPRAISER
A home must be appraised before the buyer can secure a loan for the required amount. An appraiser will take several factors into account, such as the condition of the home and recent sales in the area, to determine the current market value of the home. This information is shared with the lender because they need to know the home’s resale value if the home forecloses. If the home doesn’t get appraised, the lender may not distribute the necessary funds. Some contracts have an appraisal contingency to protect both the seller and buyer in these types of situations.
THE TITLE COMPANY
The title company acts as a neutral party during a real estate transaction, and their job is to make sure the seller has the legal right to transfer ownership of the home. They will perform an inspection on the history of the home’s title to ensure that nobody can claim ownership besides the seller. They may also help administer the closing or transferring funds. When working with a title company, you may interact with an individual or with several employees of a company.
THE INSURANCE AGENT
Most lenders will require you to secure home insurance. Even if home insurance isn’t mandated in your area, it’s still highly recommended. Home insurance will protect your home from possible fires, natural disasters, and theft. It can also cover bodily injuries that might happen because of issues in your home. You’ll most likely work with a local home insurance agent to determine what type of coverage you need for your home.
THE REALTOR
In all likelihood, you’ll work more with your realtor than anyone else during the process. Everything a real estate agent does should be in your best interest. They will help you find homes and create a compelling offer if you’re buying. When selling, a realtor can help you list, market, and show your home. They will assist you in negotiations on a contract, and they will be at your side through the closing to answer any questions.
While some people choose to work without a realtor, many find that a realtor makes the process much easier. If you’re ready to enter the real estate market, either as a buyer or seller, contact Brandon Carney. His impressive market knowledge and wide network of colleagues and contractors will be a tremendous asset.
