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Who are the People on Your Home Buying Team?

By
Real Estate Agent with 774.289.5521

When buying a home in Central Massachusetts, you need a team of people working for you. I'll explain who they are and how they get paid.

The first people you'll bring onto your team are your Buyer's Agent (Realtor), and your Mortgage Broker. Some people will meet the Mortgage Broker first and they'll tell you to start looking for homes. Other people will meet the Realtor first and he/she'll ask you to get pre-approved by a Mortgage professional)

BUYER'S AGENT - Your buyer's agent works for you. I highly suggest that you sign a contract with your buyer's agent which should say that you promise to work with only 1 agent, and that agent promises to work fully for you. You don't get any benefit out of using many agents. You will save time by letting your agent really get to know you, your wants and your needs. If you call the number off the sign in front of a house that you like, you will most likely get the seller's agent on the phone. That agent can help you write an offer, but they DO NOT work for you. They are contracted to work for the seller.

A buyer's agent gets paid out of the "proceeds of the sale", which means they get paid at closing. The way it works is that a home seller contracts with their agent to sell their home for X percentage of the sale. Typically it's 5 or 6% so a $100,000 home will give the selling agent $5000-6000 at closing. They don't get to keep the whole thing. They will offer the buyer's agent a percentage of the sale, typically 2.5% or in some cases 3% of the purchase price.

MORTGAGE BROKER - You can go directly to your own bank to apply for a mortgage or you can use a Mortgage Broker. I suggest that you apply at both your bank and 2 Mortgage Companies to see who can give you the better deal. The mortgage person gets paid at closing as part of your closing costs. You should also ask them to estimate what your closing costs will be when deciding who to go with. Some companies charge more than others.

HOME INSPECTOR - After you choose your home you may decide to have a home inspection. I highly recommend that you do this, even if the seller said the house is being sold As-Is. It's always good to have a clause in your offer that allows you to walk away if the house isn't structurally sound or has other major problems with it that you aren't in a position to take on.

Your home inspector will be paid by you out of pocket. In this area, expect to pay around $550. They don't like to get paid when the home closes because there is a possiblity that you will choose not to purchase this home after the inspection report comes back - depending on what the report says.

OTHER INSPECTIONS - You may want to have other inspections such as a radon inspection or a termite inspection or even a mold inspection. These inspections are paid for by you.

YOUR ATTORNEY - In Central Massachusetts you hire an attorney to represent you. This attorney will draft the Purchase and Sale agreement, which is the legal document that comes out of the Offer to Purchase that you wrote and any changes to the Offer that happened during negotiations both before the home inspection and after. Your attorney gets paid at closing out of the proceeds of the sale.

THE BANK - I said "The Bank" and not "Your Bank" on purpose. If you are using your bank to get a mortgage, then you know who your bank is and it is Your Bank. But if you are using a Mortgage Broker, you most likely won't come in contact with The Bank. The Bank will have it's own attorney and will also hire the appraiser. The Bank gets paid as part of your closing costs at closing.

THE APPRAISER - The appraiser is hired by The Bank and works for The Bank. The Bank wants to know that the house they are putting up thousands of dollars for is worth the money they are putting in to it. If you offer $110,000 for a house, the house must appraise at least that much or The Bank won't issue a mortgage on that property. The appraiser gets paid at closing as part of your closing costs.

So, those are the people who will help you in the home buying process. Take your time and choose a Dream Team of people who are working for your best interest, not their own pocketbooks.

Comments (1)

Michele Miller ~ REALTORĀ®, LMC, HSE, CHS, SRES, CMRS
ERA Key Realty~Worcester County Realty Group - Worcester, MA
'Helping You Make the Best Move"

Very informative post Crystal!

Nice talking to you over the weekend.

Glad to hear that you are doing well. Take care.

Sep 07, 2011 02:10 PM