Home buying experts you should know (and what they know)
Home buyer counselor
Sadly, the home buyer counselor is the most neglected expert. Only a small percentage of first home buyers know we exist–you know, the smart ones. The ones who take advantage of down payment assistance programs and get educated about the process.
I won’t spend my whole morning rewriting what I covered here about how a home buyer counselor can help you or where to find one. But if you don’t know about these amazing generalists, check it out.
Housing counselors are experts in:
- Fixing credit.
- Home buyer education.
- Referring you to other experts who are ethical and competent.
- Qualifying you for first home buyer programs, like matched savings plans and low interest mortgages.
Housing counselors are not experts in:
- Making you take their advice if you choose not to.
- Areas better covered by other experts.
- Balancing the needs of a few clients who don’t need much help while earning a very high salary and working in an office with lots of resources.
You meet with a mortgage originator early in the process to decide what type of loan you qualify for and its terms. A mortgage originator will run your credit, review your income and debts and give you an amount you can probably afford to pay for a house.
They do not make the final decision. The mortgage underwriter reviews all your paperwork against the standards for the loan they are offering and makes sure it fits. But mortgage originators have their own expertise.
Mortgage originators are experts in:
- The terms and guidelines of the mortgages their company offers (a few, really special originators will even refer you to another company if they can’t help you).
- Quickly figuring out how much you can afford based on the current terms of their loans.
- Knowing what proof you need to gather to demonstrate your ability to repay a mortgage.
Mortgage originators are not experts in:
- Knowing what you feel comfortable paying each month despite their recommendations.
- Whether the amount they’ve preapproved you to borrow is enough to buy a decent house in your market.
- Helping you analyze if their program or another one is the best fit for you. For that, see a home buyer counselor.
Buyer’s real estate agent
Thanks to the marketing efforts of the largest real estate agent professional organization, the National Association of Realtors, everyone knows about real estate agents. But many people don’t know the true benefits of working with a smart, hard-working agent.
Yep, there are some bad agents out there like in any profession. But if you found a stinky one, be encouraged that there are savvy agents too that can provide a number of benefits to your house search.
Real estate agents are experts in:
- Knowing what kind of house you are likely to find for the money you have to spend.
- Comparing the features of different houses with their sales prices to figure out the likely value of the house you wish to buy.
- Negotiating an agreement with a seller.
- Completing all the steps in the process that will get you to closing.
Real estate agents are not experts in:
- Figuring out if you can stretch to afford a house just a bit more expensive than your lender preapproved you for.
- Determining if a house’s structure is sound.
- Finding you a Lamborghini Aventador house on a Kia Spectra budget.
It’s no secret that I think paying a home inspector is the best money you’ll ever spend. Your home inspector is an independent voice. He gets paid whether you decide to buy a house or not. That’s marvelous.
Make the most of this expertise. Go on your inspection. Read the written report thoroughly. Rely on it for making future repairs to your home. And if you don’t end up buying a house you have inspected? Congratulations, you just saved yourself mucho money and hours of aggravation.
Home inspectors are experts in:
- Determining the condition of a house based on what they can see.
- Looking at a house in a thorough and systematic way.
- Knowing what’s typical construction for a particular area.
Home inspectors are not experts in:
- Giving cost estimates for work that needs to be done. Call a contractor.
- Advising you on whether you should buy a house or not.
- Seeing through walls.
I recently spoke to a group of homeowners about how to be good landlords. I wrote a disclaimer for their packet of materials stating that I was not a lawyer and could not give legal advice. I pointed that disclaimer out at the beginning of the workshop. And yet, I continued to be asked questions about the legality of this or that or whether a lawsuit on a particular subject was likely to succeed.
Listen, I am not a lawyer. I do not play a lawyer on TV. I certainly don’t get paid like a lawyer. So don’t ask me legal questions unless you want me to end up in jail for practicing law without a license. After first, of course, giving you really incompetent legal advice. If you want legal advice, ask a lawyer.
Some states, like mine, require an attorney to conduct real estate closings. In other states, a title company or escrow agent will conduct the closing. You’ll find a handy map to tell you what’s true for your state here.
Even if you aren’t required to have an attorney, it might be a good idea to have one review your purchase contract. It’s especially important if you have strange conditions with your property like easements or an oil or gas lease.
Attorneys are experts in:
- The laws of your state. Duh.
- Crafting agreements that will benefit one party or another.
- Dealing with potential conflict by negotiating solutions.
Attorneys are not experts in:
- Every area of legal expertise. It’s why I’m not a fan of having your divorce attorney handle your real estate closing.
- Keeping things simple.
- Providing advice at a low cost.
When you buy a house, experts come out of the shadows
You have lots of experts to help you buy your first home. Make sure you’re asking the right expert the right questions and you are well on your way to having a satisfying home buying experience.