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Who's who in homebuying

By Zak Stoiber

March 2019

There are many people involved in the process of finding a house and getting a mortgage. Understanding everyone’s role can feel overwhelming, especially if you’re only familiar with renting – think the cast of Friends compared to Cast Away (like Wilson, my landlord was unresponsive and a bit of an airhead). Before entering the exciting and potentially stressful homebuying process, get acquainted with the main players in the cast.

The loan officer (aka mortgage loan originator, mortgage lender)

The loan officer is your main point of contact for financing and granting your mortgage. You may want to talk to a loan officer before you even start looking for homes – they’ll walk you through your financial options and help answer some key questions:

  • How much house can you afford? 
  • How much might you need for a down payment?
  • What types of mortgages are available, and what will work for you? Fixed-rate or adjustable?  15 or 30 years?
  • Do you qualify for any down payment assistance programs that can lower your up-front costs?

Getting prequalified before you start home shopping can provide a guideline for how much house you can afford and keep you from wasting time looking at homes outside of your budget.

Once you find the right home and your offer is accepted, the loan officer will then help you secure the actual mortgage. Considering the factors listed above in combination with the final cost of the home, you’ll lock in your interest rate (they may have changed since you’ve been prequalified) and complete the mortgage application.  

TIP: While getting prequalified is optional, it can help you save time and anxiety! 

Real estate agent (aka listing agent, Realtor®)

While not every home seller enlists the help of a real estate agent, most do. In 2018, 87% of purchases were through a real estate agent or broker. The real estate agent helps sell the home by hosting open houses, scheduling visits, and providing guidance to the seller. If the home you’re interested in is being sold by a real estate agent, chances are that agent is also working to sell a variety of homes in the area – they’ll be more than happy to work with you to help you find a home that suits your needs. Just remember that, at the end of the day, this type of real estate agent is trying to sell the home and is working for the seller’s best interests, not yours.

TIP: Don’t be afraid of working with multiple agents, especially if you’re searching for a home in different areas – each agent can only know so much and will specialize in certain neighborhoods and/or types of homes.

Buyer’s agent (aka real estate agent, Realtor®)

This can get confusing so I’ll try to keep it simple – along with the listing agent who works on behalf of the seller, you can also choose to work with a buyer’s agent, also known as a “selling agent.” (Told you it’d get confusing). The buyer’s agent will work on your behalf to find a home that meets your specifications, offer general guidance and help you write an offer to purchase. 

Most of the time you don’t pay a buyer’s agent – at least not directly. Any real estate agents involved in the transaction are paid by a commission deducted from the seller’s proceeds of the sale. If a buyer’s agent is involved, a seller might raise the asking price of the house to compensate for the additional cost.

TIP: Even though you won’t be paying for the service of a buyer’s agent directly, the additional cost may be reflected in the price of the home.

Home inspector

You should never judge a book by its cover – or buy a home without a home inspection. Like the title implies, a home inspector will inspect the home after your offer has been conditionally accepted and before finalizing the purchase. 

If the inspector notices anything that hasn't previously been disclosed, like bad wiring or plumbing issues, you can adjust your offer to account for these extra expenses (or back out of the deal entirely if you included a home inspection contingency in your offer). Unlike loan officers or real estate agents, you’re going to have to pay your home inspector out of pocket, usually around $300 to $400 – a small price to pay for peace of mind.

TIP: While it’s a good idea to ask friends, family or your real estate agent to recommend a local home inspector, you’ll also want to ensure they’re certified by the ASHI. You can also use the website to search for one locally.

Real estate attorney (aka lawyer)

An attorney (or 2) may or may not be present at the closing. For the minority of states that DO require it, it’s important for you to note that these attorneys will be representing the lender and not you. Although a closing agent (see below) should be able to handle any questions or discrepancies that come up during the closing, they represent both sides. Hiring your own lawyer can give you confidence knowing that you have someone representing your best interests. They can also help negotiate the price or repair agreements if the home inspection or title search turns up anything of concern.

The price of a real estate attorney can vary quite a bit and depends on the services you request (as many bill by the hour), but you’re likely to spend at least $300.

TIP: The value of hiring a real estate attorney may be the most difficult to quantify among all the roles in the mortgage process; talk to your loan officer or friends and family with homebuying experience to help decide if hiring one is right for your situation.

Closing agent 

The closing agent is like a great cameo – their presence is brief but memorable. The closing agent usually works for the title or escrow company (or in some states may be an attorney) and acts on behalf of all parties to ensure that the closing goes smoothly. If any issues crop up, they’ll help resolve them. Once everything has been signed and the documents received, they’ll finalize the transaction, hand you your keys, and you’ll be on your way to your new home!

TIP: Although you may not meet your closing agent until the day of the closing, don’t hesitate to reach out before the closing to ask questions and validate that they have the correct information on file.

Reginald Williams

Good information

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Zak Stoiber is a digital marketing specialist at MGIC and recently ditched his roommates to live in his own apartment, bringing him one step closer to full-blown adulthood. He enjoys reading books, some of which do not contain pictures, and is looking forward to owning a home one day so he can expand his board game collection – the dedicated shelf is already full.