Buying a Home: Who is Who?
Who's Who When Buying a Home
When buying a home in Sarasota or beyond, you want to know all the players involved in your real estate transaction. Do you know the difference between a home inspector and a home appraiser? Between a mortgage lender and a mortgage broker? Between a real estate agent and an exclusive buyer agent? If not, read on ...
A mortgage broker assesses your financial needs and plans, and then shops around to find you the best deal (lender and loan) to fit your particular needs and plans. A mortgage broker should be able to offer a wide variety of financial options to you. For instance, if you have a child going to college soon, this may impact the type of loan you want. However, since mortgage brokers work on commission, they charge a fee (points).
When you go directly to a lender, you're removing the middleman, but you're also narrowing your options. However, by doing your own research, you can select the right lender for your circumstances. When you go directly to a lender / bank, a loan officer will help you pick a product from the lender's offerings.
A home appraiser works on behalf of your lender. After your offer has been accepted by the seller, your lender will send an appraiser to estimate the property's value before approving your home loan. Your lender wants to ensure that your purchase is worth the amount of money you're borrowing. The appraiser offers a neutral opinion of the property's value; he or she has no vested interest in a sale. If you're paying cash, an appraisal is not required. However, we highly recommend that you obtain an appraisal regardless. A low appraisal may change your mind about purchasing the property.
A home inspector works on behalf of you, the buyer. Just as your lender sends out an appraiser, you'll need to send out a home inspector to ensure that the property is in the condition stated by the seller. A home inspector assesses all the major systems and parts of a home, and explains and documents anything outdated, damaged, or dangerous. If the home inspector discovers problems with the property, you may decide not to buy the house, or you may use the information to bargain for a price reduction, or for the seller to make the repairs prior to your purchase. If the property has unusual features, you may need to consider specialized inspections. When a house is new, some buyers want to skip the inspection, but we recommend obtaining a home inspection regardless. Even a new house may have hidden issues an inspection can uncover. Before you hire a home inspector, make sure you read our questions for home inspectors.
Also called an escrow agent, escrow officer, closing officer, or title agent, this is a neutral third party in charge of the details of your property purchase agreement. A closing agent performs a title search and arranges for title insurance; works with your lender and the seller's to ensure the money transfer is concluded; establishes an escrow account for any deposits you make; and records the deed that transfers the property to you.
When buying a home, it's vital to have an agent working on your behalf, and an Exclusive Buyer Agent comes with extra benefits. It is free to enlist an Exclusive Buyer Agent to represent you in Florida, and not only will EBAs guide you step-by-step through the buying process, they will also do an incredible amount of legwork for you if you live out of state or out of country. An Exclusive Buyer Agent can tell you which reports are necessary, which inspections to get, whom to contact, or whether something is a deal-breaker. With specialized training and experience, an EBA has 100% allegiance to buyers, negotiating on your behalf for the best property, price and terms for you and your situation. An EBA will answer your questions, put together a search plan, show you properties, guide you through the process, and find the property that's right for you. Since an EBA doesn't cost a cent in Florida (the seller usually pays the commission), it makes little sense to go without one. Unlike an EBA, a traditonal real estate agent works for BOTH sellers and buyers, and may face a conflict of interest, hoping a buyer will purchase a particular listing from a seller.