Who's Who When You Purchase A Home?

YOU.. the BUYER

You've made the decision to buy a home. To stay in the driver's seat you must understand the participants in this transaction. Whether you have good income and strong assets, or some black marks on your credit record or shaky income, there is most likely a mortgage that for which you can qualify.

APPRAISER

Lenders need to know the value of the house you want to buy, based on the market condition in that area. Independent real estate appraisers - i.e. those not employed by a lending institution - are the people who provide this service. If the appraised value of the house is greater than the selling price - no problem. However, if the appraised value is less than the selling price, the lender will need to have a better understanding of the situation.

BUYER'S ATTORNEY

At the same time you begin working with a Mortgage Broker, you should meet with an attorney who has an in-depth understanding of the real estate laws where you are buying a home. Because there are many, frequent changes in banking and RESPA  law, a competent real estate lawyer will conduct at least 15-20 real estate transaction a year. He or she is watchful of your interests in all activities related to a purchase.

ENGINEER

Unless you are purchasing a new home (which will include a one-year's builders warranty), you will want to secure the services of an independent engineer to make sure that your new home meets the requirements of inhabitability, that the building is structurally sound, and that there are no defects or potential defects in the property. if you are applying for a non-conforming mortgage, the lender will require a copy of the engineer's report.

The real estate agent typically provides the engineer with access to the house. However, when a real estate agent recommends an engineer to you, you should take care to evaluate the "independence" of the engineer. Real estate agents are most concerned with selling houses as quickly as possible and could possibly select an engineer they believe is less likely to write a report that slows down the process.

In addition to examining the building for the structural soundness, the engineer will test for radon, asbestos, and lead content in paint, and will conduct testing of water, the septic system and well. Some engineers will also conduct inspections for pests including snakes, rodents and particularly troublesome insects. If they don't, they will refer you to a company that provides this service.

The engineer will issue is written report regarding the inhabitability of the house. Review this report with both your attorney and your mortgage broker. The attorney will know if there are any infirmities in the house that the seller must remedy prior to the closing. Other items that need repair can be negotiated. Your mortgage broker will know how the report will affect the loan.

MORTGAGE LENDERS (or "sources"?)

Financing for your home purchase can be arranged by a bank, a credit union, a mortgage banker, or mortgage broker.

• Banks and credit unions... offer a limited array of mortgages. If you don't qualify for one of their mortgages, there's nothing else they can do to help you purchase your new home. If you have a small downpayment or less-than-perfect credit, they are unlikely to be helpful. The bank officer in your local branch may not be a mortgage specialists. And because mortgages aren't the main business of banks and credit unions, they may not be staffed to help you figure out if you qualify without requiring you to complete long and complication applications and pay an application fee. The actual approval process may actually be conducted in another offices, and your paperwork may take weeks to travel back and forth. As a result, bank officials may have a difficult time speeding up their process to accommodate your needs.

•  Mortgage Bankers.. are financial services companies that specialize in mortgages. These organizations are typically licensed in the states where they are authorized to do business. A Mortgage Banker actually has funds to loan. They may also act as a Mortgage Broker.

• Mortgage Brokers .. specialize in helping buyers arrange for a mortgage. They are not lenders. Mortgage Brokers are licensed in the states where they are authorized to do business.

REAL ESTATE AGENTS AND REAL ESTATE BROKERS

These are the people who show you houses they think you'll like and can afford. They are paid by the seller. The more precisely they understand your ability to pay and your preferences, the more quickly they can make their money. Many real estate agents will not even spend time with you unless you present them with a mortgage pre-approval document. They are keenly interested in your ability to pay because they can't sell homes tot people who cannot pay for them. The typical real estate commission is 6%. Sometimes there are two agents involved in your transaction - the agent who was responsible for posting the property to the Multiple Listing Service, and the agent who actually sells the house. In that case, each agent gets 3%. When you purchase a home from a listing agent, there may occasionally be some additional flexibility for you, the buyer, (explain?)

SELLER

This is the person who currently owns the house you want to buy. They have reasons for selling. These reasons may sometimes become important factors in your ability to negotiate certain terms in your agreement to buy. The first step in getting the seller to sell their house to you is to make an acceptable offer.

SELLER'S ATTORNEY

This lawyer represents the seller, watches out for the seller's interests, and is paid by the seller.

TITLE COMPANY REPRESENTATIVE

This is a person you won't see until the closing. He or she is not necessarily an attorney, but will know a lot about real estate. Your attorney will have worked with this person before to make sure that the title of your new home is legally available to you.