Whether you are buying or selling a home, it’s to your advantage to be familiar with the team of professionals typically involved in a real estate transaction. Why? When you know who these professionals are and what they do, you enter your transaction a more informed consumer. You have a better understanding of how each professional contributes to the process and how these experts work together as a team to help you successfully close your real estate transaction. Armed with this knowledge, your result is a smoother, fairer, and timelier process. And to help you achieve just that, an overview of this team of professionals follows:
Financing in the form of a home mortgage is a critical component of most real estate transactions. That mortgage provides the money needed to complete the purchase. Lending sources for home mortgages include institutions such as banks, credit unions, and mortgage companies. Buyers also have the option to secure a mortgage with the help of a mortgage broker. These brokers are licensed professionals who are essentially middlemen between buyers/borrowers and lenders. They work for a commission or finders fee that is typically paid by the lender. The broker’s role is to shop lenders to find a mortgage with terms and conditions that best meet the buyer’s needs and circumstances.
Real Estate Appraiser
So, what is the property worth? The answer to this question is important to the buyer, seller, and lender, although for different reasons. As a buyer you want to ensure you are not paying an inflated price for the property. If selling, you want to do so at the highest possible price. Lenders want to minimize loan risk. For them, the property serves as collateral for the mortgage, and they want to ensure that collateral is adequate in case the loan is not repaid. These divergent reasons and interests are why a professional real estate appraiser plays an important role in your transaction. The appraiser is an independent third party who, after performing a thorough assessment process, provides an impartial opinion of property value. Lenders use that appraised value as a factor in determining the mortgage loan amount.
The role of a home inspector, who is also an independent third party, is to perform a complete physical inspection of the home including major components and systems. Results of the inspection are usually delivered in the form of a comprehensive report that details property condition. As a buyer, this report helps you make informed decisions about pricing negotiation and moving forward with your purchase. A pre-listing inspection, one performed before a home goes on the market, will give you an opportunity as a seller to make repairs before prospective buyers come calling. If you choose not to make repairs, you will still be in a more informed position to set price and disclose any adverse conditions.
Real Estate Attorney
Protecting your interests is important no matter which side of the real estate transaction you’re on. This is what attorneys do and why they are important in this process. A lawyer can draft, review, or advise on contracts, offers, and other documents as well as provide legal advice and help resolve matters that arise during the transaction. They also explain legal rights and obligations for both buyers and sellers and can handle the closing, the final step in your real estate transaction. Another very important way an attorney protects the interest of buyers is by ensuring that the seller is conveying clear title to the property. In other words, that the title is free from liens, taxes or any other defects that would adversely affect ownership.
Insurance Broker or Agent
Insurance brokers and agents are licensed professionals who help buyers with insurance needs. In most cases, the lender will require proof of property insurance in order to close the transaction. Once again, the lender is seeking to mitigate their risk. Property insurance is considered acceptable security for the loan in the event that the home, the lender’s collateral, is destroyed due to an unfortunate event.
Real Estate Sales Professional
Licensed to handle real estate sales transactions, real estate brokers and agents can play a major role from the beginning of a real estate transaction through its successful completion. Their role can best be described as orchestrating the various components of the transaction. This includes serving as a valuable resource for information about the market, communities, and specific properties; coordinating people and paperwork; simplifying complexities of the transaction; guiding clients through the process; and handling the nitty-gritty aspects of the transaction. In addition, a real estate broker or agent can often help you locate the other professionals mentioned earlier.
As you can see, these professionals all play different and important roles in a real estate transaction. Being informed about how they can help you is beneficial whether you are buying or selling. Keep in mind though that even when working with these professionals, you are still the decision-maker in your real estate transaction. These professionals are not there to make decisions for you but rather to provide information and advice that will help you make informed decisions. This in turn results in a more successful, stress-free, and rewarding real estate transaction for you.