Before you consider buying your first house, it is important to understand the real estate process and how to avoid common pitfalls that can lead to your transaction falling through. There are many professionals involved in a real estate transaction; they include: the real estate agent, private home inspector, loan officer, title company representative, and others. Each of these individuals will have an integral part in closing your transaction. It is important to make sure you choose competent and qualified individuals to represent you in your home purchase. The following list displays what each of the professionals involved in your home purchase are responsible for and how their experience and competencies will help ensure your transaction closes in a timely manner.
• Real Estate Professional – The most important representative a buyer or seller has in a real estate transaction is the real estate agent. Therefore, choosing an experienced and competent agent is essential to closing your transaction. A knowledgeable agent will help you negotiate your offer, mediate any issues found during the private home inspection or bank appraisal, assist in the mortgage approval process, and follow-up with the title company to ensure the closing documents are correct and ready in time to close. If any issues arise during the mortgage or closing process, your real estate agent’s experience will likely be invaluable in keeping the transaction together.
• Private Home Inspection – Before purchasing a new home, it is always in a homebuyer’s best interest to have a private home inspection completed. It is important that you choose a licensed and experienced private inspector. Ask your real estate agent for names and phone numbers of inspectors that they have worked with in the past. A private home inspector will not only look for deficiencies in the home, but they may be able to perform inspections, such as: mold, radon, pest, lead-based paint, well (water), and septic.
• Mortgage Lender- Mortgage financing can be complicated, always choose a well-respected experienced mortgage professional. Many people prefer to choose a lender that they can meet with face-to-face. If you have any problems with the mortgage, it is typically easier to resolve them if you can go to their office and explain any issues. After you complete the loan application, try to avoid any major financial changes. If you alter your financial picture prior to closing the mortgage, it may result in a denial. In addition, there are many situations that you should avoid, these include: changing your job after your mortgage application, undocumented deposits (cash), and new debts.
• Title Company – In most transactions, one of the real estate agents involved will choose the title and escrow company. It is important to talk to your real estate agent about the title company being used and to contact the title company representative once your purchase agreement is accepted. They are responsible to make sure that the closing documents are correct and that there are no liens or issues on the closing documents or title. The title company will also check for outstanding liens on the property, bankruptcy issues, if there are other owners of the property, and any public record errors.
Once the purchase agreement has been accepted, it is important to understand that there are many steps that need to be completed prior to the house transferring into your name. It is in your best interest to refrain from giving notice to your landlord, putting the utilities into your name for the new house, or paying for a moving van or moving company prior to being given notification of your final approval. It is important to have realistic expectations and patience when purchasing a house. Stay in touch with your real estate agent to keep informed of the progress on your transaction and try to resolve any issues that arise immediately, so you can keep the transaction on track for closing on time.