From the desk of Michael Sema:
Buying a home requires a team of pros including a Real Estate Agent, Attorney, Lender, and Home Inspector.
The biggest pitfall is making a swift decision about who is on your roster by going with the first person referred or someone that comes up in an internet search.
Don’t Trust Search Engines!
It's important to remember that Google, Yahoo or Bing are businesses out to make a profit. Surfing search engine sites are extremely convenient but also dangerous if not done correctly. Google, for example, lists websites on their first few pages by the amount of money they pay Google or by the sum of money they invest in marketing and content strategy.
Just because you see a site on the first page of Google doesn't mean that there the best company to help you. Let's face it how may times do we go to the second or third page of search results. Personally, 99% of my clicks are always on the first page of Google.
Why is this so important to remember? It's because of lead generating sites that charge industry professionals like real estate agents and mortgage companies to market their services. Whichever Industry professional or businesses pays the most, gets the most exposure.
It’s totally normal to get names and ideas this way, just interview them fully and ask questions -- lots of them.
Don’t simply rely on public reviews either - there’s no way to tell how trustworthy the reviewer is.
Another great tip is to ask questions like:
The key here is to be a conscious consumer. Do your homework and interview, interview, interview.
Say Yes To Using A Real Estate Agent Pro.
Agents are your right-hand-man, your home buying champ.
You should consider using a Buyer’s Agent. Remember, you don't pay them, the seller does.
Some great benefits of a buyer's agent are:
First date with a real estate agent: Grab some coffee, check out their office, make sure you get to know them and make sure they get to know you by understanding your short and long term goals of homeownership.
Second date: let them take YOU out to see if they understand what you're looking for, what kind of town you want to be in, what size home you need, what school system you want your kids in and much more.
For more information on what you should consider when on the home hunt, take a look at our blog post about the 10 point checklist: ultimate house hunt gameplan.
Make sure you pay attention to see if they're knowledgeable, professional or just pushy. I've personally worked with amazing agents that go out of their way to make sure I found exactly what I needed.
Agents that have ownership in their trade and are honest, ethical and hardworking will make sure you're fully protected and empowered. But I've also seen the complete opposite with agents that are strictly about the sale and who don't care about anything but their commission.
When it comes to an Attorney try to Scrutinize, Probe and Drill - just like they do!
Make sure your attorney specializes in Real Estate Law and has years of experience helping first-time homebuyers. Sure, the family attorney knows about Real Estate. But... if real estate is not what they specialize in, you risk oversights that might cause delays. You also need them to be available to answer questions timely and specifically.
Once a mortgage is secured, it’s a race against time. There’s a commitment due date in the contract, and if things aren’t done on time, you could end up losing your dream home.
One of the local Real Estate Attorney's we've worked with is Jove Juzmeski. (For a consultation, call 201-288-2250)
Show me the Money
Mortgage Companies. Not all are created equal.
Shop around! Get different rates and learn about programs that could meet your specific needs. Ask for ALL of the options you qualify for, not just the option they recommend.
What's the difference between a bank, broker, and a direct lender?
Well, think of them like different airlines that can each try to get you to your final destination, but with different fees, rates, guidelines, timelines, and types of service (mocktails!).
Banks are typically your local brick-and-mortar financial institutions which offer mortgages, checking, savings and other financial products.
Pro: Competetive Rates, Local Office, Other Financial Products
Cons: Lengthy Processing Timeline, Limited Loan Options, Mortgage Reps that only know and offer bank products, very conservative guidelines.
Brokers are licensed to sell home loan programs on behalf of lenders.
Pro: Non-Traditional Loan Options
Cons: Lengthy Processing Timelines, Not the Decision Maker on your Home Loan Approval or Closing, Higher Rates.
Direct Home Loan Lenders are your one-stop shop with a particular concentration in Home Financing. They typically have in-house underwriters and loan processors which help with underwriting turn times and real approvals.
Pro: Competitive Rates, Quick Turn Times, Wide Variety of Products, In-House Underwriting, One Stop Shop for Home Loan Products.
Cons: Do not offer other Financial Products like Checking and Savings.
If you feel rushed through the process, move on. No, seriously. This may be one of the biggest financial decisions of your life, so work with a company and professional willing to walk you through every step of the process.
Make sure to ask how much you should buy, not can buy. The banking industry has been broken for years. Home Loan originators are still incentivized and compensated by commission so remember just because you can qualify for a certain amount of a mortgage doesn't mean you should. Interview the company, find out how many years your home loan rep has been in the business, what the Better Business Bureau (BBB), Google Plus, and other third party companies have to say and shop, shop, shop.
[Important Tip] You can have your credit report ran by more than one lender within a 30 day period without your credit scores being affected more than one inquiry. The credit bureaus want you to shop, especially when it comes to your #1 investment, so they won't penalize you when you do.
Inspectors. Calling all Type-A’s!!
Make sure you find a home inspector that’s there for you. One who's looking for issues that could be detrimental to you and your family -- like foundation problems, termites, shoddy plumbing (plunging? No thanks!).
It’s easy to go with whoever's recommended to you to save time. But be careful and make sure to work with a company that solely represents you and has an excellent track record of working with homebuyers.
Don’t Get Us Wrong
Referrals are great! But like fingerprints, each buying situation is unique so do your due diligence and make sure the shoe fits. If you don’t, you could end up losing time, money and even your dream home. The process moves quickly, so it’s critical to have an All-Star team.
You got this! We have faith in you.