1. The Mortgage Broker (Lender)
Most of us want to have our own homes, but planning is very important. If you are decided to purchase a home, preparing your finances is the first thing you have to think about.
The most common mistake people make of owning their own home is they go out and look for the best home they desire. They give their time and effort in searching for the best home for them, without even getting their mortgage approved. You don't want to get frustrated or become sad by receiving a call from your lender letting you know that you are not approved for loan to purchase your dream home.
You can avoid such circumstances and situation if you have a pre-approved amount for a mortgage first. You have to fill out a loan application, make sure to fill out the application completely, write legibly and bring all neccesary documentation with you to the lender.
The items that may be needs to get the loan approved are.
- last 2 years of tax returns including the W2's.
- last two months of bank statement.
- most recent pay check stubs.
- any retirement statements
In doing so, you will have better chance in having your mortgage approved faster. By having a pre-approved, you will then know the amount you can afford to buy a home.
2. The Real Estate Agent
This is the single MOST important professional role in helping you find a home. A real estate agent is a person who professionally deals with the buying and selling of real estate properties. He is a kind of a bridge between a buyer and a seller. By law, a real estate agent is required to be highly qualified individuals.
Your realtor’s job is to:
- Help you find the ideal home.
- Write an Offer of Purchase/Contract.
- Negotiate on your behalf to help you get the best possible deal.
- Disclose all important information regarding the property and terms of the deal.
When selecting your agent, ask questions-especially about the services that they provide and any possible service charges. Sellers normally pay commission to the Real Estate Brokerage, but under Buyer Agreements sometimes the buyer may have to pay a fee to the Real Estate Brokerage. Use a checklist for interviewing and evaluating Real Estate Agents. Agents have ethical obligations, that you can find out by contacting the local Real Estate Board or visiting the Board website.
Once you have found your dream home, it is time to have your realtor write up an Offer (purchase contract) based off of the term you have discussed with your Realtor, present the offer to the selling brokerage and/or homeowner, follow-up to find out if your offer has been accepted or rejected. When it is time to sign the offer be sure to ask questions of your realtor and go through the purchase contract carefully and slowly.
3. Escrow Company
Escrow is one of the most popular processes used in closing a sale. It is present in any kind of real estate transaction because it is secured. Everything from calculation and declaration of closing costs, pro-ration of funds and obtaining of legal documents are done accurately.
You might be wondering questioning how it works. To help you learn more about escrow, read the following sections:
Defining Closing of Escrow
Closing of escrow simply means the closing of sale. However, in this transaction, a neutral party (called the escrow agent) will be sought to take care of the tasks required in closing the sale.
There are various kinds of payment and documents to obtain, for the completion of the closing phase. In reality, both the buyers and the sellers would have a hard time tracking what is needed. To facilitate the completion of the closing phase, the closing agent is hired. And in here, it is performed by the escrow agent.
Escrow services are obtained from an independent company that specializes on such. However, a lawyer or representative from the title company can be appointed to perform this.
To proceed with the closing, the escrow agent will be issued a document called escrow agreement. In this form, he or she will see the different tasks needed to be accomplished, the charges that need to be collected and the manner of disbursing the payment. But to visualize the detailed version of the escrow agreement, read the items below:
- Demands for the performance of title search and production of the Title report.
- Converses with the lender to get a beneficiary demand payoff.
- Receives the Inspection and Termite Reports.
- Pursuance of the new loan agreement and fulfill the contingencies demanded by the lender.
- Determination and declaration of the closing cost using the HUD-1 Settlement Form.
- Holds all payments given by the buyer and the seller.
- Holds the new loan fund obtained from the new lender.
- Pro-rates the aggregate closing fees and disburses them to the right parties.
- Provides copies of legal documents to the right parties.
- Registers the Deed of Sale for full transfer of ownership to the buyer.
- Demands for the Insurance Policy.
Selecting the Right Escrow Agent
There is no such thing as the perfect escrow agent. However, you can only find the rightful one. And this can only be determined by the buyer and the seller. These two are the main parties and the decision on who to select should be within their hands. It is upon their discretion who they want to make the escrow agent just as long as he or she is competent and trustworthy.
To select the person for escrow, they have to be screened carefully. The main parties may also seek the guidance of a broker (since they are quite knowledgeable in this area).
Charges for Obtaining Escrow Service
If you get a professional service for Escrow, there may be separate charges for it. The fees can differ per location. The main parties can be charged for the operations and the calculated risks involved with the process. On the other hand, if you obtain a title company representative or lawyers, they may also have their own fees.
There are no standard charges for this service. Therefore, shopping or inquiring for it must be achieved first (before deciding which to select) to obtain only the best.
4. Appraiser
No two properties are identical, and all properties differ from each other in their location. This is why appraisal in a property must consider an abundance of factors.
A real estate appraisal is performed by a licensed or certified appraiser. Many qualified and reliable appraisals attempt to acquire the true market value of the property. It is important to know the difference between market value and price. A price paid for a property may or may not represent that property’s market value. Special arrangements may have been made, such as a relationship between the buyer and the seller. It is the task of the real estate appraiser to judge whether a specific price obtained under a specific transaction is accurate of the market value.
Let’s take a moment to definition the value used in an appraisal analysis. Selecting comparable data for use in the analysis is critical for establishing fair market value. The most commonly used method is the “sales comparison” approach. This approach examines the price or price per square foot of similar properties being sold in the area. In other words, the sales of properties similar the property in question will be noted. The sale price is then adjusted to show the differences in the comparables. You’ll find this approach is generally considered the most reliable method of appraisal.
Real Estate appraisers can make sure you get a fair deal. When you hire an appraiser, you’re hiring a professional you can trust.
5. Home Inspection
A home inspection is limited, non-invasive examination of the condition of a home. Home inspections are usually conducted by a home inspector who has the training and certification to perform such inspections. The inspector prepares and delivers to the client a written report of findings. The client hen uses the knowledge gained to make informed decisions about their pending real estate purchase. The report described the condition of the home at the time of the inspection but will not guarantee the future condition or efficiency of the home or its components.
An inspector will check the roof, heating/cooling system, water heater, structure, plumbing, electrical and many other aspects of the property. They will look for any required repairs, general maintenance issues as well as some fire and safety issues.
A home inspector is sometimes confused with a real estate appraiser. A home inspector determines the condition of a structure, whereas an appraiser determines the value of a property
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