My best advice for buying a home, especially if it’s your first home, is this:
Don’t do it alone.
Consider everything that’s on the line with a home purchase. For most people, a home is the most valuable asset they will ever have and the biggest financial investment they will ever make. While going solo may seem appealing because you can save a few dollars in the short term, it’s really a long-term mistake.
By assembling this four-person dream team of real estate professionals to help you find and purchase your dream home, you can do it right the first time—and avoid a lot of the pitfalls that trap homeowners in less-than-desirable loans or suck them into homes that are nothing more than money pits.
1. Real estate agent or broker
This is the most important member of your team, and you’ll be spending a lot of time with him or her. Think of your relationship as a short-term marriage. Your agent identifies the right property to buy and works with you all the way through the contract negotiation and closing.
How to find one: Drive around the neighborhoods in which you’re searching for a home and look for signs. You can also jot down the names and numbers of listing agents when browsing housing stock online. Note the more prominent offices and start your search there.
What you need to know: Set up an interview and ask the agent about the area in which you’re buying a home. Test the agent’s knowledge by asking what he or she knows about the housing market and community. Ask your potential agent about commission fees and structures as well.
2. A great mortgage lender
It isn’t easy to borrow these days, so good service is key. You want a lender that is willing to walk through this complicated process with you and who can find ways around potential roadblocks. At the same time, you want a lender who will offer you a chance to take advantage of today’s low interest rates.
How to find one: Talk to friends, family, co-workers, and colleagues and ask for their best recommendations. That means someone with whom they had a great experience and not somebody they half-heartedly recommend. If you don’t have enough good recommendations, then search on your own. Try to find at least one national lender, regional bank, local community bank, and credit union.
What you need to know: Get a list of at least four or five names and start calling. Run the lender’s name and the loan officer’s name through the NMLS Federal Registry to ensure they are registered or licensed. Finally, run the lender through Google and look for customer service issues. If a lender makes you uncomfortable in your gut, ditch him or her.
3. Home inspector
A good inspector can save you hundreds of thousands of dollars. Not only can you negotiate your purchase price based on issues found in the home inspection but also, because you won’t purchase a house with big issues that the homeowner has hidden, you’ll avoid big-ticket repairs and big headaches.
How to find one: Ask the other members of your dream team for their recommendations. They work with inspectors every day and know who is good.
What you need to know: Ask each inspector how long it takes him or her to do an average inspection. The answer you want is “Three hours or more.” If you want to see a good example of a home inspector in action, check out my YouTube channel, ExpertRealEstateTips. There, you will find more than a dozen videos that show my favorite home inspector walking through a 100-year-old house with me.
4. Real estate attorney
I’m married to a real estate attorney, so I may be a little biased, but I think an attorney is non-negotiable. Find someone you trust because that person needs to have your back. There are all sorts of crazy hidden things that can come up, especially if you’re buying a foreclosure or short sale. An attorney will help you navigate your closing and avoid surprises.
How to find one: Call your local bar association and ask for the head of the real estate committee, then ask that person for some referrals. Call those referrals, and be sure to speak to a few different attorneys to find the right fit.
What you need to know: Ask any attorneys you are considering about their experience, what kind of homes they close, in which areas they work, and what they bring to the closing table. Make sure they’re reasonably priced—you don’t have to pay $900 an hour—and understand what that fee covers. Always check online to make sure they’re licensed to practice in your state.
Don’t skimp on the members of your dream team. These people are going to save you time, money, and aggravation, in addition to helping you purchase your dream home.