Who gets involved when I decide to buy a home?

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There are many players involved in the sale of a home . Knowing who they are, who they work for, and what they do can save you a time and money.

The real estate agent (realtor) is the first person most people think of when looking to buy a home.  If you engage a realtor’s services, you need to choose someone you are comfortable with and who you trust to represent your interests.  The buyer’s agent may charge an hourly fee or may be paid a commission by the seller based on the final sale price.  Either way, buyer’s agents do not have financial incentives to minimize the sale price; they have only reputational incentives.  Choose a realtor with a good reputation.  A realtor can be very helpful and has many resources at his or her disposal to assist you in the selection and transaction processes.  A good buyer’s agent will be an asset when negotiating the price of a home.  Beware of realtors who offer to represent you as buyer when they are already representing the seller at the same time.  It would be prudent to hire your own realtor if you need one.

Here are some other key players:

The Seller
The seller currently owns the property.

The Lender
The lender is a financial institution that finances the buyer’s purchase through a mortgage.

The Inspector
The home inspector is trained and licensed to perform an examination of the condition of a home. The inspector will look for signs of mold, fungus, wood decay, dry rot, water damage, and termite infestation. The inspector will provide a written report of findings to help the client and lender make an informed decision. The report should contain suggestions for remedial and preventative measures as well as cost estimates. If problems are discovered that had not been disclosed by the seller, the buyer has the option of using this to negotiate a lower price or requesting that the seller fix the problems. The lender will require the buyer to hire an inspector, whether of their choosing or of the buyer’s choosing.

The Surveyor
The surveyor locates and describes the precise boundaries of the parcel for sale. This is necessary to ensure that the buyer gets what he is paying for. The inspector will ensure that the boundaries and lot size described on the deed are accurate, and that neighbors are not encroaching onto the property in question. Encroachments can lead to legal costs and potentially to an easement by prescription or by prior use. (An easement gives another party the right to use land without possessing it.) The lender will require the buyer to hire a surveyor, whether of their choosing or of the buyer’s choosing.

The Appraiser
The appraiser estimates the property’s market value.  Lenders will require an appraisal to ensure they are not lending more than the value of their collateral.  The appraiser may be an employee of the bank or insurance company, or the buyer may be permitted to hire an independent one.

The Attorneys
Though not necessary, buyers and sellers may choose to be represented by an attorney who specializes in closing real estate transactions.  Attorneys will examine the title and the transactional documents before the closing.  They will explain the implications of the various documents so that you don’t have to spend hours examining the fine print, and they will ensure that everything is accurate and legally adequate.