The Other People Involved

Oct 17th, 2007 @ 9:43 AM by MortgageMentor

Buying a home is a complicated transaction.  Consumers are often overwhelmed with the decisions and implications.  It is not as easy as it looks on HGTV!  The process has a number of professionals involved whose job is to ensure that the transaction goes smoothly and various interests are protected.  It is in your best interest to know whose these other people are and what their roles are in the process of your home purchase.

Mortgage Broker/Banker (Loan Originator):  They provide the money to purchase the home.  Unless you are independently wealthy, you will need a mortgage.  It is the loan originator’s job to ensure you qualify for a mortgage and to arrange for the financing.  At the day of close, if the money isn’t there, the deal falls apart.

Buyer’s Agent:  This Realtor represents your interest in the transaction.  Their job is to assist you in finding the home of your dreams and help you negotiate the best price possible for the home.  They act as a general contractor and ensure that the transaction makes it to closing.

Seller’s Agent:  This Realtor is tasked with selling the property.  They may also be known as the listing agent.  Their job is to get the highest price possible and sell the home in the quickest amount of time.  Like the buyer’s agent, they are working to ensure the seller is fairly represented and that the home gets sold.

Buyer’s Attorney:  In many states, buyers often have attorney’s represent them in a real estate transaction in regards to the legal issues.  It is the buyer’s attorney’s job to ensure that all contracts are fair and that you understand them.  However, buyer’s attorneys earn their fee when things go wrong or there are disagreements with the seller.  The buyer’s attorney should also review all closing related documents at the closing to ensure you understand what you are signing.

Seller’s Attorney:  The seller’s attorney is representing the seller’s interest in all legal matters.  Like the buyer’s attorney, their job is to protect the seller if things go wrong and ensure they understand the legal implications of the transaction.

Inspector:  The home inspector is hired by the buyer to point out all the warts on a property.  They are looking for defects that could cost you money in the future and/or should make you reconsider purchasing the home.  Hiring a home inspector is the smartest thing a buyer can do.  Not hiring one is the dumbest.  Home inspectors usually cost a few hundred dollars, but it is money well spent.  If the home inspector finds something seriously wrong with the property, the realtors and attorneys use this to negotiate for additional drops in price or other credits.

Appraiser:  The appraiser is hired by the loan originator.  The lenders want to know that the property you are purchasing is worth what you are paying for it since it is the property that is ultimately securing the mortgage.  The appraiser views the property and compares it to “comparables” or homes that are similar and in the same neighborhood.  He then makes an educated guess as the value of the property.  In most cases, the appraiser will value the home just slightly above the purchase price.  However in this market, it is becoming more common (although still relatively rare) for the appraisers to note that values may be declining or the property is over priced. 

Underwriter:  While the buyer will never talk to the underwriter, you should be familiar with this person.  They are God.  Their job is to approve or deny your mortgage.  The loan originator cannot approve a mortgage because it would be a conflict of interest.  Lenders employ people who are trained at assessing the credit risk of a loan and ensuring it fits within the banks guidelines.  Often times when you talk with your loan originator, they may mention the “file is with underwriting.”  In short, it is the underwriter’s job to double check your loan originators work.

So there you have it.  These are the people that you will become intimately familiar with during your home purchase.

2 Responses to “The Other People Involved”

1. Fanny Blicker says:

   January 1, 2012 at 6:48 am

   Thanks for the interesting dialogue, and it was positively entertaining. I shall certainly be a returning visitor.
2. Melida Scatenato says:

   February 7, 2012 at 3:28 am

   Thanks for pointing out the ideas. Definitely enjoyed The Other People Involved Smart Borrower Blog Thanks Melida Scatenato