Building your buyer's brain trust
Working with the right team, like finding the right property, can make buying a whole lot easier.
Home prices may have bottomed out. But maybe not. Financing requirements are tougher than ever. Purchasing a home “is one of the most stressful things on the planet now,” says Chris Smith, president of Capstone Mortgage Co. in Lexington. But great help can, well, help. “You need to surround yourself with people you trust and who have expertise that you do not.” How do you find those people? Start with recommendations from family and friends, then use these tips to put together your ideal home team.
REAL ESTATE AGENT
Of course, you can hunt for properties yourself; online sites such as Zillow and Trulia can reveal whether that lovely condo abuts a noisy truck terminal. But a warm-bodied real estate agent, the right one, can walk you through the buying process as well as the home you’re considering.
“There are three types of agents – seller’s, buyer’s, or [those] representing both,” says Lateef Okenla, a real estate agent with Boston-based Neighborhood Assistance Corporation of America, which promotes affordable homeownership. “The first thing a buyer should be aware of: Will this person be representing my interests or looking out for their own pockets.” A buyer’s agent has allegiance only to his or her client.
If you know where you want to buy, see whether certain agents’ names keep popping up online or on signs in front yards – that can indicate someone familiar with your desired area. Call and ask the agent if he or she works with sellers only or with buyers, too. (Most buyer’s agents take a cut of the listing agent’s commission, but some charge buyers a fee.) A well-connected agent might even be able to get you a peek at a desirable property before the open house.
Your agent should be a good listener. If he or she keeps showing you properties that don’t reflect your interests, you may not be a good match. “It’s not just experience that matters,” says Fred Pizzi of Lawndale Realty Inc. in Belmont. “Having a comfort level matters a lot, too.” Also, if you’re looking for a condo, it’s probably best to avoid agents who focus on single-family homes, and vice versa.
Make sure your agent is accessible. Some work part time, which may limit their availability for showings or delay getting answers to your questions, but it can work if his or her schedule matches yours. You’ll also want to check if his or her preference for e-mail or phone jibes with yours – you’ll be communicating a lot.
MORTGAGE BROKER OR BANKER
It makes sense to get preapproved for financing before putting a foot in your first open house – it helps you set a realistic budget, preventing you from falling in love with a house you can’t afford. Buyers can use mortgage brokers such as Capstone’s Chris Smith to sort through multiple loan options or work directly with lenders.
Choose a mortgage originator with whom you feel comfortable and can communicate easily, Smith says. Your realtor can suggest names, but ask whether the people recommended are affiliated with the agent’s company to avoid potential conflicts of interest. You can also look online or walk into a bank. If you’re unfamiliar with a company, don’t necessarily write it off; you can check it out with the Better Business Bureau in its home state.
When evaluating loan offers, read the fine print and ask for an explanation. “Special” promotional offers probably have “special” conditions. Get everything in writing (that goes for online offers, too, which you should print out and keep on file). If you don’t understand something, ask. Then ask again. It’s your mortgage broker’s or banker’s job to make sure you understand the loan conditions to which you eventually agree.
REAL ESTATE ATTORNEY
Although buyers aren’t required to use an attorney in Massachusetts, it’s wise to hire one even before you make an offer. “[Real estate] brokers like easy transactions where people sign offers and lawyers are not in a position to make waves,” says attorney Edward FitzGerald of Cambridge. “I like to get involved at the offer stage. After all, offers are enforceable contracts.”
While personal references are useful, you should still interview several attorneys. Ask whether you’ll be dealing directly with them or an assistant (this can affect cost as well as the speed at which your questions are answered) and make sure that real estate closings represent a large portion of their business.
You’ll also want to find out what your attorney is likely to cost you. Some charge by the hour, so you’ll want to know when the meter starts and stops (does a three-minute call cost the same as 15 minutes?); others can give you an estimated flat fee, one that assumes no major complications come up. For a single-family home, expect to pay between $500 and $1,000, or slightly more if you’re buying a condo.
Hire a lawyer who will represent you all the way through the closing. “Some people try to save money by having their lawyer review the purchase-and-sale agreement and then not attend the closing,” FitzGerald says. “But if something is going to go wrong, it usually happens at the closing table.”
Once you’ve found and made an offer on a property, you need a home inspector to make sure termites haven’t discovered it first. “There is no perfect house, so you need an inspector who is able to relay information without blowing things out of proportion,” says Mark George of Home Inspection Associates Inc. in Methuen and Dedham.
Because inspectors cannot tear down a wall to check something out, choose someone who knows about building or renovating homes. Inspectors are licensed by the state, so you can make sure everything is up to date at this address: http://license.reg.state.ma.us.
Be wary of bargains – saving a hundred bucks makes little sense when conducting due diligence on a six-figure investment. Expect to pay $300 to $500 for an inspection, though a big, old home will always cost more than a new condo. (Things like radon tests will typically add to the final bill.)
Be sure your inspector will provide you with a detailed written report, not just a checklist. Ask a potential inspector what a typical report includes and ask to see a sample.
In the end, inspection results might lead to some price negotiation between you and the seller, but the inspector is not permitted to give you estimates for repairs. Your agent or a contractor can help put a price on them before you get to the bargaining table.
Phil Primack is a frequent contributor to the Globe Magazine. Send comments to firstname.lastname@example.org.