The Team and the Players
You don't have to become an expert in property values, mortgages, tax and real estate law, title insurance, escrow, pest-control work, and construction techniques in order to play the house-buying game well. Instead, you can hire people who've already mastered the skills that you lack. Home buying is a team sport. Your job is to lead and coach the team, not play every position. After you assemble a winning team, your players should give you solid advice so you can make brilliant decisions.
Because you probably don't have an unlimited budget, you need to determine which experts are absolutely necessary and which tasks you can handle yourself. You are the one who must determine how competent or challenged you feel with the various aspects of the home-buying process.
Here's an overview of the possible players on your team:
- You: You are the most important player on your team. Sooner or later, another player is bound to drop the ball or fail to satisfy your needs. You have every right to politely, yet forcefully, insist that this person make things right. Remember that you hire the players on your team; they work for you.
- Real estate agent: Because the house that you're getting ready to buy is probably one of your largest investments, you want to protect your interests by having someone on your team who knows property values. Your agent's primary mission is to help you find your dream home, tell you what your home is worth and then negotiate on your behalf to get the best deal.
- Real estate brokerage: All states issue two different real estate licenses: one for salespeople (agents) and one for brokers. Real estate brokers must satisfy more stringent educational and experience standards than agents do. If your real estate agent is not an independent broker or the broker for a real estate office, the agent must be supervised by a broker who's responsible for everything that your agent does or fails to do within the course and scope of the duties of a real estate sales professional. In a crisis, your transaction's success may depend on back-up support from your agent's broker.
- Lender: Because most folks can't pay all cash for their homes, you probably need a loan to buy your dream house. A good lender offers competitively priced loans and may even be able to help you select the best type of loan from the financial minefield of loan programs available today.
- Property inspectors: A house's physical condition greatly affects its value. Your dream home should be thoroughly inspected from roof to foundation before you purchase it to ensure that you actually get what you think you're buying.
- Closing officer: Mutual distrust is the underlying rule of every real estate deal. You and the seller need a neutral third party, a closing officer, who'll handle funds and paperwork related to the transaction without playing favorites. The closing officer is the home-buying game's referee.
- Financial and tax advisors: Before you buy a home, you should understand how the purchase will fit into the context of your overall financial situation. You should address the issues of what your financial goals are and, given those goals, how much house you can afford.
- Lawyer: You may or may not need a lawyer on your team, depending on your contract's complexity, where your dream home is located, and your personal comfort level. The purchase agreement you sign when buying a home is a legally binding contract. If you have any questions about your contract's legality, put a lawyer who specializes in real estate law on your team.
Each player brings a different skill into the game. Assemble a great team, and they will guide you through any situation that may arise during your transaction. Keep in mind that good players act as advisors -- not decision makers. Decision making is your job. After all, it's your money on the line.