A who's who guide to buying your first home
Before you buy a home, you should have it inspected to understand its condition.
A home inspector will evaluate all major systems and components of the home, documenting and explaining anything that is unsafe, inoperative or damaged, says Steven Richer, owner of Primo Home Inspections in Farmingdale, N.Y.
"The inspection can provide peace of mind, or the issues found can be reasons to not buy the house, ask for a reduction in price, (ask) for a monetary credit, (ask) that repairs be made prior to purchase, or to budget the repairs needed," Richer says.
Wolf says a home inspector is the "first line of defense in terms of your knowledge base for the property you're going to buy."
In addition to the general home inspection, there are dozens of specialized inspections. A lender may require a pest inspection before you can get a loan. But you can also hire specialists to inspect the home's foundation, roof, electrical system, sewage system or chimney, for example. General home inspectors may recommend one of these detailed inspections based on something they find.
Richer says some buyers will skip the inspection if a home is new, recently renovated or appears to be in good shape. But he says that this can be dangerous because of all the hidden problems an inspection may uncover.
And Bray says the inspection report is a great baseline for a homebuyer to have. It may tell you that the roof will need replacing in five years, for instance.
"It's nice to get a written guide to what the systems in your house are that need watching and what to look back at," she says.
A closing agent is a neutral third party who is in charge of all the details of your home-purchase agreement. This person also is called an escrow agent, escrow officer, closing officer or title agent. Depending on the state in which you are buying a home, this person will likely work for a title or escrow company.
This is a detail person who focuses on whether the money is where it should be and whether the deal is going to happen when it should, Bray says.
A closing agent is part of the entire transaction but becomes a major player toward the end of the process. This person is "absolutely vital and important," Wolf says.
Here are a few of the details a closing agent will handle:
- Perform a title search and arrange for title insurance.
- Coordinate with your lender and the seller's lender to make sure the money transfer is completed.
- Establish an escrow account for any deposit you make; this will be transferred to the seller when the deal closes.
- Record the deed that transfers the property to you.
In addition to the five major players in your home purchase, you may need the help of some of these people, depending on your state and your transaction:
Real-estate attorney: In some states, real-estate attorneys are a standard part of the process and draw up the purchase contract. But you may want to use one even if it's not required where you live. If there is any legal issue, such as claims against the property, problems with the title or a co-ownership issue, hire an attorney. And if you're buying a home in a development that has a homeowners association, an attorney can help you wade through the covenants, conditions and restrictions that will govern your community.
Tax professional: In her book, Bray says a buyer may want to consult an accountant or another tax pro to learn how to take advantage of the tax benefits of buying a home.
Insurance agent: Don't forget that you'll need homeowners insurance. Bray says she advises buyers to shop around and figure out which company will offer the best coverage, based on their needs. It's also important to look for an agency that has good customer service. If everyone in your area is facing disaster all at once, such as after Hurricane Katrina, how easy will it be to file a claim?
You'll also interact with a notary during the closing process and representatives from utility companies as you set up utilities. If you are remodeling or renovating your new home, you may hire a contractor.
The total number of people you have contact with will vary. First-time buyer Andrew Martin, who bought a house late last year with Wolf's help, interacted with at least 15 — four from the loan company alone.
The key to a smooth homebuying process is to understand who does what and to pick the right person for each job. Do your research and interview anyone you may want to hire, starting with your agent. Nolo.com has sample interview questions to ask real-estate agents.