Besides needing cash and credit to purchase a home (See "What You Need to Buy a Home: The "Two Cs"), there are a number of real estate professionals you will be working with to get your first home loan pre-approved, assist you in selecting a home and negotiating with sellers, ensure that both you and the seller meet the requirements for the real estate transaction, as well as other aspects of home purchase.

Knowing who you need to by buy a home will help you streamline the buying process, and help you avoid those who may make big promises during your home search, but not have any substance behind their claims (see "Predatory Lending" for more information).

• Real Estate Agent: Both the buyer and seller may enlist the assistance of a real estate agent, a professional licensed by the state to specialize in selling property. A listing agent works on behalf of the seller; he or she has contracted to advertise the property and represent sellers on their side of the transaction. On the other side is the buying agent, who represents a buyer by working with the listing agent and/or seller to purchase a home.

Both agents obtain commission upon sale, which is paid by the seller. Additionally, one agent can represent both the buyer and the seller, so as long as they maintain their legal obligation as an agent to be fair and honest to both parties.

• Lenders: Your home loan options are offered from and approved by a lender. A lender can be a bank, credit union, mortgage broker, government agencies, or private investors who can offer the funds necessary in exchange for returns through interest, all of which is secured by home you will buy.

• Escrow/Escrow Officers: Until the sale of the home closes, your contract to purchase with the seller is in escrow, or a holding service and account that ensures that all obligations by the seller and buyer are met before property legally changes hands. Depending on the state you live in, there may be a separate escrow entity, or an attorney that performs the same function as an escrow agent.

• Insurance Agent: The insurance agent helps you obtain the right level of coverage for your property. You will need homeowner's insurance once the home is yours in case of damage or liability for accidents that occur on your property.

There are other players who ensure that the specific conditions of the home's title, as well as the home itself are appropriate for you to make the home purchase:

• Title Officer: Ensures that the documentation behind the property is free and clear, and that the person selling the home actually has the right to sell. There are also additional protections through title insurance that will maintain your right to the property (and its equity) should there be problems with the title after purchase

• Appraiser: There are numerous benefits of an appraiser's services. First, a lender will have an appraiser value the home in order to make a determination of the amount they are willing to lend your for a home.

However, if you are willing to take the time and pay the fees to hire an independent appraiser prior to going into contract or escrow with a seller, they can evaluate the home for you, so that you can make a smarter offer that is based on the actual condition of the home, and not just the seller's sentiments.


References


Neighbor Works America. Realizing The American Dream

Federal Trade Commission. FTC Consumer Alert

Freddie Mac. Don't Borrow Trouble