It Takes a Village to Buy a Home: Who’s Involved?

Purchasing a home involves more than just the buyer and seller, it takes a team of professionals to ensure everything goes smoothly. Besides the key players in the transaction, your real estate agent will work closely with other essential experts to safeguard your interests. Here are the most important professionals involved in your homebuying journey.

Mortgage Lender. Get Pre-Approved to Strengthen Your Home Offer

The homebuying journey begins with setting a budget. Getting pre-approved for a mortgage is key; it shows how much you can borrow and helps you avoid falling for a home that's out of your financial reach. In a competitive market, a pre-approval makes your offer stronger and signals to sellers that you’re serious about closing the deal. There are six main types of mortgage lenders, and choosing the right one depends on how much personal interaction you prefer:

Direct Lenders: Ideal for competitive rates, fees, and personalized service.

Wholesale Lenders: Best if you need smoother approval and your credit could use some work.

Mortgage Brokers: Perfect for exploring various mortgage options, though you’ll need to pay a broker’s fee.

Correspondent Lenders: Great for those with excellent credit seeking competitive rates.

Portfolio Lenders: Suitable for those who prefer personalized service or have irregular income, like self-employed individuals or small business owners.

Hard Money Lenders: Good for quick funding and short repayment timelines.

Once you’ve determined the type of lender you need, take the time to shop around. Look for a local lender or ask your real estate agent for recommendations. Remember, getting a mortgage from your current bank might not offer the personalized experience you need. Your real estate agent will coordinate with your loan officer to ensure all financial documents are handled properly and the loan process proceeds smoothly.

Home Inspector. Protecting Your Investment Before Closing

Your realtor will arrange the home inspection and work closely with the inspector to understand the findings. Remember, inspections don’t have a pass or fail outcome—no house is perfect! The inspection may reveal minor repairs or uncover bigger issues that weren't obvious at first glance. While it’s rare, there are situations where we advise clients to walk away from a property. However, most of the time, inspections provide an opportunity to negotiate the price—on average, we negotiate $10K-$15K for repairs on behalf of our clients. If the repairs are extensive, we may even recommend terminating the contract.

Common inspections include home, termite, and sometimes radon or septic inspections. A reliable home inspector is crucial for avoiding future surprises. The inspection report will help you make informed decisions and negotiate any necessary repairs or price adjustments with the seller.

Appraiser. Ensuring You Pay the Right Price for Your Home

An appraisal is necessary to determine the fair market value of the home and ensure it aligns with the loan amount. Your realtor will coordinate with the appraiser to schedule the appraisal and ensure it is completed on time. They will also review the appraisal report with you to confirm that the property's value matches the purchase price and address any discrepancies that may arise.

The cost of the appraisal, which you’ll need to pay upfront, typically ranges from $400 to $1,000, depending on the size of the home, and it usually takes 3-7 days to complete. The appraiser will evaluate both internal and external factors, analyzing the market value in the specific area and conducting an on-site visit to assess the home's condition and features.

Keep in mind that appraisers are human, and mistakes can happen. If there are any discrepancies, your agent can provide additional information and request the appraiser to reconsider their valuation.

Title Officer. Ensuring a Clear Path to Ownership

A title company ensures that the seller has the legal right to transfer the property and checks the property’s history to make sure it’s free of any legal issues or liens. If any problems arise, the seller must resolve them before settlement. The title company also manages the settlement process, handling and disbursing funds and documents through an escrow account for everyone involved in the real estate transaction. Escrow is a secure, neutral holding area where funds and documents are kept until all conditions of the sale are met.

Your realtor will work closely with the title officer to make sure the title search is completed and any issues are addressed before closing. They also help arrange title insurance, which typically costs between $1,500 and $3,000 in Philadelphia, to protect you from future claims or disputes.

Escrow Officer. Safeguarding Your Funds Until Closing

An escrow account is a neutral third-party account that holds funds until closing day. As a buyer, you’ll usually deposit your down payment, often called “earnest money,” into this account for safekeeping. The funds remain in escrow until closing or until the contract is canceled. If the contract is canceled, the escrow officer ensures the funds are returned to the appropriate party. If you proceed to closing, these funds will be applied toward your down payment and/or closing costs.

The realtor works with the escrow officer to manage the escrow account, making sure all funds and documents are handled correctly. They keep you updated on the status of the escrow process to ensure everything goes smoothly on closing day.

Insurance Agent. Protecting Your New Investment

Is homeowners insurance required? While there's no legal requirement for homeowners to have insurance, mortgage lenders do mandate it. Having homeowners insurance is crucial because it protects you from the financial burden of repairing or replacing your home and belongings if they’re damaged by covered events, such as fire, theft, or natural disasters.

Your realtor can recommend reliable insurance agents and help you understand your home insurance needs. They ensure that you secure the necessary homeowners insurance and meet any additional coverage requirements before closing. This way, you can move into your new home with peace of mind, knowing you're protected against unexpected issues.

When buying a home, it's essential to do your homework to find trusted professionals, as their expertise is crucial for a successful transaction. From the mortgage lender to the home inspector, appraiser, title officer, escrow officer, and insurance agent, each plays a vital role in ensuring that every aspect of your purchase goes smoothly. A good real estate agent will already have established relationships with these experts and will connect you with the right people. Their guidance ensures that your interests are protected every step of the way, making the entire process less stressful and more efficient.