• Don’t choose the wrong mortgage: With the advent of instant refinancing, home loans are no longer the lifetime obligations they used to be. Still, you don’t want to be saddled for even a short period of time with the wrong mortgage. Investigate all of your options. Be sure to look at initial interest rates, future interest rates and payments, and the possibility of prepayment penalties.
• Don’t confuse pre-approved and pre-qualified: These are debatable terms in real estate because not all lenders define them the same way. In fact, one leading real estate dictionary contains neither expression because their definitions are uncertain. According to one school of thought, when you are pre-qualified, the lender is making an educated guess about how much you can borrow based in information you have provided. When you are pre-approved, the lender has verified everything you have told him or her and is offering to lend you up to a given amount at current interest rates under certain conditions. Either or, final clearance is subject to an appraisal satisfactory to the lender, good title, a last minute credit check, and other verifications. When meeting with lenders, always ask how they define each term and what additional steps will be required to actually obtain a loan.
• Don’t lie on your loan application: Exaggerating your income on a mortgage application or putting down other untruths can be a federal offense. Lenders rarely prosecute liars, but if they find out later, they can call your loan due and payable. Make sure the truth is always presented so that they can help you with a program that works best for you.
• Don’t hire just any real estate agent: All real estate agents are not the same. You want to work with an agent who is a top producer and full-time real estate agent. Also keep in mind that not all real estate agents are Realtors®. There is a big difference. Realtors® must follow a code of ethics as well as belong to their state association and National Association of Realtors®.
• Representing agents are not all of the same: Buyers agents, listing agents, and dual agents (representing both the buyer and seller) are obligated and hired by one party or the other. A buyer’s agent is strictly hired by the buyer to represent them. When a listing agent is hired as a buyer’s agent as well in one single transaction, that agent has a fiduciary responsibility to the seller. It is obviously difficult to represent a buyer to the best of her or his ability if they know the comfort zone of both the buyer and seller. Let a separate buyer’s agent work hard just for you.
• Who pays the Buyer’s agent?: The buyer’s agent is paid by the seller unless there is a separate agreement set by the buyer and buyer’s agent. When a listing agent lists a property for sale, they sign a listing agreement with the seller to setup payment for the buyer’s agent as well. Because a buyer’s agent is already set responsible for a buyer, make sure you have someone looking out for your best interests and not their own, whether that be the seller or the agent. As your buyer’s agent, I will work hard for you to make sure you receive the best deal possible and are well represented to the best of my ability.
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