Real Estate 101: Picking Your Lender

I often say "there are a lot of moving parts" to a transaction. In fact, first time and veteran home buyers often tell me how surprised they are at how complicated the process can be. And usually they follow that with "but you and our lender made it all so smooth!"

Picking a lender is as easy- just call your local branch of First National Megabank and asking to speak to their mortgage department, and filling out some paperwork, right? Or going to a website, punching in some data, and letting someone in another state or worse, a computer decide if you're eligible for a mortgage. After all, a mortgage is a mortgage is a mortgage, right?

Yikes! Not in the least!

Picking your lender is just as important as picking the right real estate agent. Your lender is going to be working with you every step of the way, just like your agent. And it is just as important that your agent has a relationship with your lender. Never underestimate the importance of being able to pick the phone up and talk directly to them or stopping by their office if the need arises. Good luck getting someone on the phone from your instant mortgage approval website.

This is why I recommend certain lenders to my clients. I can trust their judgement, know that they are the experts in their field, and will provide to my clients the same level of service and integrity as I will. And they will fight hard for you as their client and make sure you are happy. And more importantly, they are local to this area. They work in the same time zone as we do. (Believe me, this is way more important than you can imagine.) They know this market and what works here.But what should you do before you make that contact?

GATHER TOGETHER YOUR DOCUMENTS!

You'll need to provide all sorts of paperwork to the lender for your mortgage once you have a home under contract, but it is always a good idea to have the following on hand before you start to make things run smoothly:

Tax paperwork (W-2's if you work for someone else, 1099's and P&L statements if you own your business)

At least two of your most recent Federal tax returns

Recent Paycheck stubs

List of your assets, including but not limited to bank statements, investment accounts, retirement funds, brokerage statements, real estate you own already

List of your debts, including credit cards, student loans, other mortgages, child support, car loans, with minimum monthly payments and balances

Cancelled checks for your current rent or mortgage

Gather all this together and put it in a safe place, because your lender will need them!

In my next post, I'll talk about the next few steps of the process.

Until next time,

Steve

In this series, I will explain some of the ins and outs of the home sale process. Whether you are a first-timer or on your fifth, this blog is for you!

Picking Your Agent

There are over 40,000 licensed Real Estate agents in the state of Maryland. Not all of them are active, and not all of them are full time, either. But I guarantee if you talk about buying or selling a house in public, you are likely to pique the interest of every real estate agent within earshot!

But how do you pick the right one? And what exactly does a real estate agent do? Let's look at the buying side first.

Your agent is your guide through the process of purchasing your dream home. Real Estate agents are a fiduciary, meaning they represent your interests above all others at all times. Your agent helps you find property that meets your criteria. They assemble a contract to purchase your new home and negotiate the terms on your behalf with the seller's agent. Once under contract, your agent monitors the entire process, and coordinates the transaction among all participants in the transaction- your lender, the seller's agent, your home inspector, title company, appraiser, and anyone else connected to the sale. I often say there are a lot of moving parts, and knowing how to manage those parts is the most important part of the job.

Sounds like a lot, right? It is! That is why it is so important you pick the right agent. You and your agent have to mesh with each other. This doesn't mean you always have to agree, but it is important that your personalities line up fairly well.

Do you have things in common like hobbies, pets, favorite sports? (GO O's!!)

Ask what they like to do outside of work.

Yes, we work weekends and evenings when you may be relaxing, but we know how to have fun, too. For instance, I like to travel to National Parks and I collect a patch from every one I've visited. I have dozens of park patches framed in my home office. I also enjoy kayaking and spend as much time as I can when the weather is nice paddling all over Maryland. I love going to concerts. I'm a big fan of food, in a previous life I was a chef. I'm also into craft beer, and am proud to say I've made the Maryland-Vermont road trip to get some of the best beers in the world!

There has to be a high level of trust.

The purchase of your home is the most expensive transaction of your life. If you can't trust your agent, you don't have the right one. Your agent should be the authority on the market. But more importantly- if they don't know the answer to your question, they must be honest and forthright that they don't, and do their best to find out for you. Your agent must keep you informed at all times, and seek the answers when they don't know them.

Your agent also has to stay up to date on the latest changes to the industry.

Rules and regulations do change and can have an impact on your transaction. The average purchase contract in Maryland is around 46 pages long. Knowing how to decipher these contracts and what the rule changes are and how they apply is vitally important. We are required to take continuing education classes to renew our licenses. But we also have the opportunity to take various professional development courses, some with certifications, to make sure we maintaining our edge. Your agent should constantly be engaged in their own professional education.

Your agent must keep your confidence.

The details of your transaction are confidential. I don't discuss them with anyone that isn't a party to the transaction and never without your expressed permission. There is no water cooler talk.

Your agent should have a good network of colleagues to refer to you to facilitate the various parts of the transaction.

Title, Lenders, Home Inspectors, Insurance Agents, Contractors- a good agent has a list of vendors they work with that share similar values. My vendors know what I expect from them, which is nothing less than what I expect from myself- excellence and integrity.

As a full time Realtor, this is not my evening/weekend job. At all times, morning to night, I am on duty and ready to assist and answer your questions and alleviate your concerns. This isn't something to be taken lightly- buying a house is a big deal! And I take your business and more importantly, your trust seriously.

Until next time,

Steve