Know Their Roles
The homeownership process requires that consumers work with lenders, real estate agents, and home inspectors. Click to learn more about the role of each professional and how they can help you become a successful homeowner.
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The Lender
The mortgage lender (also known as the mortgage loan originator) is the one who will work with you to complete your loan application and determine how much credit you qualify for.
Working with a lender before you start looking at houses can help you set realistic expectations – about the cost of a mortgage loan and about what you’ll be able to afford. You’ll also find that the effort you’ve put into developing a realistic spending plan and strengthening your credit will be a big help when you begin the loan application process.
*TIP: It’s important to shop around for a lender to make sure you’re getting the best deal and the best service, just as you would compare products and services when making any other major spending decision.
Finding a Lender
You can find lenders from many sources. If a friend or family member recently bought a home, ask that person about their experiences with their lender. You can also ask your real estate agent to recommend a lender. Internet mortgage loan and banking sites also offer information about lenders.
VHDA’s website offers a Find A Lender search tool at vhda.com/FindALender. It will make your search quick and easy by providing a list of VHDA-approved lenders in your area who can personally assist you with a VHDA mortgage. You’ll even be able to see which branches and individual loan officers in your area have been the most active in helping homebuyers obtain VHDA loans over the past year.
What Questions Should You Ask?
You’ll want a lender you can trust and loan terms you’ll feel comfortable with. That means you’ll need to interview the lenders to compare loans, interest rates, and terms. Here are a few things you’ll want to ask:
What types of loans do you offer? Fixed rate and adjustable rate (ARM)? Other types?
What payment schedules are available? (For example, 15-year loans or biweekly payments?)
What is your current interest rate for a 30-year, fixed-rate loan?
What application fees do you charge?
Does the loan require mortgage insurance Premium or Private Mortgage Insurance
Can you lock in the rate? If so, when is the rate locked in – at application or at approval?
Source: Virginia Housing Development Authority, Homebuyer Handbook
Real Estate Agent
Choosing the right real estate agent is a crucial part of your journey to homeownership. Your agent can help you find the home you’ve been dreaming about – and serve as a knowledgeable partner, capable of walking you through the entire homebuying process.
Why Use a Real Estate Agent?
You may decide you want to use the services of a real estate agent to help you locate potential properties. Using a real estate agent has several advantages over just looking on your own. A real estate agent can:
- Help you determine exactly what you’re looking for.
- Arrange appointments for you to visit homes, and tour them with you.
- Assist you in evaluating the quality of the home compared to the price.
- Make it easier to negotiate and close the deal.
Choosing a Real Estate Agent
There are many ways to find an agent. Word of mouth, including referrals from people you know, can be one of the best ways to find a real estate agent.
Another good source for agent information is the internet. VHDA’s website lists real estate agents who are members of our Real Estate Agent Connection. These agents have been through the VHDA training program and are experts in addressing the needs of first-time homebuyers. To find a member-agent near you, visit VHDA.com/FindARealEstateAgent.
To be sure you’ve found an agent that will work well with you – and before you sign an exclusive contract – you might want to ask yourself these questions:
- Is the agent easily accessible, and do they return your calls?
- When the agent takes you to look at houses, do they seem to match what you’re looking for?
- Does the agent explain things in a way you can understand, including different financing options?
What is the Role of the Real Estate Agent?
If you’ve decided to work with an agent in your homebuying process, it’s important to be aware of the different roles agents play in the process.
- The first thing you need to know is that all agents work for a broker. A broker owns the real estate agency and is ultimately responsible for all transactions. There are also several different types of real estate agents.
- A seller’s agent or listing agent represents the seller, assists with setting sales price, markets the property for sale and helps with negotiations.
- A buyer’s agent represents the buyer, locates potential properties, assists with negotiations and protects the buyer’s interests.
- A dual agent represents both buyer and seller in the same transaction.
- A designated representation is a situation in which the buyer and seller are using the same broker, but are represented by different agents in the same firm.
Source: Virginia Housing Development Authority, Homebuyer Handbook
Home Inspector
A home inspector is a professional who is trained to visually examine the condition of residential properties to determine if discoverable major mechanical deficiencies exist. The fee for this service is typically paid at the time of inspection, and is usually about $350. However, some inspectors may charge based on square footage, number of stories in the house, age of the house or other factors.
How to Choose a Home Inspector
When choosing a home inspector, you’ll want to carefully consider their qualifications. Currently, Virginia does not require licensure, but instead offers a voluntary certification. Inspectors who identify themselves as a “Certified Home Inspector” must complete the state certification program through the Department of Professional and Occupational Regulation (DPOR).
You might also want to look for an inspector who is a member of a national organization such as the American Society of Home Inspectors (ASHI) or the National Association of Home Inspectors (NAHI). Members of these organizations must perform their inspections to a certain standard, follow a code of ethics, meet experience requirements and, in some cases, pass an examination and provide evidence of annual continued education.
To locate a home inspection professional in your area who belongs to one of these organizations, visit:
American Society of Home Inspectors (ASHI) www.ashi.com
National Association of Home Inspectors (NAHI) www.nahi.org
Why is a Home Inspection so Important?
While a home inspection is not a requirement for most mortgage loans, it is an important pre-purchase investment every potential homebuyer should make.
A home inspection in an affordable way to:
Avoid expensive repairs.
Become familiar with a home’s major systems. Improve your negotiation options (get an adjustment in price, or have the seller pay for repairs).
Spending a few hundred dollars now may save you thousands in unforeseen repairs after you’ve bought the home and moved in. If significant repairs are needed, the inspection report may enable you to withdraw your offer. If there are no problems, the inspection will give you additional peace of mind in your decision to buy the home.
Source: Virginia Housing Development Authority, Homebuyer Handbook
