I was sitting here drinking my coffee reflecting back on my journey to buy a home and also thinking about my sister-in-law who is in the same process. We've had drastically different experiences and it has ALL been due to who was (or wasn't) on our team during this process. I'd like to compare and contrast.
1. Real Estate Agent - I have been using the same real estate agent for the past 10 years. She has helped me buy a homes (a bank owned $18K fixer upper while I was in school), she's helped me sell a home (sold it for $90K 5 years later) and she's helped me rent homes. She works for a relatively "high end" agency and routinely sells $1.0M+ homes. In the total time I've known her, regardless of the price of the transaction, she has ALWAYS been one of the most attentive, smart, methodical people I've ever met. She takes care of EVERYTHING, she knows ALL the questions to ask and where to go if she's not satisfied, she ALWAYS does her homework, she knows how to "handle" (not in a bad way) her clients, she is ALWAYS interested in the BEST home for the BEST price and would routinely tell us more expensive homes were not worth it (even though her commission would be bigger), she knows ALL the FHA rules and knows ALL of the issues we'd have walking into every house. She is available ALL the time by phone, email, text. She will drive to your house on Sunday. Her motto is, "if the day ends in "Y" I'm working".
My sister-in-law used an acquaintance who is an agent. She was difficult to get ahold of by any means, she spoiled a few deals because she doesn't fully understand FHA rules, or didn't ask the right questions, etc. My sister-in-laws experience has been miserable.
2. Attorney - Probably the most important person on your team. I have a pit bull attorney who only does real estate law, she knows every person in town, and she leaves no stones unturned. The current house I'm buying had an exterior oil tank that was removed and remediated 8 years ago. The current owner couldn't find the paper work, his attorney (general counsel and not specifically a real estate attorney) faxed over a single DEP page and tried to pass that off as being sufficient documentation. My attorney rode the seller, his attorney and agent (who never disclosed this issue), contacted the DEP, fire marshal's office, the company who did the remediation and the lab they used and recreated all the appropriate documents. She knows the in and outs of what needs be done, she understands ALL aspects of real estate law, and if something doesn't look right will point blank tell you to move on. Again she is ALWAYS available and I probably speak to her daily at this point.
My sister-in-law on a friends recommendation is using an extremely expensive attorney who she has only had contact with through his assistant. He essentially discusses nothing with her, boiler-plate contracts and papers just appear in her mail and he's charging a fortune. He doesn't discuss FHA issues, he couldn't answer basic questions about FHA when she was looking at condos, and really she could've probably downloaded forms off the internet for much less.
3. Mortgage Broker - He was recommended to me by a friend. We started working on buying a house 18 months ago. We sat down, looked at all the numbers, looked at the big picture and formulated a plan that included paying off debt, bumping up my credit score, and saving money. He spoke with my financial planner to put this plan together. He checked in on a regular basis and when the time was right we started looking for a house. He is 100% rules and numbers drive. He knows the FHA rules inside and out, he knows what the potential issues are, he is proactive about addressing them. He takes a conservative approach. If the numbers say you can afford $350K don't look at anything over $325K. He looked at my entire financial picture and would make adjustments on what he thought we could afford not only based on FHA DTI rules but common sense budgeting. While not 100% true all the time he can for the most part "under write" the deal himself. Again he's ALWAYS available. Want to put a bid in on a house on Sunday and need a letter, just call him at home or on his cell phone and 10 mins later the letter is faxed.
My sister-in-law's broker told her it would be ok to borrow against her 401K and never factored that into her DTI. She was 2/3 the way through a deal and was declined by the mortgage company for that reason. He broker flat out said she didn't calculate the numbers correctly after suggesting that was ok. The deal fell through.
All-in-all I've had a couple "bumps" in the road purchasing a home but from my point of view it has been all smooth sailing. These people know what they're doing, they know how to do things the right way, and they are on my team. Many of the issues I read about on this board are because people don't have the right people on their team and that's why I wrote this post. This is a stressful, difficult process with lots of land mines along the way. Find good people, find people who know what they're doing, find people who put a 110% in for you! I think you'll be much happier!
