When you think of buying a house, it’s likely you’ve already thought about finding a Realtor. As the customer’s main point of contact and guide to finding his or her new home, there’s a lot that goes into choosing the best agent.
Brandy Harp, Realtor and principal broker at Jon Underhill Real Estate, starts her process by meeting with buyers and talking with them to find out what his or her needs and wants are, establishing a connection, and going over finances — three important responsibilities of every real estate agent.
“I help understand if they are securing a mortgage — which most first-time homebuyers would be, [because] it’s very rare that someone is paying cash for their first home — and what mortgage lender they’ve been working with. And that’s typically one of the next first steps is [asking if] they’re qualified for the mortgage,” Harp says.
This first connection with the Realtor helps them to get an idea of not only what you want in a home but also what you can afford.
“I don’t ever want to go and show homes that are more expensive,” Harp says. “If you go look at a house first and then you find out you can’t afford [it], that is deflating. You go from being excited about purchasing your first home to really disappointed.”
Ultimately, your real estate agent’s interest will likely be to make the process as stress-free as possible and serve as a guide to helping you make the best decision. The amount of involvement the agent has in the process and the volume of investment advice they are able to offer you, however, is often determined based on whether the agent operates as a discount broker or a full-service broker.
“With full-service, I coordinate and interact with every other party, so lenders, the title closing company, the home insurance … I’m helping to orchestrate and coordinate all aspects from the very beginning to well past the closing,” Harp says.
From Harp’s perspective, you should feel comfortable and never pressured by your agent to buy before you’re ready.
“You’re buying this house. I want you to feel ready and at peace to know this is the right house for you and your family, and until you know that, it’s not the right house. You have to make that decision. My job is to give you all the facts and information so you can make an educated decision for your family,” Harp says about a conversation she had with a client who was on the fence about one particular home. “If it doesn’t fit and it’s not right, listen to your instincts.”
For most first-time home buyers, the entire process of choosing your first, and possibly long-term, home can be intimidating. Perhaps that’s why the market is seeing one generation, in particular, waiting until they’re a bit more financially secure.
“Millennials didn’t buy their first home. They rented and then they ended up buying their next-step-up home and that’s interesting,” Harp says. “They’ve chosen [to wait] because of student loan debt or because they wanted to be in a better financial position or they wanted to get their solid job first and then buy a home, and what I’m finding is they’re not buying in the $150 to $300 [thousand] range. They’re actually stepping up and buying somewhere between $250 and $350 [thousand].”
Even if you aren’t a millennial trying to tackle student loan debt, getting whatever finances you do have in order before starting the process of buying a home is essential for making the process go smoothly — especially when it comes time to secure a loan.
Eric L. Cullum, mortgage lending manager and senior vice president at Arvest Bank, says that, in his 23 years in the business, he has seen the difference it makes when potential home buyers come in after having done some organizing first.
“A lot of times we’ll ask our people to, ‘Come in with your budget, come in with your financials, and you can get a free credit report or know your credit before you come in.’” Cullum says. “Getting all of their financial affairs, budget, W2s, tax returns, pay stubs ahead of time makes the process go so much smoother.”
Arvest offers debt counseling and budget counseling for those who need guidance on how to align themselves in a way that helps people get into the house they want.
“The more research they do on the front end, the more planning they do on the front end, the easier it is, the better it is and the more likely it is that they get into the specific product that they need and can afford,” Cullum says.
As the state’s No. 1 ADFA bond lender, Arvest works with first-time buyers often.
“We’ll educate them and tell them all their options and then we really focus on hand-holding all the way through,” Cullum says.
For some loans, such as those needed to buy land, build a home, renovate an existing house, or undergo any major construction, it’s important to find a lender that specializes in the particular type of loan that most mortgage brokers won’t be able to assist with.
“A lot of mortgage broker firms don’t offer construction lending; that’s where your banks come in,” Cullum says.
Lastly, whenever possible, choose a local lender.
“You want to see the person that you’re dealing with. I think that’s still a huge part of it no matter how much technology comes to play in it,” Cullum says. “They should shop and if they can get comfortable with a local lender, that’s step one.