Depending upon who’s being asked, there’s a lot of ways to answer the question, “Which should I talk to first, a realtor or a lender?” The real answer is either can come first. A realtor is going to suggest getting a pre-approval letter from a lender so they know how much house can be afforded. A lender is going to provide a pre-approval, but cannot recommend houses or set up showings.
To get the process started, talk to someone familiar. If a friend, relative or coworker recently moved, ask about their experience. Find out who they used to get their mortgage and as a realtor. If the last move took place in the past few years, reach back out to the previous lender. This person likely still has all the paperwork on file and just needs to get it updated verses starting from scratch.
What to look for in a Realtor
There’s a lot of realtors out there. As the search for a realtor begins, take into consideration these tips.
- Identify what type of realtor you want or don’t want. What traits should this person have: an aggressive or patient personality, someone that is in constant contact or only reaches out when there’s news, a full-time or part-time agent? The realtor should work for the buyer, but in order for that relationship to work, both parties should know how to communicate with one another.
- Get referrals from friends, family and colleagues. Referrals are huge for realtors. If someone had a good or bad experience with a realtor they will let you know. Find out if the paperwork was done properly, the closing was on time and how smooth the processes was for them.
- Read Google, Facebook and other online reviews. Visit the realtor’s website too.
- Some realtors have partnerships with organizations that offer discounted rates for certain professions. Military, education, healthcare workers and other occupations should research if they’re eligible for these programs.
- Narrow the search down to a few agents and have a conversation. Find out how they operate and their process.
What to look for in a Lender
Several companies offer mortgages and it can be difficult to find one that will offer the best rate. Here’s a few tips on finding a lender to help obtain the pre-approval letter that’s needed before placing an offer on a property.
- Banks, credit unions and mortgage brokers are the top players when it comes to finding a good rate on a mortgage. Talk to friends, family and co-workers about who they used in any recent real estate transactions.
- Talk to a few lenders and compare their rates. While some may only differ by a fraction of a percent, those savings can add up over 30 years.
- Ask what the lender fee is. Each company will have a different fee, which results in a higher amount due at closing. Find out what the fees are and what they’re used toward.
- Find out if any fees can be waived due to a certain percentage of a down payment, military service or other extras.
- Check the credit score. Every lender will pull a credit report, and to get the best rate, it’s important that the score be in good shape. If the credit score needs help, now is the time to begin paying off debts and paying bills on time. This will help the score increase and possibly result in a lower mortgage rate. Here’s a few tips to improve your credit rating.
The realtor and lender are the two people a buyer will work with the most when entering into the home-buying process. For this reason, it’s important that the relationship be built on trust and transparency, understanding the fees, how to communicate and what’s needed to keep the process moving. It’s fun to look at houses and dream about which one is the right fit, but don’t forget about the importance of these roles to make the dream a reality.