How To Find The Best Real Estate Agent, Loan Officer And Mortgage BrokerReal Estate - Who Can Help
Real estate markets in most countries are not as organized or efficient as other markets with liquid investment instruments. Real estate properties tend to be unique and directly interchangeable among themselves. This presents a significant challenge for an investor seeking investment opportunities in this asset class.
For this reason, locating properties which to buy or sell, including the resources to finance it, can involve substantial effort. One way to wriggle around this is to seek the services of a mortgage broker, real estate agent or loan coordinator. These agents have their ear to the ground as such could be a reliable source of the best real estate deals.
However, though there are numerous mortgage brokers and real estate agents, finding a reliable one that understands our needs tends to be few and far between. This has bungled the hopes of many investors hoping to take a bite of real estate investments.
We have decided to compile a list of tips that can help you find the best real estate agent, mortgage broker or loan officer. Though the steps required are primarily the same, each category presents its unique search parameters. Enjoy!
Real Estate Agent
Real estate agents are licensed professionals that arrange transactions between real estate buyers and sellers together and act as their representatives during the course of negotiations. Real estate agents are compensated through commissions on the property’s purchase price; as such, their income is tied to their ability to get a deal closed.
How to find the best real estate agent
Any venture into unknown territory begins with research. There are various ways to search for a real estate agent You can go online and search directories. Browse through websites and social media accounts of realtors that pop up in your search radar. Be sure to read online reviews as this would give you an indication of how efficient the real estate agent is. Alternatively, you can check with your state’s real estate regulator for background information.
Referrals are a tried and tested method of getting good real estate agents. This is because you have the opportunity to evaluate their efficiency first hand. Also, because looking for a suitable property requires a bit of knack, you would want someone who has experience working with clients who have similar needs such as yours. You can ask friends, family or colleagues for recommendations for a real estate agent with whom they’ve had a good experience. Ideally, it would be best if you searched for a real estate agent that’s a member of the National Association of Realtors (NAR) and or certified realtors.
- Set up an Interview
An interview allows you to evaluate the agent close up. Apart from his experience, you would also be looking at his mannerism and character. Interviews give you a chance to know if what the agent is offering aligns with your needs. It also helps you trash out the mode of communication and commissions. During the interview process, you can ask prospective agents to provide information on homes they’ve listed and sold in the past year. You can do a follow-up by calling those clients and asking for their opinions on the agent and find out if they would hire him again given similar circumstances.
- Pay attention to commissions.
Before closing the deal or signing the dotted lines, it is imperative that you get an idea of how much commission your agent is making off the deal—ideally, a 6% commission of the sales price of the home.
Loan officers are mainly concerned with the financial side of obtaining a mortgage. They are different from real estate agents who are primarily involved with connecting buyers and sellers. Though some real estate agents also follow up mortgage financing options, knowing which loan best suits your financial situation is within the prerogative of the loan officer. A loan officer—or mortgage broker—can help you make sound financial decisions. One advantage of working with a loan officer is that it removes the presence of a middle man, making it possible to speed up the process of a loan application.
How to find the best loan officer
- Know your lending options
Knowing what options are available for lending automatically crosses-out what type of lenders are unsuitable for you. Know that there are different types of mortgage lenders available each with their unique advantages and disadvantages. Credit unions, mortgage bankers, correspondent lenders and Savings and Loans (S&L) are some of the available mortgage lenders. One significant parameter which is used to find the most suitable loan officer is the interest rate. Locking in a low-interest rate is critical, but be careful that there are no hidden charges which could affect your purse.
- Work on your credit rating
A loan officer provides finance for the purchase of a home. This is highly predicated on your credit score. Typically, a loan officer would evaluate your financial circumstance and ability to repay to determine if you are eligible for the loan. A low credit rating implies that you are a risky candidate which attracts a higher interest rate. The higher your credit rating implies that you are a low-risk candidate who has the ability to pay. This does not only attract a lower interest rate but also increases your negotiating power and expands the scope of your search for a good loan officer.
This stage occurs after you must have researched and asked for referrals (as outlined in the real estate agent section). You then compare and contrast the best lending rates available. This information can also be used as leverage when negotiating with lenders.
Follow the process outlined in the real estate agent section.
Mortgage brokers work as intermediaries between lenders and borrowers. Because they are not tied to a single lender, mortgage brokers can shop around for the best rates and mortgages, though they may favour one lender over another because of the commissions they receive. However, a good broker should look out for his client’s interests above anything else.
How to find the best mortgage broker
The steps to finding a good mortgage broker have been outlined in the previous section. This includes asking for referrals, researching, conducting interviews and background checks comparing rates with different brokers. You could also expand the radius of your search to include brokers not listed in your area.
After All is Said and Done
After following the steps outlined for the appropriate category, the only thing you can do is to trust your gut and take the bold step forward, taking a mortgage is probably one of the most financial decisions we make in our lives. As such, due diligence is advised before you take the plunge. There are a plethora of sources and options available to finding, financing and owning your own home.