Do you know someone who had a horrible experience buying his or her first home? Want to know why? They probably did not have a team. Building a team of professionals and knowing who to talk to is the key to a successful home purchase.
Who is the first person you should go see? I have seen people run to a Real-Estate Broker, Mortgage Broker, a bank and even, to their parents. Ever wonder how many professionals it takes to purchase a home?
Here is a list of Professionals, in order of appearance, you need to surround yourself with to make sure you get the help you deserve. This will ensure you have everyone working for you and are on the same page. The professionals will work with each other to achieve your goals. You may ask yourself why you need all these people, when your brother-in-law did his home shopping online and your father-in-law told you he can do your building inspection for free and better than any other person. My dad told me the same thing. I told him I agree, come with the home inspector if you like.
1. Financial Advisor. I use this term broadly as it the common title used by most people. This person’s role is to oversee the entire transaction. They should be the maestro of this symphony. They have general knowledge in every facet of the home purchase process and work very well with other professionals. Furthermore, this person can help you explore affordability versus paying capacity (not sure of the difference? Click here to read my explanation of it).
2. Mortgage Broker. If you trust your bank and have someone you know there, I guess you can continue using your bank. I prefer dealing with a broker because they have an overview of the various lenders and programs your bank may or may not have access to. The rate has a very small impact on your payments. However a different penalty calculation can cost you thousands if you get into a jam. It is not what you save today, but how much you don’t pay tomorrow!
3. Real-Estate Broker. Yes, you can look online and see the pictures of the houses you like. Can you tell which houses have professional pictures? A house is much more than the décor and the color of the kitchen cabinets. A Real-Estate broker can really add value here, especially in the negotiation of the price. They can set your expectations and orient you towards a more realistic neighbourhood. In addition, you do not directly pay for their services so that is always a bonus nice.
4. Building Inspector. They are not miracle workers and cannot guarantee your house is perfect. However, it proves you are a savvy consumer if you need to go to court due to a hidden defect. Yes, it does happen. The inspector’s report will go a long way to prove your case; a lot further than your father-in-law’s opinion.
5. Damage insurance agent. Prior to your visit to the notary, you need to get your house insured. You will be obliged by your mortgage provider to have at least fire insurance. Talk to your broker to get the best advice, and balance it out with price. Remember, the only way you can save big is to cut on coverage, so check everything you are covered for. . Each company will prefer a certain type of client, home, and price point. Use your broker’s expertise to find the best compromise. In my opinion, avoid phone communications or transactions, as the employee’s loyalty is to the company. A broker that works with one company exclusively is a better alternative as they are trying to build a clientele and will work hard to keep you happy.
6. Notary. Do not get the cheapest price or the highest price. Choose the person you are comfortable with and preferably someone recommended by your professionals or family. Book your appointment for your will right away! Life comes at us fast, book for 3 to 6 months after your purchase.
7. Life insurance broker. To avoid financial ruin or to avoid your spouse and children scrambling to figure out how to live with much less income, get life insurance. According to a recent LIMRA study, people mistakenly believe life insurance costs 2 to 3 times more than it does. One less coffee at your favorite coffee shop a week is all it takes for most people to afford their insurance. This will provide piece of mind. I will avoid going into the different types of life insurance. If your financial advisor can recommend a solution or someone, I think that is the best person to start talking to. Mortgage life insurance is not the ideal solution. Check out this video done by CBC Market Place to see why.
8. If surprises come out after you have purchased a home, such as a leaky foundation, you need a lot of help! Call a REAL-ESTATE LAWYER, not a corporate or family lawyer. Someone who has experience with this type of situation. Your network can help, however the best people to solicit are your real-estate broker and/or notary as they have the best experience with this type of situation. Call your home and car broker as well as they can help you along with the claim process.
To ensure you have the best possible experience, building a team of professionals is easier and more beneficial than doing it on your own. When professionals surround you and work for you, amazing things happen. I have seen it many times. Using this approach can ensure you are not making a mistake, buying a home beyond your means, or getting trapped into a situation you may regret. By getting everyone working for you, purchasing your first home becomes a special and positive experience while avoiding buyer’s remorse or financial restriction! You deserve it!