Good Agents Know Good Lenders
First, consider what’s most expeditious. Your agent can help you find a mortgage lender much more quickly and easily than a lender can help you find a good agent. Most agents have a plethora of lenders in their referral database, and a group of lenders that they’ve personally worked with in the past. Agents can be trusted to refer a mortgage lender with a proven record and one that can close loans, while mortgage brokers might only refer agents who send them business, which means nothing. It’s not necessarily a declaration of professionalism or experience. Those agents could be—and often are—brand new and still learning the ropes. The Real Estate Settlement Procedures Act (RESPA) prohibits agents from receiving a “thing of value” from a lender in exchange for sending you its way, and it inhibits them from entering into quid pro quo arrangements that might not be best for their clients. The agent will know which lenders perform and which can be counted on to hold up closing. You probably won’t be privy to that type of information on your own.
An Agent Will Help You Pick a Lender
Your agent can also help match the loan you want to a lender that specializes in that particular type of financing. Another advantage to choosing an agent before a lender is that your agent will probably refer you to a local lender. Buyers sometimes want to work with lenders in another city, or even in another state, but you could be at a disadvantage during offer negotiations if your lender isn’t local. You don’t want to lose your dream home just because the listing agent has never heard of your lender.
Shop Around for an Agent
Don’t be afraid to tell a potential agent that you’re meeting with their competitors. They might wonder what else you’re keeping from them if you don’t share your intentions, and they will find out later, so you might as well just tell them. It’s OK. Zillow recommends meeting with at least three agents before you lock in with anyone. However, most buyers don’t do that. The National Association of Realtors has reported that 52% of first-time buyers took a recommendation from a friend and jumped right in, and two-thirds signed up with the first agent they spoke to, without looking any further.
Find Someone You’re Comfortable With
Real estate agents are generally pretty busy, at least if they’re making money, and that is the kind of agent you want to work with. Those who are busy generally have a good deal of experience, and their experience will help you to avoid problems. Liking the individual counts a great deal, too. Call an agent, and ask for a 30-minute meeting at their office. You can interview over the phone, but in-person is better. Be upfront, and explain that you’re planning on talking to two or three agents before hiring someone. The agent will understand.
An Agent Can Help With the Best Time to Buy
A good agent can also help you figure out whether the time is right for you to buy. You can toss about scenarios about moving to various communities and discuss the pros and cons. You can bounce ideas off your agent. They’ll be your rock, your sounding board, and, hopefully, a person you can trust.
The Flip Side: Preapproval
Nothing says that you can’t find an agent, then take a deep breath and get preapproved for a mortgage before you start looking for a home. In fact, the agent you select might even urge you to do just that. The 2017 Zillow Group Consumer Housing Trends Report indicated that 92% of all buyers that year were preapproved and that 83% of those who worked with agents were preapproved. The takeaway is that agents prefer that their clients get preapproved, according to Zillow.
