Never Trust Your Real Estate Agent When it Comes to These 2 Things
When you’re buying a home, especially if you’re buying your first house, you’ll be placing a lot of trust in your real estate agent. Your agent is responsible for understanding your needs, helping you find a home and meeting, or sometimes tempering your expectations. They’re you’re guide, your guru and the expert you need to trust.
Your agent is going to offer you a lot of advice. They have experience not only in home buying but in your particular market. Hopefully you like your real estate agent. At the very least you have to trust them. But there are a couple of recommendations your agent is likely to give you that you should never follow. Those two recommendations are a preferred home inspector and preferred mortgage lender.
As much as you probably trust your agent, when it comes to mortgage lenders and home inspections your interests fall out of alignment. Here is a breakdown of why you should find each of these on your own and how you can do it.
Find Your Own Home Inspector
A home inspection isn’t just a hurdle to overcome when buying a home but a valuable tool to make sure you’re getting the home that you’re paying for. A home purchase should always be contingent on a home inspection. A home inspection is a detailed account of everything that is wrong with the home that you’re about to purchase.
A proper home inspection should take hours, usually between two to four, if not more. In addition to the home’s living spaces, an inspector will check the roof, the attic, the basement, and the crawlspace. They’ll look for water damage, mildew and rot. They should inspect every inch of your home from top to bottom looking for anything that could possibly be wrong with it.
Your real estate agent will likely have a recommendation or a go-to home inspector that they like to use. Don’t use them. This is not to say that your agent is doing anything nefarious or underhanded, just that, in this instance, your interests are out of alignment. If the home inspection goes well, you will likely purchase the home.
If your home inspection does not go well, you will likely have to renegotiate with the seller and may even walk away from the deal. This is not your real estate agent’s desired outcome. A quick and breezy home inspection is in your agent’s best interest. The less the inspector looks for, the less they will find — and that means less of a chance of something tanking the deal.
When you’re buying a home, it’s prudent to find your own home inspector. Look for well-reviewed professionals online, ask friends and family, or ask a different agent. When you’re buying a home everyone should have your best interest in mind. Your real estate agent almost certainly does, but remove any chance of bias by finding your own home inspector: one that’s looking out for you.
Find Your Own Mortgage Lender
Real estate agents are there to help you find a home. They have a vested interest in seeing the keys handed to you. While there are laws governing kickbacks and quid pro quo, an agent’s objective, at the end of the day, is to make sure you buy a house. The second recommendation you should never take from your agent is their preferred mortgage lender.
Mortgage lenders and real estate agents have a symbiotic relationship. Once cannot live without the other. Lenders and agents also likely run in the same circles, know each other’s reputations and may even have a friendly relationship.
It is illegal for a real estate agent to receive any monetary compensation for recommending a mortgage lender. A lender can not even so much as pick up the tab for lunch in the eyes of the law. That doesn’t mean that it doesn’t happen, just that it’s illegal.
It’s highly unlikely that an agents recommended lender is funneling fist fulls of cash for referals. But be aware that they do have a relationship. Maybe they’re best friends or even golfing buddies. Maybe they’re making the recommendation because they’re trying to throw an old college buddy some business.
The truth is that you just don’t know. Your agent is likely making the recommendation because they believe the person to be competent at their job and will make sure they mortgage process is as seamless and easy as possible. That also could mean they don’t care if you get the best rates, just that the mortgage goes through.
There are so many outlets for finding a good, low interest mortgage online that going through a local agent seems almost quaint and dated. It’s likely more expensive and time consuming as well.
At the very least you need to do your homework. If you do your research when looking for a home inspector and a mortgage lender, and it leads you back to your agents recommendations, great!