Homebuyers, especially first-time homebuyers, may be taken aback when they see the long list of real estate and finance professionals who take part in the buying process. They often have questions:

  • Who are these people?
  • What does each one do?
  • Which ones will you meet?
  • When do they get involved?
  • Which ones can you choose?

Here are some answers. And there’s a bonus answer to a question almost no one asks (although everyone should): Is there a benefit to engaging any of these professionals earlier in the process?

(Spoiler alert: Yes.)

Who Does What and When

Assuming a transaction in which the buyer(s) obtains a mortgage from a conventional lender (not VA or FHA), these are the professionals who help make the sale happen.

Real Estate Agent/Broker. Typically, the agent or broker is the first professional most buyers will retain. The agent/broker works with the buyer throughout the process up to (and including) closing. A good agent/broker will advise and guide the buyer, provide lists of vetted professionals (such as home inspectors), offer research and due diligence on homes, schools, and neighborhoods, and serve as a general resource.

Loan Originator/Bank. The loan originator works for the lender—usually a bank—and helps the buyer get the right mortgage for the property. This individual may have a different title, such as a loan officer, mortgage broker, or something similar. This professional ensures that a buyer qualifies for the loan and loan amount and can advise on what type and duration of loan a buyer should consider. A buyer should identify a lender before looking at homes, learn how much mortgage they qualify for and can afford, and get prequalified to streamline the process. A real estate agent/broker may be able to help identify potential lenders.

Real Estate Attorney. The real estate attorney has two critical functions. First, they assist in negotiating the contract of sale (aka the purchase agreement). Second, they ensure the property passes legally from seller to buyer. This task generally involves preparing all documents before closing and managing the closing itself, as well as disbursing funds after closing. In many cases, buyers or sellers may select the attorney.

Real Estate Appraiser. The appraiser may work for the lender or be hired by the lender. Their job is to determine the value of the property, so the lender can decide whether it makes financial sense to approve a loan. The appraiser will typically look at recent sales of comparable properties in the area and evaluate the property itself for condition and improvements. The lender will specify the appraiser; buyers who disagree with the appraiser’s valuation can hire their own appraiser and attempt to negotiate with the lender if that independent appraiser gives a different value for the property.

Surveyor. The surveyor precisely determines the size and shape of the property and often places stakes at the corners of the property lines to show the land associated with the property. The surveyor will also check public records to ensure there are no discrepancies between their survey and public records. Typically, the buyer pays for the survey and can choose the surveyor.

Home Inspector. Home inspections are optional, but highly recommended for buyers. A good home inspector can uncover potential or existing issues that buyers may not notice. Generally, contracts are contingent on the inspector’s findings; buyers may request repairs or discounts or even back out of the sale if the home inspector uncovers serious issues. The buyer pays for the home inspection and chooses the inspector. In highly competitive markets, some real estate agents/brokers may suggest foregoing an inspection, but this is very risky. A home warranty, sometimes offered by the seller as an incentive, can mitigate risk, but an inspection is still highly recommended, even on new construction.

The Role of Title Insurance

Although title insurance isn’t a person, it plays an equally important role in the process and shouldn’t be overlooked.

As with virtually all types of insurance, title insurance protects you (and the lender, if there’s a mortgage) if a third-party claim that didn’t show up in the initial title search comes along later. That could be a contractor the former owner used who didn’t get paid, a decade-old divorce decree that includes ownership of the property, an easement that limits what you can do with the property, or some other lien or incumbrance on the property.

The seller/current owner may not even know about it. The problem is that there are often delays at the municipality that can result in undisclosed liens or judgments. Because of this, buyers should hire a title company that is skilled in uncovering these issues and involve the title company early in the process. (More on that below.)

Unlike many other types of insurance, title insurance is a one-time fee paid at closing. In most states, including New York, rates are set by the government and will be very similar among all insurers in the area. Rates will be a set percentage of the loan amount (for the lender’s policy) or a set percentage of the purchase price (for the buyer). The buyer pays for the lender’s insurance policy and for their own (owner’s) policy.

If you have a mortgage, the lender will require a title insurance policy. However, that policy will only protect the lender. It is highly recommended that buyers purchase their own title insurance policy.

The buyer chooses the title company. Real estate agents/brokers and lenders may offer suggestions, but buyers are free to select any title company they wish.

Why Cornerstone Should Be Involved Earlier, Not Later

Besides managing the closing and post-closing process and providing title insurance, Cornerstone can add value for homebuyers early in the process.

First, with experience gained from more than 16,000 transactions, we can recommend vetted professionals for every type of real estate service. We have NO business relationship with the professionals we recommend and earn NO commissions or fees, but we know who shares our values of efficient, ethical, responsive, and proactive service.

Second, we can uncover potential issues early that can affect a sale or provide critical information when negotiating prices. For commercial sales, we’ve uncovered obscure covenants and restrictions that can affect the buyer’s plans for the property. On the residential side, we’ve found issues such as open permits or illegal structures, such as decks or dormers, that need to be resolved before a sale can conclude.

There’s a reason why Cornerstone has a five-star rating from Google reviews. And because title insurance rates are set by the government, when you use Cornerstone, you don’t pay more. But you certainly get more. The earlier you include us in the buying process, the more we can help. If the American Dream of homeownership is important to you, please let us help you make your dream a reality.