This holiday shopping season, I challenge you to think about real estate while deciding where you are going to do your shopping.  What type of real estate experience do you want when buying or selling a house – the Walmart kind or the Nordstrom kind?

You’ve been to both Nordstrom and Walmart (or, you’ve at least heard about them).  There is a difference, right?  It’s not only the products you buy and the prices you pay but you FEEL different shopping at Nordstrom than you do at Walmart.

At Walmart, you pay lower prices and buy lower quality items in exchange for little or no personal service, an annoying smiley face on every rack (look into the face - it lulls you into a mindless oblivion so you shut out the screaming children)and the feeling that you are cattle, rushed through small aisles to a quick checkout where a girl with nails too long to type on the register doesn’t even acknowledge you exist.  It’s not pleasant, especially at this time of year. 

See Black Friday footage from Walmart.

At Nordstrom, you pay more for higher quality items in exchange for superb customer service and an elegant shopping environment leaves you feeling that you are special – the guy in a tux playing the piano, helpful salespeople, a covered parking garage (at least in West Hartford).  Shopping at Nordstrom is a pleasurable, unhurried experience.

Allow me to share this personal experience at Nordstrom…

Two years ago, I dragged my husband to Nordstrom to buy him clothes for a new job.  Not in touch with his metrosexual side, he doesn’t enjoy shopping.  I trusted the salespeople at Nordstrom to treat him well.

The salesman did not disappoint, spending over an hour with my husband, matching shirts to suits and ties.  At the counter, the salesman wrung up our purchases and announced the final bill.  My husband’s face turned red and he started to sweat – no kidding.  I pushed him away from the counter and told him to go look around.  The bill was over $1,000, even though everything we purchased was on sale.

I kept telling my husband that the purchase was worth it.  He was doubtful, probably imagining all the power tools he could have purchased instead.

Six months later, the pants to one of the suits began to tear in the back pocket.  I went with my husband back to Nordstrom.  The salesman offered us two options: do you want another pair of pants or do you want us to repair these?  We decided to go with another pair of pants. 

I thought he was going to order another pair of pants to go with the jacket.  Nope –  the salesman walked us over to the rack and picked out several suits in a similar color.  None of those suits were on sale, though.  They were at least 3x the price we paid originally. 

Sensing my panic, the salesman told me, “we’ll do an exchange.”  He didn’t run over to his manager to ask if he could give us the suit; he just handed us a ticket to pick up the suit after tailoring and wished us a good day.

Wow.  Even my cynical husband is impressed, to this very day.

Now back to real estate…

You have a choice in retail - pay less and get less or pay more and get more.  There are some options in between but let’s not muddy the waters. 

In real estate, you also have options.  You have the Nordstrom experience – full service representation.  And then, you have the Walmart experience – discount service or unrepresented.  Which do you want?  Over the next few weeks, I’ll explore the differences so you can choose for yourself. 

I write for First-time Homebuyer Magazine on a regular basis.  Here is my most recent article, available in the September/October edition.   

From having your credit put under a microscope by a mortgage lender to spending all your free time looking at houses, buying a home can be a stressful experience. Much of the stress is avoidable with advanced preparation and hiring the right real estate professionals. Here are some things you can do to make your home purchase go more smoothly:

1. Get Your Financial House in Order

Before you go to a lender to apply for a mortgage, get a free copy of your credit report. By getting a copy of your report before meeting with a lender, you will have time to correct mistakes or begin to change your behavior so that your lender will look at you more favorably. You can improve your credit by:

· Making the minimum payments on time

· Paying off any accounts with small balances

· Paying down accounts with higher balancesResisting urge to open new accounts

· Waiting – if you can change your credit habits, it will take some time for your credit report to reflect those changes. Lenders will look for you to have those habits for a period of time. If your credit appears to be in good shape, then you’re ready to talk with a lender.

2. Obtain Mortgage Pre-approval

Most sellers will not accept any offer from you without a pre-approval letter from a lender so don’t waste time looking at homes until you have pre-approval. Your lender will tell you how much home you can afford, what the monthly payment will likely be and what your anticipated closing costs will be. It’s smart to speak with a few lenders before deciding to go with one in particular so you can compare rates and closing costs.

3. Create a Budget

Once your lender has told you how much you can afford, you need decide if you really want to spend that much, anticipating additional expenses like rising real estate taxes, repairs, buying furniture, and general maintenance. Your budget will help you avoid overspending and the stress that comes with it. 4. Do Your HomeworkAccording to a study done by the Consumer Federation of America, only 36% of the general public feel they know “a lot” or “a fair amount” about “real estate agents and brokers and their consumer services.” With 68% of the households in the United States owning homes, the study shows that even people who own homes don’t know enough about buying them.Set yourself apart by doing your homework before you buy. Some places you can learn:

Robert Bruss had a great article out earlier this year about the key questions you should ask before buying a condominium called “Make Your Condo Purchase a Smart One”.  Below are excerpts from his article along with my comments. 

1.  WHAT IS THE FINANCIAL CONDITION OF THE CONDO ASSOCIATION? If you are considering purchase of a brand-new condo, to attract buyers the developer has probably set the monthly condo fees very low. Watch out for inadequate allocations for replacement reserves which are sure to increase in future years as the building ages and needs repairs.If you are considering buying an older condo, study the replacement reserves. Depending on the building’s age and anticipated replacements, such as a new roof every 15 to 20 years, if reserves are inadequate a large special assessment might be levied on each owner when an unexpected cost arises.

For example, I own a condo where each owner incurred a $2,000 special assessment to replace the leaking windows.There is no minimum replacement reserve guideline, but two standards are (a) at least $2,000 to $3,000 per unit, and/or (b) 25 percent of the annual gross income for the homeowner’s association should be in the reserve account.Smart condo buyers ask if there are any major replacements anticipated in the next 12 months and if there will be a special assessment. Review the board of director’s meeting minutes for the last six months to determine what issues are being discussed.

In Connecticut, condo buyers have the right to review the condo association’s rules and regulations, financial statements and by-laws within 72 hours of an accepted purchase contract.  Generally, an attorney will review these for a buyer but it is important for the buyer to also review. 

2. HOW DO THE MONTHLY FEES COMPARE WITH COMPARABLE NEARBY CONDO COMPLEXES?The answer is important not only to your wallet, but to the resaleability of the condo. When the condo fees are very high compared to the competition, that holds down the market value of condos in that complex. Be sure to inquire what services are included, such as central heat and air conditioning.

I’ve seen condo fees as low as $120/month to as high as $550/month, depending on what is included. 

3. IS THE CONDO ASSOCIATION PROFESSIONALLY MANAGED? Unless it is a small condo building of five units or less, professional management is a good sign. The cost usually pays for itself because an experienced condo manager knows where to get repair discounts that often “save” the equivalent of the professional manager’s fee.A related question to ask is how long the professional manager has been managing the complex. The right answer is: the longer, the better. That indicates the condo owners are satisfied.For example, in the condo complex where I own a unit, the management company has been there over 30 years and the current manager has been with us over 20 years (after his father retired). Needless to say, we are very pleased with the service quality.

The listing agent or homeowner can tell you who manages the property.  To find out how good they are, talk to homeowners. 

4. HOW GOOD IS THE SOUNDPROOFING? Because poor soundproofing is the number one complaint of condo owners (especially for buildings converted from apartments), when you focus on buying a specific unit, it pays to test the soundproofing.This can easily be done by asking the upstairs, downstairs, and adjacent neighbors to turn on their TVs and stereos to normal levels and see if you can hear them in the unit. Also, check for upstairs noisy floors, especially in wood construction buildings if the upstairs neighbors don’t have carpets with heavy padding. 

There have been many condo conversions in Connecticut, including some really interesting factory or mill buildings.  Noise and energy efficiency seem to be the biggest problems with these conversions.  Other conversions go from rentals to condos and the biggest issues I have with these is the quality of construction. 

5. WHAT IS THE PERCENTAGE OF RENTERS? Mortgage lenders know the risk of foreclosure default in condo complexes with more than 20 percent to 30 percent renters is very high. Many lenders either refuse to finance units in such complexes, or they charge above-normal interest rates.The reasons are absentee landlords often have little interest in properly maintaining the condo complex and their renters aren’t as considerate as owner-occupants. The result can be declining maintenance quality.Condo complexes with anti-renter rules are considered very desirable for owner-occupants and often bring premium resale prices. 

To find out the percentage of owner occupied units, have your agent contact the property manager. 

6. ASK CURRENT RESIDENTS, “WHAT DO YOU LIKE BEST AND LEAST LIVING HERE?” Or you might prefer to ask, “Would you buy a condo here again?”Most condo owner-occupants are friendly and willing to share their good and bad experiences. Be sure to talk with several residents just to be sure you aren’t talking with a “bad apple,” professional complainer. Just to verify your soundproofing test of the unit you are considering for purchase, casually ask, “How is the soundproofing here?”

If I can, I try to talk to a member of the board for my clients.  Board members are a great source of information about the associations, the property managers and the overall atmosphere of the complex. 

This is the eleventh post in a series of twelve on buying a home.  Click here for other posts in this series.

Once the home/condo has passed inspection and any repair items have been negotiated, you can begin to shop for homeowners insurance.  Lenders require that you carry homeowners insurance but you can still shop around for the best rate and coverage.  You will need to have proof of an insurance binder at closing.  Here are some things to consider:

According to the Federal Citizen Information Center, you may be able to save money using some of these tips.

• Consider a higher deductible. Increasing your deductible by just a few hundred dollars can make a big difference in your premium.
• Ask your insurance agent about discounts. You may be able get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire retardant roofing material. Persons over 55 years of age or long-term customers may also be offered discounts.
• Insure your house NOT the land under it.After a disaster, the land is still there. If you don’t subtract the value of the land when deciding how much homeowner’s insurance to buy, you will pay more than you should.
• Don’t wait till you have a loss to find out if you have the right type and amount of insurance.
• Make certain you purchase enough coverage to replace what is insured. “Replacement” coverage gives you the money to rebuild your home and replace its contents. An “Actual Cash Value” policy is cheaper but pays only what your property is worth at the time of loss-your cost minus depreciation for age and wear.
• Ask about special coverage you might need.You may have to pay extra for computers, cameras, jewelry, art, antiques, musical instruments, stamp collections, etc.
• Remember that flood and earthquake damage are not covered by a standard homeowners policy. The cost of a separate earthquake policy will depend on the likelihood of earthquakes in your area. Homeowners who live in areas prone to flooding should take advantage of the National Flood Insurance Program at www.floodsmart.gov.

For more detailed information, you can visit this link at Federal Citizen Information Center’s website, which will give you additional tips on how to save on your homeowners insurance.

Lastly, one question I’m asked often is whether shopping around for insurance will hurt a buyer’s credit score.  The answer is probably not.  Your lender will recognize the fact that you need to buy homeowners insurance before you can close and that the insurance companies will runa credit check on you.  As long as the inquiries are of a similar nature and are made within a limited period of time, buyers should see no negative impact on their credit. 

This is the ninth post in a series of twelve on buying a home.  Click here for the other posts in this series.

Once your offer to purchase has been accepted, a few things must happen relatively quickly, including the home inspection by an inspector hired by the buyer.  A home buyer has a period of time, as outlined in the purchase and sales agreement and generally 7-10 days, to have the home inspection performed and then notify the seller of any unsatisfactory results. 

Here’s some advice on how to find a home inspector.

Ten Questions to Ask Your Home Inspector.

There can be several parts to a home inspection, including the general home inspection, well, septic, radon and environmental testing.  Depending on the property, the market and your experience in home buying, you may want all or none.  I always recommend home inspections, no matter the market or the buyers experience. 

• General Home Inspection.  The inspector will: 
  • Evaluate the physical condition: the structure, construction and mechanical systems.
  • Identify items that should be repaired or replaced.
  • Estimate the remaining useful life of the major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes.
  • The inspector will also test for radon in air.
• Well Water.  Homes in Connecticut may either be on public water or well water.  If there is well water, the inspector will:
  • Test for bacteria in your drinking water and the presence of radon in water, among other things.
• Septic.  Homes can either be on public sewer or an individual septic system in CT.  The inspection is performed by licensed septic inspector, rather than the general home inspector.  A septic inspector will evaluate:
  • The use of the current septic system.
  • The condition and performance of the septic system.
  • The condition of the leaching system.                                                                Note: In CT, the buyer only pays for the septic inspection, not the pumping of the system, which must be paid by the seller. 
• Environmental Tests.  A home buyer may elect to have a variety of environmental related tests performed, including lead paint, mold, asbestos, and UFFI.  Some home inspectors will test for these items but they may also refer you to other companies.  Here are some things to consider if you are thinking about having these tests performed:
  • Expect lead paint in a home built before 1978.
  • Mold is present in every home but people with allergies or with diminished immune systems should be more cautious.
  • Asbestos was a common material found in insulating products and in CT, is commonly found in wrapping on pipes and water heaters, in floor tiles, shingles, etc.  It can be found in most older homes.

How Much Do Home Inspections Cost? Costs for home inspections vary, depending on the size and type of property as well as the number of tests being performed.  Expect to pay somewhere around $350 -$600 and up. 

Also keep in mind that the inspector(s) may suggest that you ”investigate” certain items  further.  For example, an inspector may note that there is a foundation crack.  He/she will likely recommend that you have a structural engineer analyze the crack for you and determine if you should be concerned or not.  This would be an additional expense. 

Renegotiating the Contract.  Many buyers attempt to use the inspection to renegotiate the purchase price, which aggravates many sellers.   However, if a buyer did his/her due diligence when putting in an offer, then there shouldn’t be too many huge surprises at the inspection and the price should hold.  If there are any big surprises, then it is perfectly acceptable for the buyer to request the seller repair the items, reduce the selling price or ask for money in lieu of repairs being made.  Getting the seller to actually do the repairs is completely out of the buyer’s control.

As-is Sales and What if the Seller Refuses to Make Repairs?  If you’re buying a house as-is, that means that the seller is not making any warranties about the condition of the property.  However, that does not mean the seller will not necessarily make repairs or offer to reduce the sales price of the property if a problem is discovered that is unexpected. 

For example, a buyer can see for himself/herself that a furnace is aged and that it may lhave to be replaced.  However, if that furnace is only a few years old, the buyer could reasonable expect that furnace to be functioning.  Upon inspection, the buyer discovers that the furnace was not installed properly and needs modifications.  The buyer can certainly request that the seller make repairs, although the seller may still refuse.

If a seller refuses to make repairs you requested, you have three options: 

1. Continue to negotiate and possibly give them an ultimatum – if you don’t do X, we’re walking.   Only do this if you really are willing to walk away from the deal.
2. Accept the property as it is and buy it, knowing that you will have to make the repairs yourself.
3. Terminate the contract – you are within your rights to terminate the contract as long as it’s done within the time-frame specified in the contract.

This is Part Two of the ninth post in a series of twelve on buying a home.  Click here for the other posts in this series.

In my previous post, I detailed everything that goes into an offer and most of what is included in a real estate purchase and sales agreement. But if you’re like most buyers, you want to go straight to the meat – the offer price and terms.  

I’ve posted on creating an offer and offer strategies before so I’ll refer you to my two earlier posts which contain ideas for gathering information on your purchase so you can make a good decision on price and terms. 

Let’s Make a Deal Part 1 

In Part 2 of Lets Make a Deal, I also gave you some ideas on how to position your offer, whether it’s a buyer’s or seller’s market. 

Let’s Make a Deal Part 2

The goal of any offer should be to get the seller to agree to your terms, or at least get their attention so they’ll negotiate with you.  Lowball offers have their place and can work – but be realistic.  If all the homes in the area you’re looking at are selling for $300,000, it’s pretty unlikely that a seller will take $150,000 just because it’s all you can afford and the market is softening. 

This is the ninth post in a series of twelve on buying a home.  Click here for the other posts in this series.

Helping buyers make and negotiate an offer is one of the most important tasks of the real estate buyer’s agent.  Before I get into the strategies of making an offer and negotiating, which I’ll have to cover in a second post because of length, buyers should completely understand the terms that go into an offer.  It is wise to review the real estate contract with an attorney either before making an offer or making the offer contingent upon an attorney’s review, so buyers understand their rights and responsibilities fully.

**Please note that in most of Connecticut, a real estate agent will fill out a “Purchase and Sales Agreement” with the buyers in order to make the offer and the seller can sign it directly(or negotiate or reject it).  In Fairfield County, a binder is submitted as an offer by the buyer and his/her agent and an attorney actually writes the Purchases and Sales Agreement once the price and terms have been agreed to. 

What Goes Into the Offer?

In most of Connecticut, the offer a buyer submits becomes the actual contract (or, Purchase and Sales Agreement) if the terms are agreed to by the seller.  The offer includes:

• Names and addresses of the two parties – buyer and seller 
• Address and sometimes a legal description of the property
• Fixtures and personal property – many agencies include a separate document with a list of what’s included/excluded and it becomes part of the contract once the buyer and seller sign it
• Sale price
• Deposit amounts and dates – Amount of earnest money deposit accompanying the offer and how it’s to be returned to you if the offer is rejected — or kept as damages if you later back out for no good reason
• Mortgage type, amount and mortgage contingency-the date by which a buyer must obtain mortgage commitment from lender
• Closing date – when the sale will occur 
• Seller’s promise to provide clear title
• Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller – in CT, it’s according to the custom of the Bar Association in that County
• Provisions about who will pay inspections including home, well, septic and pest and dates by which inspections must be completed and notice of unsatisfactory inspections given to seller
• A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing and that the property be in “broom clean condition”
• Property disclosures – buyers must be provided with and sign a copy of the seller’s property disclosure report, including mold and lead paint forms

Your offer may also include:

• A period of time in which the seller has to accept or reject the offer – for example, 72 hours
• A period of time in which the buyer may have their attorney review and approve, also 72 hours
• Riders – condominium, septic, well, sale of buyer’s property (Hubbard Clause)
• Seller concessions such as buyer’s closing costs

Major Contingencies

A contingency is an event that must take place in order for a buyer to purchase a property.  The most important ones are:

• Mortgage  – a buyer must obtain financing (in the form of a mortgage commitment) in order to purchase property
• Home Inspection – a buyer must provide the seller notice of an unsatisfactory home inspection by a certain date in order for buyer to terminate contract with seller

Other Items That Accompany the Offer

Earnest Money Your offer must also include earnest money or a deposit.  This can be made with a check which goes to the listing broker who holds the money in escrow.  Generally, the check is only deposited once the seller has accepted the offer.  A second deposit in CT is customary but this deposit is made by a cashier’s or certified check within 7-10 days of contract acceptance.

Pre-Approval Letter  I always include the buyer’s pre-approval letter from the bank with the amount of the offer – never the full amount the buyer is approved for. 

Personal Letter In a strong seller’s market, a personal letter from the buyer can make one buyer stand out from a crowd of other buyers.  In a buyer’s market, this letter is generally not neccessary.

This is the eighth post in a series of twelve on buying a home.  Click here for the other posts in this series. 

You’ve prepared yourself by putting your finances in order, shopping for a loan, getting pre-approved for a mortgage amount you can afford and hiring a buyer’s agent.  Now, you’re ready to find the house of your dreams – or at least the best house you can afford. 

House=Life

Buying a house is an expression of your personality and lifestyle.  If you are a private person who doesn’t like nosy neighbors or noise, then condo living isn’t for you.  Or, if you have small children, then you probably don’t want ot be in a secluded area where there are no other children for miles.

I begin my search for the perfect property with clients by asking them a lot of personal questions such as:

• What do you do for a living?
• How long do you anticipate living in this house? Or, what is your five-year plan for yourself?  Marriage, children, new job, etc?
• How many family members will be in the home? And what are their ages?
• What are your hobbies?
• Do you entertain or plan to have overnight guests?
• Do you consider yourself handy around the house?

Then, I ask questions about what towns or area buyers are looking for, things they like and dislike about homes they’ve seen.  I may ask buyers to describe the house they see themselves living in.  Lastly, I’ll ask clients for the details – number of bedrooms, baths, size, style, location and amenities. 

Then, it’s a process of matching needs to what is available on the market – both through the multiple listing service and for sale by owner properties.  An agent will suggest properties but many people like to look online for themselves and will ask to see certain properties.  But be aware that your agent has access to the most up-to-date listings – realtor.com and other advertising and lead generation sites may have houses advertised that are no longer on the market.

Buying a house will likely involve compromises – trading size for a better location or one less bathroom for a larger family room.  Sometimes, you may to spend more than you wanted or be prepared to do some work once you move in.

Here are some tips on looking for a house put together by Freddie Mac:

• Take pictures inside and outside the home.
• Bring a spouse, family member, or friend.
• Make sure the house fits into your budget.
• Ask about utility and maintenance costs.
• Think of commuting time and costs.
• Compare what you’d like to have against what you really need.
• Consider your monthly budget – can you afford the renovations and maintenance that you’ll need to do?
• Compare what you’d like to have against what you really need.
• Don’t make a “spur-of-the-moment” decision.

I’ll add two more tips:

• Allow plenty of time.  It typically takes about 1 month to complete inspections, get loan commitment and close on a property – that’s after you already found the house and have an accepted offer.
• Ask your agent for help.  Your agent may be willing to preview properties for you to save you time.  I’ve done this for clients who are out of town and I send them pictures.  They can decide whether to see the house or not.

This is the seventh post in a series of twelve on buying a home.  Click here for the other postings in this series.

In addition to conventional mortgages, there are several programs available to home buyers which are meant to encourage homeownership.  While looking for a loan, ask your lender or real estate agent if you might be eligible. 

CHFA - This is the program that I refer more clients to than any other.  CHFA, or Connecticut Housing Finance Authority, offers a “first time home buyer” program which can be a great deal for the right person.  There are income limits (currently $81,000/year for a 1-2 person household in most of Hartford County) and sales price limits (vary greatly depending on area and number of units).  The property must be owner-occupied throughout the entire term of the loan and if the home is sold within 9 years, the profit may be subject to a recapture tax if certain conditions are met.  

There are some really great things about the CHFA program:

• Low interest rate – currently 5.375%
• More lenient credit guidelines
• “First time home buyer” only means that you cannot have had ownership in a property in the last 3 years
• You can borrow more than 100%
• Borrowers can lock in rate for 4 months
• Single family properties, condos and 2-4 unit multi-families are eligible

One word of caution: Up until last year, when I presented offers on properties for buyers who had a CHFA loan pre-approval, I would receive some flack from seller’s agents.  The reason for this is that CHFA used to have more stringent appraisal guidelines and this left many sellers and their agents uneasy.  However, CHFA has eased their appraisal guidelines and seller’s agents should not have this issue any longer.  If they do, your buyer’s agent should be willing to ease their concerns.

FHA -The Federal Housing Authority insures loans for first time home buyers that lenders may not otherwise offer.  Similar to CHFA in that FHA loans have certain borrower guidelines, FHA has sales price limits as well as credit requirements.  FHA allows borrowers to put as little as 3% down and allows you to include many closing costs in the loan. 

VA – Available through many lenders, VA loans are guaranteed by the federal government to give military personnel more access to homeownership.  Eligible borrowers include active and inactive members of the armed forces who meet a certain criteria for length and time of service.  Reserve forces may also qualify, depending on length of service, as may those who were discharged and widows/widowers provided spouse’s death was service related.  The biggest negative to VA loans is a lending fee which varies depending on the borrower’s eligibility.  However, the lending fee may also be financed.

If you qualify, there are many positives about getting a VA loan:

• No Private Mortgage Insurance

• No money down required

• 100% financing plus closing costs, which are limited

• Rates comparable to conventional loans

Here are some other programs available:

Good Neighbor Next Door – for teachers, law enforcement, firefighters or emergency technicians.

Home of Your Own – for home buyers with disabilities.

Military Homeownership Program – a CHFA program for military personnel.

Police Homeownership Program – CHFA

This is the sixth installment in a series of twelve called Home Buying 101.  Click here for the other articles in this series. 

Once you’ve located a buyer’s agent, use him/her as a resource for a lender, inspector, attorney or anyone else you may need in the home buying process.   Many agents will not begin to show houses to a client until they have obtained mortgage pre-approval from a lender – I am one of those agents.  For this reason, some people choose their lender first.  That’s alright if you either have a previous business relationship with the lender or were referred to them by someone you know and trust. 

If you don’t know the lender, then be careful about picking one based on what you see on-line and what you discuss with a salesperson over the phone.  I suggest finding the agent first and then asking them for a referral to a lender.   If you’ve already started working with a lender and have obtained a pre-approval, you don’t have to stick with them if your agent suggests someone else.  While you’re looking for houses, you can also look at other lenders.

Agents know who the best lenders are – we work with them personally and get feedback from our clients.   There is a big difference in service, fees, rates and reputation among lenders. Also, your agent should be able to match you to a lender who can offer you the type of loan(s) that are best for you such as VA, FHA, CHFA, or conventional – not all lenders offer all programs.

This is an excerpt from an article I wrote called, “Your Dream Team – Finding the Best Homeownership Professionals,” regarding hiring a lender:

While your interest rate is very important, also consider the reputation of the lender, how the lender responds to your questions and the location of the lender.  You need to be able to rely upon your lender to be available when needed (nights, weekends) and to be responsive to your needs.

• Ask your agent or attorney for lenders.
• Search for rates on-line at www.bankrate.com or www.hsh.com.  Your local paper’s real estate section will also publish rates.  Check local banks or credit unions, too.
• Consider using a mortgage broker.  A broker has access to more loan options than most banks.  The downside is that their fee, which is paid by the actual lender, may get passed on to you.  Check with the National Association of Mortgage Brokers at www.namb.org for local members.
• Review all the loan terms before making a decision.  Each lender will have a unique set of services and fees –  such as points paid at closing, type of loan, private mortgage insurance, prepayment penalties, and rate lock-in fees and time period, to name a few.   The Federal Trade Commission has a wonderful lender checklist for consumers on their website: http://www.ftc.gov/bcp/conline/pubs/homes/bestmorg.htm. 

Whomever you choose, your goal is to get the best terms available to you.