In a typical home sale involving financing, these are the major players involved and some info about the role each plays:
Buyer's Agent:The buyer's agent is a real estate agent or Realtor who acts on behalf of the buyer in order to secure a new property. This typically involves searching for properties, negotiating on a buyer's behalf and generally acting in the buyer's best interest. Home shoppers and buyer's agents may or may not have an actual signed agreement in place for exclusive representation.
Listing Agent (Seller's Agent):The listing or seller's agent represents the other party involved in the transaction, the seller. In a typical home sale, the seller enters into a listing contract with a real estate agent for the exclusive right to sell the property. Among the responsibilities of a seller's agent are marketing a property, negotiating on a seller's behalf, advising a seller on pricing the home effectively, arranging access to the property for prospective buyers and generally acting in the seller's best interest.
It should be noted that it is possible for an agent to be both a buyer's agent and seller's agent on the same home sale, known as dual agency. Disclosure of this practice is required and the agent is responsible to each side on a more limited basis.
Loan Originator (Loan Officer):The loan officer is usually a buyer's first point of contact with a mortgage lender or broker. Loan officers are also known as loan originators, mortgage bankers, mortgage brokers, lenders, mortgage consultants, etc. They are responsible for assessing each buyer's credit profile, advising buyers on program and rate availability, gathering initial supporting documentation and generally helping buyers with the mortgage process. The loan officer is basically in charge of making sure a mortgage has a high probability of approval before moving it forward.
Mortgage Processor:Once a loan officer has gathered the initial documentation from a borrower and determined that the loan should proceed to the next step in the process, he/she sends the loan to a mortgage processor. The mortgage processor does much of the behind the scenes work on a mortgage. They are in charge of gathering further documentation, coordinating with title and homeowner's insurance agents and generally moving mortgages along in the process.
Underwriter:The underwriter is in charge of making the official decision on a loan file for a lender. The mortgage processor will move the file into underwriting once much of the behind the scenes work is completed. At this point, an underwriter reviews the file and approves, suspends or declines it. If the file is approved, it is typically a conditional approval. This means that the file is temporarily approved, but need some items addressed and is fully approved as soon as the underwriter's conditions are satisfied. Most files that reach the underwriting phase are conditionally approved. If a file is suspended, it simply means the underwriter requires more info to make an official decision. If the file is declined, that is typically the end of the line and the borrower will likely have to wait to reapply until the reason for the decline has been addressed.
Home Appraiser:The appraiser is in charge of providing a value estimate on a home. For residential homes, this figure is typically arrived at by inspecting and measuring the property and comparing it to recent similar home sales. Recent similar home sales are commonly referred to as comps or sales comps (comparables). A few days after inspecting the home, the appraiser provides a report to the lender, who then provides it to the borrower. If the value appears accurate and the appraisal was properly done, the process moves forward without change. If the value is low, the borrower may renegotiate with the seller or walk away from the purchase entirely.
Homeowner's Insurance Agent:The homeowner's insurance agent provides the buyer with insurance on the new property. The agent is chosen by the buyer and works closely with the lender, usually the mortgage processor directly, to provide sufficient coverage against a loss on the property. Buyers may choose to have more coverage than the lender requires as long as the lender's minimum requirements are met.
A separate flood insurance policy may be required in certain areas determined as flood zones. This policy may be obtained from the same agent or another agent entirely.
Title/Escrow Agent:Title agent is a broad term because there are multiple persons involved in the title, escrow or closing part of the purchase transaction. You may hear terms like escrow officer, closing agent, notary, title agent, etc. This can vary depending on where you are located and which company you use. Essentially the title agent is in charge of ensuring the home has a clear chain of title and covering the lender and/or buyer against any title claims that may arise after closing. The title agent may or may not be the same as the escrow or closing agent, who is in charge of balancing all of the final figures, carrying out the actual signing and closing and distributing funds to the necessary parties.
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