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The Key Players in Real Estate

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The game’s about to begin, a real estate transaction is about to take place, and the starting lineup has just arrived. While the real estate agent might seem like the quarterback or point guard, there are plenty of other positions that play a vital role. These are the key players to know about — they help house sales go through and one day, will help your transaction as well.

Mortgage Lender

A mortgage lender is a financial institution (usually a bank) that provides financing (a loan) for a real estate transaction. Before buyers even start looking at houses, they need preapproval from a bank to show they’re serious — sellers often reject offers that don’t have preapproval.

Mortgage lenders also work with appraisers to ensure they approve the correct amount for a loan. If the value of the property doesn’t match the loan amount, this can make it more difficult to get a mortgage.

Home Inspector

People putting an offer in on a house often include a contingency for home inspections. In other words, if a home inspector finds some major problems and the offer is based on the results of an inspection, the potential buyers are protected from having to go through with the sale.

One thing to note is that not everyone opts for an inspection. Investors looking for flips or rental properties often put in offers that don’t require an offer so they can get the property faster and for a lower price. But if you’re looking for a home to live in, working with a home inspector is a really good idea.

Appraiser

Appraisals are different from home inspections because they assess the value of the home, not the condition. As mentioned, appraisers are usually sent out by banks to double check the value of the property.

Agents

There are two crucial agent roles you need to know:

  • Listing agent: Works with the seller (the one who’s posting the listing). Whenever you see a “For Sale” sign with a phone number on it, that’s the listing agent.
  • Selling/buyer’s agent: Works with the buyer (the one looking to buy the home).

To make matters more confusing, sometimes the listing agent and the selling/buyer’s agent can be the same person! Learn more about dual agency in our 5 Things Real Estate Agents Don’t Want You to Know blog.

Brokers

Brokers are legally responsible for the agents who work for them. They carry Errors & Omissions insurance, and if issues come up for (or with) a real estate agent, the broker is the one who can step in.

The listing broker is the listing agent’s boss and the selling or buyer’s broker is the boss of the buyer’s agent. It’s not often that either brokers interact with the buyers or sellers (unless there’s a problem with the agent).

Title Company Representative

Title company representatives do the actual closing of a property and serve as a neutral third party. These reps release funds from both sides and ensure that everyone has fulfilled their obligation.

Real Estate Lawyer

With all the documents that need signing in a real estate transaction, it’s no surprise that some people hire real estate lawyers to help them work through the paperwork. Sometimes people opt for a real estate lawyer to take the place of an agent and/or broker.

Transaction Coordinator

Transaction coordinators are the playmakers from behind the scenes. They iron out deadlines and details, communicate to all parties involved, enter listings into the MLS and check over closing documents, to name a few things. Essentially, they do everything except show houses! Not every brokerage or agent has a TC but many do.

You

Yes, you! As the buyer or seller, you are one of the biggest players in a real estate transaction. You are the reason every other role exists and why they’re coming together in the first place. But if looking at this list has you feeling about as overwhelmed as a soccer coach for 3-year-olds, fret not. 

You can work with RealtyHive, a one-stop-shop that makes the buying and selling process easier than ever. Find agents (and potentially get cashback at closing), list your property, or bid on your new home in one of our time-limited events, all in one place. In other words, play ball!

What Exactly Is a Title Company?

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When it comes to selling or buying a house, everyone knows about real estate agents. Many people know about house offers and contingencies, and even more people know about the need for homeowner’s insurance. But there’s one very crucial element to real estate that remains somewhat of a hazy mystery:

What exactly is a title company?

What is a title?

Before buying a house from someone, you need to make sure that they legally own the property. A title company does just that. They run a search to ensure that, before a sale goes through, the current homeowners legally own the home. 

People sometimes confuse titles with deeds:

  • A deed is a legal document that transfers the property between owners.
  • A title is a legal document that states who owns the property. When you become the new homeowner, the title is now in your name — sort of like registering your car.

When is a property legally owned?

A property that’s owned free and clear has no mortgages or liens associated (the house is paid off). However, you can still sell a house when you have a mortgage.

In this event, you’ll give your money to a middle man (usually the title company that holds the escrow) and they’ll pay off the seller’s mortgage. The proceeds will then roll into a new property, their bank account, etc.

Here are some instances where a property might not be legally owned:

  • Unpaid taxes
  • Outstanding mortgages (mortgages that weren’t previously discussed)
  • Illegal boundaries or encroachments
    • Ex: A house that is not entirely on the land that it’s zoned/surveyed for (such as a house that’s partially built on a neighbor’s land) would bring up issues.
  • Restrictions, leases, or easements: A person can still legally own a property with any of these, but they must be disclosed to the buyers.
  • Problems with the deed
    • Ex: The previous sellers bought the house from someone in their family or in some other “under the table” format but there is no deed to prove they own the house.

Every homeowner needs title insurance.

The last thing you want is to buy a house with a legal issue. If that happens, the problems of the past homeowners become your problems unless you have title insurance.

Title insurance protects you in case the home you’re planning on buying is not legally owned.

Title company ≠ title agency.

A title agency represents the title company; the title company itself underwrites and distributes title insurance. When you close on a house, you’ll most likely meet with a title agency (and you can choose which agency you work with).

Can title companies get something wrong?

It’s scary to think about but it’s true nonetheless: sometimes title companies make mistakes. 

In all honesty, many times what might seem like a mistake is actually a lack of comprehension or understanding on the part of the buyer or seller. This is why it’s essential to have a lawyer or real estate agent with you to go through the closing paperwork.

However, when a title company truly is at fault, they are liable. Be sure to carefully look over everything before signing and again, bring a lawyer with you. 

Will title companies continue to play such a vital role in the future?

It’s more than likely, but the paperwork part might change. Instead of printing massive amounts of paper for reading over and signing, there’s a chance that title agencies will go paperless in the future. Cook County (where Chicago, IL is located) uses blockchain for closing transactions, eliminating paper.

Whether you’re a seasoned vet or complete novice in the real estate industry, RealtyHive has the resources you need. Sift through our listings to find a home near you (and get cash back with Cashifyd), sell with a time-limited event, or browse through our blogs for the latest in real estate info.