Buying a Home

What Makes Buying a Home So Complicated?

Buying a new house is bound to be stressful as it is one of the biggest decisions you will be making in your life. To add to the stress, the home buying process may appear unnecessarily complicated.

Over the years, traditional brokers have convinced homeowners and buyers that their expertise is necessary to ensure that everyone gets a fair share. Besides, the government has passed several regulations intended to protect consumers. However, the nature of these regulations and the difficulty in interpreting them make the home buying process look complicated.

Understanding the Complexity of the Home Buying Process

The RESPA law was passed by the Congress in 1974. This law stopped the routine price gouging and kickbacks between agents and service providers during the process of buying a house. But this law in turn made the entire purchase process more complicated for the consumers.

As of today, there are several entities involved in the home buying process. There is an escrow service that holds the home deposit while the contract is being settled. Secondly, a title insurer is responsible for evaluating if the property under consideration has boundary issues or liens. Next comes the mortgage provider who lends money that most consumers require to purchase a house.

Hiring a Good Mortgage Professional

In addition to this, an insurance provider is covering the insurance necessary to obtain the mortgage and secure the property if a catastrophe occurred. Lastly, a home warranty provider provides a limited warranty on big house items like the water heater and the roof. Due to the RESPA regulations, all these entities come with their own separate fees that cannot be grouped. There are real estate agents who may overcharge consumers separately for their services to add to the burden.

The Cost of Commission

Traditionally, sellers used to pay approximately 6% of the transaction’s value to their own broker and the buyer’s agent for their services. Today, buyers search for properties through online marketplaces like Zillow, Google and send them to their agents. In most cases, the only job a buyer’s agent performs is opening the house for viewing.

Despite such limited work, the buyer’s agent still enjoys half the commission paid to the sellers. If you calculate this amount based on the price of the house, it is a huge sum. Buyers may think that the seller is paying this amount, but they do not understand that this amount is typically built into the house’s listing price.

Hiring a Good Mortgage Professional

As the process of buying a house remains complicated, and there is a huge cost of commission involved, it is recommended to hire a mortgage professional who can smoothen the process and make it less complicated and costly for you.

A professional mortgage expert can eliminate the need for an overinflated list price and help buyers secure a competitive mortgage rate and insurance rate. Besides, a seasoned expert like the ones at Rex Homes, can take care of title, escrow, and warranty themselves and help you move closer to fulfilling your home buying dreams.