6. Can you provide at least three names of recent clients who will serve as references, at least one of whom was a first-home buyer?

NOTES:.

Best Answers:1. Yes.2. The longer the better, but at least two years.3. Yes.4. Should be a minimum of ten.5. The more the better, but should be at least five.6. Only acceptable answer is "Yes."

Mortgage Broker Reference Questionnaire Here's what to ask the mortgage broker's references. You can add any other questions that interest you, for example, whether the person tried to negotiate the broker's fee down.

Name of mortgage broker:Name of reference:Date:1. How did you choose the mortgage broker? Did you know the broker before you worked together?2. What kind of loan did you get? Are you happy with it?3. Was the broker responsive? Did the broker return calls and emails promptly, follow through on promises, and meet deadlines?4. How long did you look?5. Did the broker give you a variety of options?6. Are you happy with the loan you got?7. Did the broker help you coordinate other details of your purchase, like working with the title company or insurance agents?8. Did the broker keep you up to date, and explain everything in terms you understood?9. Would you work with the broker again?

OTHER COMMENTS:.

Who Does What

Straight to the Source: Dealing With Lenders

Sometimes, a homebuyer goes directly to a lender, rather than dealing with a mortgage broker. The buyer may like the personal aspect of walking into a local bank branch or even have found a better deal than is available through a broker. You can often find a lender's advertised rates on the Web or in your local newspaper-we'll talk about searching for that in Chapter 6.

If you decide to work with a lender, you'll probably still be dealing primarily with a person within the institution called a "mortgage banker" or "loan officer." This person performs the same duties (more or less) as a mortgage broker, except that instead of scouring the entire loan market, the loan officer will help you identify which of the bank's own portfolio of loan products suits your needs. In other words, you'll be limited to the loan packages offered by that institution.

The loan officer should help you fill out your application and handle necessary paperwork like obtaining your credit report and getting an appraisal. However, once you've chosen a bank, you won't be able to choose your loan officer as you would a broker-or your available choices will be limited.

How much personal contact you have with a specific loan officer depends on the lender. Lenders come in all shapes and sizes, from the behemoth bank to the local credit union. Some operate almost entirely online, even having you apply online. These lenders may be keeping their overhead low by cutting out the operating costs of the local office, passing the savings on to you. If you work with online lenders, you'll have to rely more heavily on technology (email, fax machines, and scanners) to transmit documents. You may also have to accept that you'll never meet the loan officer face to face or that you'll be dealing with several different people during the transaction.

Your Fine Print Reader: The Real Estate Attorney

In some states, real estate attorneys are a regular part of the homebuying process. Even in states where this isn't the case, a complex transaction may need an attorney's assistance. After all, if you don't use an attorney and the transaction later goes awry, you'll still have to hire one, at much greater time and cost. Save yourself the headache by working with a lawyer to structure the deal, not salvage it.

TIP.

There's no substitute for your own attorney. Don't expect the seller's attorney, the closing agent (who may be an attorney), the real estate agent, the mortgage broker, or anyone else in the transaction to look after your legal interests. Don't expect the seller's attorney, the closing agent (who may be an attorney), the real estate agent, the mortgage broker, or anyone else in the transaction to look after your legal interests.

Who Real Estate Attorneys Are

A real estate attorney is, by definition, one who focuses on real estate transactions. This may sounds obvious, but you don't want to get stuck working with an attorney whose main expertise is estate planning or corporate mergers. Ideally, your attorney will have several years of real estate law experience, at least some of it working directly with other, more experienced attorneys. Additionally, in most cases, you'll want an attorney who specializes in helping buyers with their residential real estate transactions: drawing up contracts, researching title, and the like. An attorney who specializes in litigating disputes is a better fit if you think you'll need to sue or you might be sued-but when structuring your deal, you'll be trying to avoid that result.

CHECK IT OUT.

Are attorneys always involved in real estate transactions in your state? Any experienced real estate agent should be able to tell you this right away, but you can also check with your state bar association. Find it through the American Bar Association's website at Any experienced real estate agent should be able to tell you this right away, but you can also check with your state bar association. Find it through the American Bar Association's website at www.abanet.org/barserv (under "Find a local, state, or specialty bar association"). (under "Find a local, state, or specialty bar association").

What Your Real Estate Attorney Does for You

Depending on your needs and which state you're in, your attorney may become involved in one or more of the following: negotiating, creating, or reviewing the sales contract; overseeing the homebuying process to check for compliance with all terms and conditions of the contract; performing a title search or reviewing the title abstract or title insurance commitment (to determine whether there are any liens or encumbrances on the property); explaining the effect of any easements or use restrictions; negotiating or representing you in a contract dispute with the seller; and representing you at the closing.

TIP.

Check your prepaid legal plan. Such plans may provide legal services for homebuyers, so if you have one, this may be the time to use it. Such plans may provide legal services for homebuyers, so if you have one, this may be the time to use it.

An attorney can also assist you in complex transactions, for example if: * Legal claims have been made against your prospective house that must be satisfied by the time the property is sold.* Problems show up with the title: for example, the driveway is shared by the house you want to buy and the neighboring house, but that isn't reflected in the title.* You need help reviewing community interest development agreements and documents like CC&Rs, a co-op proprietary lease, or a new home contract drafted by the developer.* You need to structure a private loan from a relative or friend to make the purchase.* You purchase the house jointly with others and need to structure a cobuyer agreement and document how title will be held.

Getting the Best Attorney Out There

You may be tempted to get the cheapest attorney you can, but it's smarter to get one who's a real estate expert, even if it costs more. If you pay the attorney by the hour, the seasoned one will take less time than, for example, a criminal defense lawyer, who'll need to spend time just researching real estate laws.

Many, but not all, states require you to have a written fee agreement with your lawyer. It's worth doing, anyway. Your agreement establishes the terms of representation: what the lawyer is expected to do, how much you'll pay and on what basis (for example, hourly or a flat rate), and when the lawyer must be paid. Often you'll have to pay some advance money, called a retainer-but the rest of the lawyer's fee will be paid later.

TIP.

Count the hours. If you have an hourly arrangement with your attorney, here's a way to keep costs in check: Ask that the attorney contact you before starting each discrete task (like reviewing condo CC&Rs) and give you an estimate of how long that task will take. If it sounds reasonable, say okay, but require the attorney to contact you if additional time is needed. If you have an hourly arrangement with your attorney, here's a way to keep costs in check: Ask that the attorney contact you before starting each discrete task (like reviewing condo CC&Rs) and give you an estimate of how long that task will take. If it sounds reasonable, say okay, but require the attorney to contact you if additional time is needed.

To find potential attorneys, get recommendations from friends, coworkers, and trusted real estate professionals. While you can check with professional organizations or use lawyer referral services, these systems suffer from the same problems as with other professions: Other than membership, you have no real way to gauge the person's effectiveness.

Then interview three or four attorneys. Clarify in advance whether you must pay for this interview time. Some attorneys offer free consultations, others don't. It may be worth paying, though, to start your case off with a highly regarded attorney. At the interview, ask about not only the attorney's general legal skills, but also how much time he or she spends on transactions similar to yours-especially if you're buying a condo, co-op, or newly built house.

If possible, get and check references for any attorney you plan to hire, especially if a substantial amount of legal work (and money) is involved. While some attorneys will be reluctant to provide names of clients (because of client confidentiality), it doesn't hurt to ask.

Who Does What

CD-ROM.

For a handy set of questions to use in your interview and reference checks: Use the "Attorney Interview Questionnaire" and "Attorney Reference Questionnaire" in the Homebuyer's Toolkit on the CD-ROM. Samples of these forms are shown below. Use the "Attorney Interview Questionnaire" and "Attorney Reference Questionnaire" in the Homebuyer's Toolkit on the CD-ROM. Samples of these forms are shown below.

TIP.

You can look up an attorney's bar record. Attorneys who violate ethics rules may be disciplined by the state bar (the organization in charge of licensing and regulation). Many states have online tools that allow you to check records. Type "[ Attorneys who violate ethics rules may be disciplined by the state bar (the organization in charge of licensing and regulation). Many states have online tools that allow you to check records. Type "[your state's name] state bar" into a search engine.

Your Sharp Eye: The Property Inspector

Before you buy a property, you'll have it inspected at least once (per a contingency you'll put in your contract, as discussed in Chapter 10). The purpose is to make sure that you're getting what you pay for-namely, a house in as good a condition as it appears to be. Suppose you make an offer assuming a place is in tip-top shape, then discover that the bathroom needs to be redone because of a mold problem? The value of that property suddenly plummets-you might not even want to buy it at all.

The typical inspection contingency allows 14 days for inspections to be completed, and three days after that for you to approve them. That's not much time-and in some U.S. regions, the best inspectors have a waiting list. So it's good to choose your inspector before agreeing to buy a house.

Who Inspectors Are

A general home inspector visually examines your potential home, inside and out, for mechanical and structural flaws that could impact its value. Then the inspector prepares a written report summarizing the findings. General inspectors usually have a background in general contracting, residential homebuilding, or engineering. Some states require home inspectors to pass a test and be licensed, while others do not. The more specialized inspectors have other areas of expertise and backgrounds and may need a state license (licensing is fairly common for pest inspectors, for example).

Attorney Interview Questionnaire Ask the following questions, as well as any specific to your transaction-for example, regarding the attorney's experience with condo, co-op, or newly built house purchases.

Name of attorney and contact information (phone, email, etc.):Date of conversation:1. What percent of your time do you spend helping residential real estate buyers?2. How many years have you been handling residential real estate legal matters?3. Do you charge hourly rates (if so, at what rate) or flat fees for services?4. Are you an active member of the state bar association?5. Have you ever been subject to any bar association disciplinary proceedings?6. Have you ever been sued for malpractice? What was the result?7. How many individual home buying clients have you represented in the past year?8. Can you provide the names of three recent clients who will serve as references?

NOTES:.

Best Answers:1. More than 50%.2. The longer the better, but at least two years.3. No one right answer-you'll want to compare fees between attorneys. But try not to base your decision solely on how high or low the fees are.4. Only acceptable answer is "Yes."5. Only acceptable answer is "No."6. Only acceptable answer is "No."7. Should be a minimum of seven.8. Not all attorneys will provide references, but if one does, it's worth your time to follow up.

Attorney Reference Questionnaire Here's what to ask the attorney references. You can add any other questions that interest you-for example, if you're seeking a particular type of legal help, such as with buying a co-op.Name of attorney:Name of reference:Date:1. How did you choose the attorney?

2. Did you know the attorney before you worked together?

3. What kind of legal services did the attorney provide?

4. Was the attorney responsive? Did the attorney return calls and emails promptly, follow through on promises, and meet deadlines?

5. How long did you work together?

6. Are you happy with the attorney's services?

7. Did the attorney keep you up to date, and explain everything in terms you understood?