Find An Agent or Lender First?

Question

Hi! I am starting out my real estate journey and I am planning on house hacking my first investment. I've been doing my homework and now I am finally ready to begin the home buying process. I currently am in a lease until October (5 months from now). My hope is to find a deal before my lease is over so that I can move in before it is up. I understand the process can take a while between getting pre-approved and actually finding a home. My question is - should I find an agent or a lender first? I worry that if I find a lender first, then I am afraid my pre-approval will expire before I am able to find a good agent and have him/her find a good deal in time. I understand I have 45 days to have my credit pulled unlimited and have it count as one inquiry - therefore do I utilize this time to shop rates AND agents? That way by the 45th day, I can lock in a rate as well as an agent then worry about my pre-approval expiring from this point on rather than earlier in the process?

Hope this made sense and I thank you in advance for your help!

Alex Gunnerson · Answer

I’m my opinion your best best it to find an agent who has experience working with investors first. A good agent will have relationships with a few different lenders they trust who they can refer you to.

Stephen Bernard · Answer

Hey @Giovanna Leyva!

I recommend finding a good investor-minded agent first, they typically bring with them a team of people that can help make your first transaction a success. Now, a lender and an agent SHOULD be working hand-in-hand. A lot happens behind-the-scenes, so the established relationship there is paramount to smooth communication and an efficient transaction between the buyer and the seller. Your team makes all the difference.

All that said, when you find an agent first, you will do an initial consultation. This is where you'd outline your vision, and we'd set the goal for the transaction; consider it the "what." Then, you go through the preapproval process and the lender will anchor that vision in reality, consider it the "how"; if we don't have what we need, a good one will give you the pathway to achieving your vision. Then, the REALTOR will take over again and you'd do the fun part- house hunting!

The transaction will go through phases of back and forth between the lender and the agent while they are servicing the client,  and the realtor should be communicating with the lender every time they and the client step into a home!

Hope this helps, feel free to reach out with any more questions!

Dan H. · Answer

If you find a rockstar investor agent or a rockstar lender they will know and associate with other rockstars.

My point is instead of trying to figure out which to find first, try to find a rockstar at either one and you will likely find a rockstar lender and rockstar investor agent.

If you desire a referral for a local rockstar lender PM me.

Good luck

Jonathan Taylor · Answer

@Giovanna Leyva I am biased but how do you know what you can buy if you haven't spoken to a lender who has prequalified you? You can shop simultaneously but its good to know your price range before you shop. FYI, for house hacks, you'll need 15% down for a duplex, and 20% down for a 3-4 unit based on conventional guidelines. An SFH with an ADU can be purchased with 5% down.

Alec Reano · Answer

@Giovanna Leyva,

There are a couple of ways to approach your situation. However if I was you I would find an agent that understands your goals and one that you trust and ask them if they have any lenders that they recommend.

Typically agents will know a number of different lenders for various buyer circumstances which they can refer you to, but I always recommend talking to a couple lenders if possible since rates change, and not all lenders are equal. (This can also go the other way around where you ask your lender for an agent).

In general its going to be important for you to get pre-approved regardless, so you at least know where you sit in the market and what your purchasing power is. Since, it's going to be hard to search for homes if you don't know which are inside your budget. Also searching without knowing could cause you to waste tons of time.

Looking at your timeline, Id get pre approved now since it typically takes 20-30 days to close on a property once your offer is accepted which reduces your search window to 4 months or so. Additionally, based on the market conditions and your circumstance it may take you some time to find a property and get your offer accepted due to how competitive the market is right now for home buyers.

Cheers & Hopefully this helps.

Alec

Sherri Stokes · Answer

Nothing to add to the great advice above. When you’re ready, Giovanna, I know a few investor-friendly, knowledgeable Realtors there in San Diego. Just let me know. Good luck on your search!

Nicolas Trejo · Answer

Find a high volume agent that does a lot of deals.  They will connect you with financing.

Eliott Elias · Answer

Find an agent that can recommend a lender

Twana Rasoul · Answer

@Giovanna Leyva I honestly wouldn't worry about the whole inquiry issue.  You can run your credit once and you likely would have no need to do it again for months unless there is a major that needs to be considered.  Where ever you are, find an agent that is an investor themselves in your local market and see many deals they regularly do related to house hacking or type of property you are interested in and that will give you at least a starting point.  For lenders, the only important thing is that they can execute and ideally close very fast when they need to.  One good question to ask a lender is what happens once you remove all contingencies with lender approval of course and the lender cannot close.  If you lose any or all of your deposit (EMD), would the lender cover that?   or if a lender tells you that they cannot advise on removal of loan contingency, run the other way.

Dwayne Poster · Answer

You need to know what your financial capacity is, and it doesn't take a Realtor referral to walk in and talk to your local bank. I've engage in Realtor referred professionals, but my bank is a key partner in my financial matters.

Find An Agent or Lender First?

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