When it comes to real estate and mortgages, everyone is an expert. Why? Because an awful lot of people have real estate stories and experiences to share. Buying a home is a big event and well meaning people want to keep you from making a big mistake. If you are in a social situation and mention that you are considering purchasing a home-see what happens. You will be surrounded by folks who are willing to share not only their success stories on negotiating and securing both a property and a mortgage, but their horror stories as well-the low appraisal, bad inspection, how their Realtor didn't troubleshoot every possible contingency-the list goes on and on.
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The fact is, that unless someone is currently making their living in mortgage lending, real estate sales, the title insurance industry, or new home construction they probably aren't in a position to comment on how a real estate transaction should unfold. There are just too many variables.
The first set of experts and probably the most influential that a potential home owner may encounter are Mom and Dad. It is very hard for a son or daughter to tell their parents "here's the line-don't cross it." Mom and Dad often do have home ownership experience but that experience may be years old and have nothing to do with what has happened since the mortgage meltdown of 2008. And while Mom and Dad may have something of relevance to add to the conversation in terms of suggestion on size or type of home or supporting you in your decision, unless they are engaged in the real estate industry currently, they really aren't in a position to address value of the property, what type of mortgage is best for you or whether or not the lender is asking for too much information or whether the home is typical for the area. In fact, since real estate markets are very local in nature, an out of town parent needs to recognize that what is applicable to their area may not apply at all to another location.
Where mom and dad may be helpful is to give you a list of questions to ask your sales agent or lender. Some of those questions may concern subjects like average utility payments on a particular property, the incidence of crime in the neighborhood, what the resale possibilities are etc. The types of questions that a first time home buyer might not think to ask. I never have a problem if a parent sits in on a mortgage application to help their offspring understand some of the documents or to ask basic questions about the loan. If the parent wants to assure themselves that I am a straight shooter, that's fine. However, the ins and outs of the mortgage process are my job to manage and I don't welcome calls questioning the underwriting of a file, why we need the specific documents we need or asking questions about the credit or financial status of their child. This is confidential information, and can't be shared-even with a parent.
Could any important decision be made without input from:
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No, probably not. Of course your friends will be excited for you. Some may have their own ideas of what your new home will do for them-spare couch to crash on, party pad, etc. But the group of friends you will hear from the most once you decide to embark on the adventure of home ownership will be the ones who have just done the very same thing. They will want to share their war stories inspection advice, and newly minted negotiating skills. The information your friends have to impart may be more timely than what your parents can give you about the current state of the housing market but...
Just as no two snowflakes are the same, no two real estate transactions are exactly the same. I often have people ask me about the type of loan their buddy got wondering why theirs is different. What many people don't realize is that different types of mortgage loans have different types of requirements. So a person's credit history, assets, income etc. may play a large part in what type of loan they are using to finance the purchase. Likewise the success of the actual negotiation on price and terms with regard to the purchase is unique to each buyer and seller and their specific needs.
Then of course there are the random individuals you meet in the supermarket check out line, or at your son's soccer match who will decide that you need their advice such as the client I had in process who took it upon himself to advise another client of mine how to structure his loan.
Don't misunderstand-all these people have your best interests at heart. There is no doubt that they want you to have a good experience, get the best interest rate, and the house you want. But their experiences are colored by their own needs and specific situations, not yours. The best source of information about all things real estate is your real estate agent. If you want mortgage information your mortgage broker is the best one to provide it. Listen to the professionals and you will find yourself a happy home owner.
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