We’ve asked both to share the pros and cons of talking to one before the other.
As you begin your home search, you may ask yourself: should I talk to an agent, or a lender first? The truth is there’s not really a right or a wrong answer. We spoke to some agents and lenders to get their thoughts and help you weigh the pros and cons of each option.
When should I start talking with an agent or a lender?
Ideally, you will have committed to a lender or an agent (maybe even both) well before you make an offer on a house. Making this decision should be one of the earliest steps in your home-buying process, after deciding whether you’re ready to buy and getting a general idea of how much you can afford to spend on a mortgage. If you’re trying to figure that second part out, try our Affordability Calculator; it’ll do the math for you.
Once you’ve decided on those two things, it’s time to find… a mortgage lender? A real estate agent? Let’s help you decide.
Pros and cons of finding an agent first
Teaming up with an agent first may work for you depending on your goals, but it is not mandatory. Micah Harper is a real estate broker with Exquisite Properties in San Antonio. A broker is similar to an agent, but there are differences in what they can do for you — and he said the sooner in your home-shopping journey you can get in touch with an agent, the better.
“The earlier a buyer reaches out to an agent, even if they’re just dreaming about owning a home one day, there’s a lot of information an agent can give that can short-circuit things that are not true,” Harper said.
So dispelling myths is one plus. However, there can be downsides to reaching out to an agent before you’ve started the pre-approval process for a home loan. Weigh the pros and cons for yourself.
Pro: Orientation from the start
Real estate agents do tons of leg-work and research to build a clear picture of what the market is like in their area, and then they pass on that knowledge to you based on what you want.
Let’s say you’ve decided to buy a home in Cityville, USA. You open the Zillow® app and search for homes, using some of the many filters to set your maximum desired price, square footage, and more. Several homes pop up. But you’re wondering, are these home prices typical for the area? Should you be prepared to put up a fight for every house you’re interested in, or is the market here slow? Is it even possible to find a three-bedroom house with a finished basement in this neighborhood? An agent can help advise you on what’s a good deal or not, especially when it comes to offer negotiations, since they know the market so well. They can also make suggestions on homes that fit your criteria, so you don’t have to stay up scrolling for hours.
Pro: Connections, connections, connections
Okay, you found a real estate agent first, and they’re a great fit. Now, you’re ready to get pre-approved for a loan. Christie Cannon, a real estate agent with The Cannon Team at Keller Williams in Frisco, Texas, said this is where agents can help explain what finding and selecting a lender entails.
“We believe an agent can provide the tools and strategies for a well-rounded experience ensuring the buyer is connected with the right resources to provide every buyer the best opportunity when buying a home,” Cannon said. “This way, first-time buyers are in the know, excited and prepared for every step of the adventure, including understanding exactly what the lender expects from them. It’s all about making the path to homeownership as delightful and smooth as possible!”
Because agents are so experienced in their field and know so much about their market, they also know plenty about the lenders you can choose from. They can direct you to some that they have had positive experiences with, and to those that may match your goals the best. And another plus: if an agent is willing to recommend a lender, that likely means they have a good relationship with each other, and they’ll work very well together. The better their collaboration, the more you will benefit from a free flow of information.
Con: Delaying the dream
You’ve met with several agents and chose the one who you clicked with the best, who you trust will work in your best interests and get you some awesome homes to tour.
You’ve been looking at various homes in Cityville for a couple of weeks. You gave your agent your best estimate of your budget, and you even found a house you’d be more than happy to call home. Great! Then, you finally meet with a lender and learn that every home you’ve looked at is actually way out of budget. Remember, an agent’s role is not to know everything about your finances; that’s the lender’s job.
Plus, if you don’t know how much house you can afford early in the process, it’s tough to think of the kinds of homes you have to choose from. One of the more fun aspects of home buying is touring homes and imagining your life there. And if you have an agent first, sure, they may find houses for you, but it may be all for naught. Going house shopping before you know how much you are pre-approved for can be a major waste of everyone’s time. Some agents will ask to see that a buyer has been pre-approved before working with them, for this very reason.
Pros and cons of finding a lender first
Let’s get one thing straight: you do not need to find your desired home before you reach out to a lender. That’s a pretty common misconception that many lenders hear from home buyers. Quinn Bassler, a home loan officer with Zillow Home Loans℠, said it is super important for home buyers to get educated on how to buy a home as opposed to learning it all as they go — and they can do this by talking to a loan officer.
“Lenders play an integral role in the home buying process,” Bassler said. “From educating the borrower about the home buying process and what goes into it, to qualifying them for a loan for their future residence.”
There are upsides to going this route, but we’ll let you decide if it makes sense for your journey.
Pro: Solid numbers
It’s happened! You’ve found the perfect home for you, and you are ready to strike. Then, when you go to qualify for a mortgage, you get some bad news: it is out of your budget. Heartbreak.
When you get a lender, arguably the biggest reason is to get pre-qualified or pre-approved (there are differences) for a home loan. This gives you a pretty clear idea of your budget, which then gives you better guidelines for which homes to shop for. A lender can also help you navigate and understand how volatile mortgage rates could affect your home-buying budget now and down the road. This helps you cut down on the heartbreak, and possibly avoid it altogether.
Pro: Freedom of speed
So you’ve found The One: the home you want to spend years of your life in. Ah, but someone else sees themselves doing the same, in this very same home. Fortunately for you, you have a leg up: you’ve been pre-approved for your loan and they have not.
Presenting a pre-approval letter along with your offer will make you stand out among the rest in a more competitive housing market, and move you through the process faster. While your fellow home buyers are still working to find a lender, you are closing on your well-earned prize. Plus, keep in mind that many home tours happen over the weekend, and it’s usually easier to get a quick response from a lender during the week, in case you need to get preapproved the day you tour.
Con: The countdown has begun
You’ve found your future abode in Cityville, USA! And you’re feeling good because you’re pre-approved. You’re under budget. You are living the dream. You’re waiting to hear back on your offer, and… you’ve been denied. Not because your offer wasn’t good enough; it’s because your pre-approval has expired.
Home loan pre-approvals don’t last forever. Most lenders will include an expiration date anywhere from 30 to 90 days after its issuance. This helps lenders ensure your financial situation has not changed much between time of pre-approval and making an offer. Unfortunately, this can result in feeling pressured to find the perfect (or close enough) home and needing to make an offer faster. That being said, if you’re approaching your pre-approval’s end, many lenders like Zillow Home Loans make it pretty easy to renew.
Some agents are OK meeting with buyers before they’re pre-approved, and doing so can prepare you for more serious shopping, and hopefully you won’t find a home you really like in that time.
How do agents and lenders work together?
Harper, the broker from earlier, puts it simply.
“I can slay the dragon, but I can’t pay for it for you,” he said. “I’m your champion, I’m your realtor, I’m going to negotiate and do all those things, but when it comes to writing a check and paying for it, that’s the lender’s job.”
Ultimately, you will end up using both a lender and an agent, and they’ll both be an integral part of your team. Harper advises shoppers not to keep these people siloed, as constant communication could help you make better-informed decisions. Bassler, the lender from earlier, had similar advice.
“[Agents and lenders] need to be in direct communication in order to win in a competitive market,” he said. “It is super important that the buyer’s agent and the lender are on the same page and are in constant communication as well so no one is left in the dark.”
Now that you feel better informed and ready to take your next step, Zillow Home Loans* has your back, and with our partner agents who are ready to help you find and buy your dream home.
If you decide finding a lender first would be your way to go, Zillow Home Loans* has top-rated, knowledgeable loan officers who are ready to help you with the pre-approval process and provide expert guidance for your unique situation, every step of the mortgage process.
And if you’d prefer to find an agent before you go any further, Zillow’s directory of local real estate agents and brokers connects you with professionals who can help meet your needs. Our directory lets you explore and compare real estate agents, read reviews, check an agent’s current listings and past sales, and contact agents directly from their profile pages on Zillow.
Happy house hunting!