As you begin your house hunt, you may wonder if you should speak with an agent or a lender first. The truth is that there isn't a clear right or wrong answer.

To enlighten you on this matter, we gathered feedback from brokers and lenders so you can determine whether you should work with an agent first or a lender.

Should You Talk To A Lender Or A Real Estate Agent?

Before making an offer, you've probably worked with a lender, a real estate agent, or both.

That said, choosing which one to work with should be a priority before starting the home-buying process, after determining whether you're ready to buy a property and estimating how much you can afford to spend on a mortgage.

Pros And Cons Of Working With A Real Estate Agent

Working with an agent is ideal but not required; basically, this depends on your goals.

According to Micah Harper, a real estate broker from San Antonio, it is best to contact an agent as early as possible in your home-buying process.

"There's a lot of information an agent can give that can short-circuit things that are not true," said Harper.

Even when they're just dreaming about owning a home, an agent can help them. However, there may also be drawbacks to consider.

Pro: Orientation from the start

To get a comprehensive sense of the market's health in their area, real estate brokers conduct a ton of research and legwork. Based on your preferences, they will share this knowledge with you.

For instance, you will log into RE/MAX Advanced Realty and search for homes in Indiana, USA. You may filter these properties based on your maximum price, square footage, and other requirements.

Now, let's pretend you found a potential home.

Is its price normal in the neighborhood?

Do you need to negotiate to get the home or is the housing market slow in your area?

Is it possible to find a home in this neighborhood that has the specific features you want?

An agent, who is well-versed in the market, may assist you in determining whether a bargain is good or not, particularly when it comes to offer discussions. They can also recommend properties that meet your requirements, saving you hours of searching.

Pro: Networks

Alright, so you've already located a real estate agent that you click with. You are now prepared to apply for a loan and be pre-approved. Here, real estate professionals can assist in explaining the process of locating and choosing a lender.

According to Christie Cannon, a real estate agent with Keller Williams in Frisco, Texas's The Cannon Team:

"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."   

Agents are very knowledgeable about the lenders you have options from because they have extensive experience in their industry and are well-versed in their local market. They can point you toward people with whom they have had good luck as well as those who could best fit your objectives.

An additional benefit is that if an agent is prepared to suggest a lender, it's often a sign that they get along well and will be a great team. The more effectively they work together, the more an open exchange of information will benefit you.

Con: Delaying the dream

After meeting with a few agents, you selected the one you felt most comfortable with, someone you could trust to look out for your best interests and arrange for you to see some amazing properties.

Imagine this: for a few weeks now, you have been touring different Indiana residences. You even discovered a house you would be glad to call home, and you provided your agent with your best estimate of your budget. Exciting, right?

When you eventually get to see a lender, you find out that every house you've seen is above your means. Now, remember that it is only the lender who has the authority to know anything about your money, not the agent.

Furthermore, it might be difficult to consider the types of homes you have to pick from if you don't know how many houses you can afford early in the process.

Ideally, for your efforts to not go to waste, you should know how much you're pre-approved for before going house hunting. That is why some agents will need verification that a buyer has been pre-approved before working with them.

Pros And Cons Of Working With A Real Estate Agent

Here's the thing: you can talk to a lender first even if you don't have your desired home yet. According to a Zillow Home Loans home loan officer, Quinn Bassler, instead of learning everything as they go along, it is crucial for homebuyers to educate themselves about the process of purchasing a property. They can accomplish this by speaking with a loan officer.

Pro: Relatively stable numbers

Imagine this: you found the home of your dreams and you're more than ready to take action. However, you got terrible news saying that you're not qualified for a mortgage.

This is when working with a lender first becomes beneficial. Contacting a loan provider to see if you qualify or are pre-approved (there are differences) for a house loan helps in many ways. For instance, it helps determine your budget so you can make better decisions about the kind of properties to look for.

Additionally, a lender can guide and explain to you how changing mortgage rates can impact your budget both now and in the future when buying a property. This lessens the hurt and may even help you avoid it completely.

Pro: No time constraint

Let's say you found the house you like, and someone else is eyeing it, too. One advantage you can have over them when you already received pre-approval is that you have a higher chance of acquiring the place.

In a more competitive housing market, including a pre-approval letter with your offer will differentiate you from the competitors and speed up the transaction. You're closing on your well-earned reward when other homebuyers are still searching for a lender. Furthermore, bear in mind that a lot of house tours take place on weekends, and if you need to get preapproved on the day of the tour, it's normally simpler to acquire a prompt response from a lender throughout the week.

Con: Expiration

The thing is, pre-approval is only temporary. Normally, it's only valid for thirty to ninety days following the issuance before it expires. This helps lenders guarantee that there hasn't been any significant change in your financial status between the pre-approval and offer stages. 

As a buyer, this is a drawback since it can put pressure on finding the right home and making an offer.

For some real estate agents, it's not a problem if the buyer isn't pre-approved, which gives buyers more time to find the home they truly like.

Do Real Estate Agents And Loan Officers Work Together?

The foundation of the connection between loan officers and real estate brokers is cooperation and support for one another. When a client wants to purchase a property, real estate agents frequently serve as their initial point of contact, and they depend on loan officers to offer financing choices.

If the homebuyer gets pre-approval, the agent can then help them find a home that suits their needs as well as their budget. Once they find a home they are willing to buy, the real estate agent will collaborate with the loan officer in making an offer which includes their financing details.

Afterward, the role of the lender is to give constant updates about the loan application while the real estate agent will continue working with the homebuyer and other parties involved.

Together, loan officers and real estate agents may give their clients a smooth homebuying experience and create a fruitful working relationship that may result in future business opportunities and referrals.