This entry was posted on Tuesday, March 20th, 2007 at 4:56 am and is filed under Financing, Agents & Brokers, Lessons. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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March 20, 2007
I guarantee it, or most of your money back
Today brought another required class presented by the school’s mortgage broker partner. Most real estate agents and brokerages work with a specific mortgage loan officer who pays a kickback for referrals received. Often, when you approach a Real Estate agent as a buyer, there are three things they will attempt to accomplish with you as their new client.
1. Establish a relationship of trust by wowing you and proving they know their stuff.
2. Commit you to a contract, which will often lock you into paying them a commission regardless of how you find the home you buy over the next year.
3. Get you preapproved (and locked into using their mortgage broker…which means extra money for the agent, and possibly, a worse deal for you)
If you want to see your agent at his or her worse, tell them once they have finished their presentation, that you do not wish to sign a contract. If your agent blows up at you, imagine how things would have been had things started to go bad after you signed. Most agents will be kind but firmly insist you sign the contract before they can speak to you. They may even tell you it’s illegal for them to talk to you without one (have we been breaking the law for the last hour then?)
If you have some interest in using this agent (always remember that you’re welcome to shop around) then negotiate! Everything in real estate is negotiable. EVERYTHING. If your agent isn’t willing to be flexible on something so small as an agent agreement, how will act when it comes to negotiating other things such as sales price? Will they insist you offer more? If they won’t bend their best interests in order to get you as a client there is a good chance that once you are a client they’ll act the same.
I find it amusing that the agency where this school takes place has a handout addressing their mortgage loans with a “$500 low rate guarantee” which claims, among other things, that since they have the lowest rates you DON’T EVEN HAVE TO BOTHER SHOPPING AROUND. Convenient huh? I’ll give you the best deal, so don’t even bother talking to anyone else…otherwise I might have to pay up the $500. Which by the way they never do. These low rate guarantee programs are generally designed in such a way as to be impossibly hard to get, often requiring that you pay a non-refundable appraisal fee of $500-600 in order to qualify.
Getting back to today’s class, I arrived late just as the instructor was discussing a certificate he had already handed out. Thankfully, I manage to get my hands on a handout and sit down. I’m ready to learn about financing!
Surprisingly, this mortgage broker proved to be the most clear and consistent instructor I’ve seen so far. I’ll share what we learned in part 2 of this lesson.
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