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Andrea, Home Buyer in Glendale, AZ

Do all real estate agents work with all lenders or is there a specific bond between lenders and agents?

Asked by Andrea, Glendale, AZ Tue May 27, 2008

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Hello Andrea. I think we all have loan agents that we prefer because they have done a good job for us in the past, but as Jeffrey pointed out, RESPA prohibits arrangements between real estate agents and lenders or anyone else who provides services in the context of buying real estate that's governed by RESPA (that would include pest inspectors, home inspectors, title companies etc.). We cannot derive a benefit from the business relationship that we have established which means that any referrals cannot be conditioned up receiving something in return other than excellent service of course. Obviously, when you have worked with a particular loan agent many times and the loan agent has done a good job for your clients, you'll prefer working with this agent over an agent whom you may not know at all. It's just like you'd probably rather go to a dentist that was recommended to you by a friend or family member than a dentist that does not come with a recommendation from a trusted source. I hope this helps.
0 votes Thank Flag Link Tue May 27, 2008
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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I prefer some over others because they get the job done with out adding problems. Most of it has to do with my own standard of client care.
The bond happens as you fiind people that take care of their clients as you would.
0 votes Thank Flag Link Tue May 27, 2008
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
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Some agents only use a specific lender while others have no loyalties. You just need to ask if you have a concern.
Web Reference: http://getprequalified.com
0 votes Thank Flag Link Tue May 27, 2008
In some cases, there may be a more formal relationship between a lender and a real estate firm. I'm with a firm that encourages its agents to use a specific lender. The lender's very good, and has very competitive rates. However, even in this case, buyers can use whoever they want. And, honestly, that's fine, just so long as whoever the lender is is competent and can the loan to close. The thing that worries many Realtors is when a client says, "Well, I've decided to go with this online company because they're offering an eighth of a point less." Agents just want the loan to close (certainly with financing that works best for the buyer), so most know (and refer buyers to) lenders who are professional and competent.

Hope that helps.
0 votes Thank Flag Link Tue May 27, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Andrea,

The Real Estate Settlement Procedures Act (a.k.a., RESPA) has specific prohibitions about money changing hands between parties to a transaction, like between a realtor and a loan company, for residential transactions. The intent is to keep kickbacks from occuring that would "tie" a realtor to a lender. So, technically speaking, there should be no direct financial incentive for a realtor to be "bonded" to a specific lender.

That said, Charles is correct, we as realtors, would like to have a degree of trust in the relationships that we have when helping buyers and sellers in a real estate transaction. Having a number of lenders that we can recommend, who will compete for your business, is just prudent business practice.

But as Charles also pointed out, not only are you free to use any lender, because you probably don't know that much about your agent other than what you've learned in the short time you've had them representing you, you should also (must!) get competitive quotes from lenders we have not recommended. It really is the only way to know that the ones your realtor has recommended, are competitive.

If you find 1 lender on your own that seems to beat the pants off everyone else's offer, look at that particular lender with a bit of skepticism. If you're doing a good job at comparing offerings, there won't be whopping difference between any of them, if there is, something's probably not right. In the end, if one of the lenders that your agent recommended is competitive, strongly consider going with that lender as the trust that your realtor has established will probably go a long way to a smooth transaction.

Good luck!

Jeffrey
0 votes Thank Flag Link Tue May 27, 2008
Andrea,
We can work with all lenders, but just like you would want to work with someone you know and trust, I do the same thing. Building a good relationship with a lender(s) is one thing thing that all Realtors must do. You want to have a couple of lenders that you know will meet the needs of your clients. You have lenders that specialize in residential or commercial and one may have a program that another doesn't, so you search for the one that will best suit your clients needs. You of course have the right to use any lender that you like.
I hope that this helps.

Charles
0 votes Thank Flag Link Tue May 27, 2008
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