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Asked by Brent Bester, Columbus, OH Sat May 17, 2008

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14
Bruce McKinn…, Agent, Mukilteo, WA
Sat May 17, 2008
BEST ANSWER
Curiosity killed the cat. But, good point Brent. If you look at the real estate industry, about 50% of the agents out there have less than 2 years of college -- 40% (at least) are part time. While numbers may fluctuate between brokerages, areas and Associations, the turnover rate in our industry runs between 50% and 60% before a new agent reaches their 2nd year anniversary (before they re-new their license). It is claimed that 70% of all agents have come and gone by their 4th year. One wonders how one can be an expert in anything within that framework. However, one quickly learns in real estate through sales (or sales failures)! To say it another way, it soon becomes obvious to a Realtor just how important it is (for their client’s sake) to attempt to control real estate transactions -- by involving the RIGHT people – when possible (e.g., loan officers, title & escrow agents, inspectors). . People with years of experience -- people you can trust. I have been using the same people (in these categories -- not part of my brokerage) because they deliver. I have NEVER lost a transaction when they have been involved -- not because I am perfect (hardly), but because I have chosen to surround myself with great people. And, I don't get a nickel from those referrals. What I DO get is the satisfaction of knowing that my clients have gotten superior service. And, the transaction closes. THAT is worth a fortune. The only transaction failures I have had involve cases where my clients have insisted on using a friend, relative or who knows what. And I am guessing I am not alone. I am sure you see the same thing in the real estate industry.

Now Brent, how does your industry compare in expertise? What is the education level? Do you always use the same underwriter (or, do you have no choice or rely on your underwriting software)? Are all underwriters the same? Do the people who assist you with your client's loan process make a difference -- for you and your clients? The answer to some questions can often be more complex then it appears on the surface. Something about which the general public has absolutely no inkling. The PROBLEM YOU HAVE CORRECTLY IDENTIFIED (agents claiming expertise out of their element) can especially be the case when a Realtor watches a perfectly good real estate transaction FAIL because of a lack of expertise on the part of a loan officer. When that happens about 5 times, many agents jump in to control the transaction.

So Brent, how many times would YOU allow yourself (and your clients) to get burned? In my case, after two years of frustration with someone else’s loan officer PICKs, I spoke with other seasoned agents and interviewed 5 different loan officers before selecting the person to whom I would begin to make my mortgage referrals. My frustrations led to a loan officer who I know believe is great -- a person to whom I could send my clients with faith that they will be treated with respect and counseled to select the best loan for their financial circumstances at a competitive rate. A person of integrity. Someone I have come to believe (after 7 years) may be one of the best in the business. This is the individual I used for the loan on my current home and to whom I try HARD to get all my buyer clients to go for their financing needs. While I feel I may have a higher level of expertise in financing then many agents, I am a Realtor, not a loan officer. I want my clients to have the best.

The DIRECT answer to your question is that I would not see a Pediatrician to have my gallbladder removed. I agree with your implied answer – but the answer is not a simple one. Also, you asked an ”open ended” question. How long have you been in the business? Any thoughts?

PS. Only 56% of licensed real estate agents are Realtors (at least in Washington State). Those who are not Realtors (46%) do NOT pay dues to the National Association of Realtors. Consequently, they are NOT held to the standard of the NAR Code of Ethics. Not all real estate agents are equal.
5 votes
John the Bru…, Home Buyer, Connecticut
Sat May 17, 2008
Hahah! Hold on while I get the popcorn. This is going to be good.
3 votes
Linda Carroll…, , Lacey, WA
Sun May 18, 2008
What a good question! I have a segue to that...why do so many mortgage professionals try to make us experts in finance?? I am so frustated with lenders and originators who provide classes or seminars or come to our meetings, then teach us to access client's credit, estimate their credit scores, or decide what the client can afford! THAT IS NOT MY JOB & I DON'T WANT IT TO BE!

I want to work with a lender whom I can trust to be thorough, accurate, timely, a good communicator. I do have a fiduciary responsibility to my client to take reasonable care that they are not getting cheated by an unscupulous lender, to make sure that they have a Good Faith Estimate, and that they know what their monthly payments are and that they feel confident with them.

I'm also frustrated that many lenders don't seem to CARE that I need to know how to structure the client's financing addendum BEFORE I write the offer and BEFORE they sign the contract. Our MLS has very specific language regarding down payments, loan types, financing timelines, and letters of loan commitment.

I have had lenders who think they can tell me how to do my job in finding homes, or executing contracts. They usually aren't part of a smooth transaction or a good experience for my client.

I like your position, Brent. If you ever work in Western Washington State, please give me a call!

Best wishes, Linda

Whew! I guess I took this chance to vent one of my pet frustrations.
1 vote
Debt Free Da…, , 85260
Sun May 18, 2008
I'm a Realtor and a mortgage guy. It give me an incredible body of knowledge to work with. Becoming knowledgeable in both areas will make your service invaluable.
Web Reference:  http://getprequalified.com
1 vote
Sylvia Barry,…, Agent, Marin, CA
Sun May 18, 2008
Hi Brent:

In my company, we have an in-house mortgage broker in every office (who we are NOT required to use), but the mortgage broker will participate in our weekly meeting and give us an update on what's happening in the lending industry. At times, she will email us articles and rates to let us know major developments.

Our company does not allow Realtors to also provide mortgages because there will be a confliect of interest. However, we are encouraged to be knowledgable about what is going on in the mortgage industry so we can be knowledgable to a certain degree to talk to our clients. We ALWAYS ask our clients to talk to a mortgage professional for pre-approval (and will refer a few when asked) before showing them houses.

I agree, I don't think we can be expert in both and especially with how the lender's tightning their lending practices and rules changes all the time, it is extremently important that the clients get expert advise when talking mortgages, it can make or kill a deal!

Sylvia
1 vote
Jeffrey Schn…, Agent, Austin, TX
Sat May 17, 2008
Brent,

From my experience, the responses you're speaking of fall into 3 categories. 1 - Realtors who are also mortgage brokers (seems pretty common in Texas), 2 - Realtors who stay abreast of current rates, programs and offerings so that they can set expectations for their clients, and 3 - idiots who don't know what they are talking about.

You don't have to be licensed in the state of Texas to discuss current rates, fee structures, programs, etc. And it's pretty easy, for those not in category 3, to stay abreast of the lending market so that you can help your clients understand the boundaries they should be working within.

I try as much as possible not to ever step into category 3, no amount of makeup, fancy dress, or fast talking can change the outcome.

See ya,

Jeffrey
1 vote
Stephanie Kr…, , Henderson County, NC
Sat May 17, 2008
Most real estate brokers, as myself, are not attorneys, not CPA's, and not mortgage brokers. We are taught the basics in our classes to become a real estate broker, but are taught to be careful and that most often, the best answer is to have the client speak with a mortgage professional. Our Keller Williams office in Hendersonville has a mortgage professional in house which makes our job a lot easier!

Steph :)
Web Reference:  http://www.wnchomepro.com
1 vote
Brent Bester, , Columbus, OH
Mon May 19, 2008
Thanks again! keep them comming would love to her more!
0 votes
J R, , New York, NY
Mon May 19, 2008
What a good question! I have a segue to that...why do so many mortgage professionals try to make us experts in finance?? I am so frustated with lenders and originators who provide classes or seminars or come to our meetings, then teach us to access client's credit, estimate their credit scores, or decide what the client can afford! THAT IS NOT MY JOB & I DON'T WANT IT TO BE!
~~~~~~~~~~~~
Good point, Linda, my favorite was a seminar on 1031 exchanges which ended with "you should have them direct all inquiries to their accountant". Why did I just sit here for 3 and a half hours? :)
0 votes
Brent Bester, , Columbus, OH
Sun May 18, 2008
Thanks! I agree with most of the comments!
0 votes
J R, , New York, NY
Sun May 18, 2008
Brent, rather than ask how many realtors are also experts on finance, a better question (judging from some of the "debates" on Trulia) is "how many members of the public who have no experience in either real estate or finance think they are experts on both?".
0 votes
Brent Bester, , Columbus, OH
Sun May 18, 2008
Some thoughtful answers! thanks, I apperciate them. Im not frustrated at all, Ive just always been curious of this since I have been financing homes. I've seen few realtors almost "act" the part of the loan officer, and I could almost sense they were looking for some control over the financing, maybe as reassurance for themselves that the deal is going to fly. I just found it somewhat ironic because I never give my clients any kind of buying or selling advice whatsoever. That's simply not my cup of tea!

Thanks,

Brent
0 votes
Chad, , Tacoma, WA
Sat May 17, 2008
Hmmm, I sense frustration.

I am not a mortgage broker or an agent. But I am very involved in both due to my career as a condo conversion, "KING" ok self proclaimed. I guess it is the great part of America that the harder you work the better you willl be in your industry.

I can see the frustration that you may have as a mortgage broker or even as an agent. I find that I sell the most real estate and close more deals than any agent. I am guilty of giving approximations of cost and always recommend for the buyer to get professional advise. I have lost many sales due to the lack of drive from mtg brokers especially in this market. Just the same as I lost a bunch of sales to bad realtors.

I feel that a realtor probably should educate and help the buyer as to incentives such as FHA, VA and other possible incentives that may be a part of the "sale". And I am big on disclaimers such as OAC. I hear the interests rates on the news weekly, I guesss to sum it all up. All our careers overlap and sometimes there is not a clear distinction of where to bow out. Especially when a buyer usually has a relationship based on trust with their agent. These purchases are huge and when a buyer nervously asks a realtor what is my monthly mortgage gonna be... What should he say.
0 votes
Artur Urbans…, Agent, Burlingame, CA
Sat May 17, 2008
Brent,
During the pick of the dot.com period, I think in 1999, someone made a prediction that in 5 years all real estate agents will be also financial experts. It didn't happen. However, in some eyes the real estate agents job devalued, as many clients do search and viewing of homes themselves leaving agents only "the closing part", I can see that more and more agents will want to demonstrate skills beyond just "closing transactions" in the future. Mortgage planning and financial analysis (please note that I have not used term financial planning" are one of options which I think will be widely embraced by many agents in the future. So, you might want to brush up on the real estate expertise as well to put yourself ahead of the pack (just joking).
Web Reference:  http://www.cimpler.com
0 votes
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