Years ago the Atlanta real estate agents more often than not was the first point of contact with a home buyer. More often than not, potential buyers would walk into the Atlanta real estate office, and tell you they were thinking of buying a home, and wanted to know how to begin the process. We'd sit down, and listen to their needs, and then take out a worksheet and ask them some preliminary financial questions, to get a vague idea of what they could afford to buy. At that time, we'd pick out a few homes in their price range and see if that me their needs, and then give them the names of several mortgage persons to further qualify them. Today, it is very different. The Internet has changed all the rules, and home buying has become very dysfunctional. It is no longer written in stone that the Atlanta real estate agents is the first point of contact with a potential buyer any longer. Many buyers find their homes through their mortgage lender.
Home buyers find lenders on-line under various web searches. Sometimes the hook is "FREE, NO MONEY DOWN!" "Credit repair" and yes, even "Win a free Vacation!" I've heard them all! Some of these buyers are scammed by fly by night fraudsters that get the buyers involved in the wrong deals. Inflated home values, and bait and switch loans at the closing table! Scams, real estate fraud, mortgage fraud, straw buyers and illegal kickbacks and yes even predatory loans. I can say this because over the years we've generated so many countless Internet leads. It is interesting what you find out when you engage in conversation with buyers. Many will tell us that they cannot work with us because they will be assigned an agent from their lender. To me that is red flag #1. Another is that if you went a little deeper in conversation, several buyers wanted to work with us, but also asked if we would do the same thing their lender and agents were doing. When you ask the caller what is that? The reply is kicking back 25K at closing! As soon as you say that is illegal, the phone call would end. I cannot help buy wonder how much of the real estate grief today was caused by true loan fraud! It is just too convenient for an agent or a lender to provide the client with all services, including inspections. It is sort of like being painted into a corner with a flamethrower. It's probably not a good position to be in.
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Home buyers should be able to work with any agent they choose
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Home buyers should be able to shop for the best mortgages
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Homebuyers should be able to choose the lender they want to work with
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Home buyers should be able to choose to pick their own home inspectors
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Home buyers hould never feel pressured to use any one particular, agent, lender, home inspector....
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Well Jim for awhile maybe they will come back since the no money down plans have gone bye bye.
I had a different situation--listed a property with a few buyers listed as exclusions as they had been through the house with the seller before. One buyer liked it and the seller told her to get her financing then to call back. I accepted that she could be the buyer. When seller then saw buyer & asked if she was interested, buyer said YES and my lender says I cannot buy the house without an agent, so his guy is writing up the offer. This guy never even showed her the house. Seller told her that's fine but he won't pay her agent's commission--she can pay him. Agent had a fit. He called to put in the offer, and stated he would be paid by seller or the guy would never sell the house. He put in his offer--at a HIGHER commission than I was publishing in the MLS. A higher, cleaner offer came in. Seller accepted OTHER offer and buyer's agent was ticked off. This is a guy who (1) lender assigned as the agent (2) he never did a lick of work for her except write up the offer (3) was trying to negotiate his commission/arguing that he'd get paid before he even wrote the offer up! The lender and this agent must have had a good partnership going...
Larry Story Real Estate Broker, Greensboro, NC (Coldwell Banker Triad of Greensboro) So true!
I have seen these groups put these home buying seminars together and try to keep their deals in house. In our area some of them are " all working together" in the same company and splitting the money.
Realty Executives - Erica Ramus - 570 622 6006 - Schuylkill That is illegal in Georgia and I assume in most states.
Audrey June-Forshey, GRI, Gaithersburg, MD (RE/MAX Realty Group) It all better be disclosed in writing under RESPA! Affiliated Business Arrangements etc...the buyer better know what is really going on!
Hi Jim. Interesting post. Perhaps the silver lining to the times we are going through is the increased scrutiny and washing out of some of these "groups." Good luck! Aaron
choice is king
chris the implementer
It's a darn shame that buyers are still being duped. Obviously "his" agent won't say a word about his outrageous fees on the HUD1.
Talk about the dog wagging the tail! The proper way to handle this is exactly what you were doing... Interview the buyer and then recommend 2 or 3 of the best loan officers you know and let the buyer choose.
No buyer should ever be coerced into using any particular vendor.
Aaron Cullen : Folsom + El Dorado Hills + Sacramento Area, CA Real Estate (Brokers Inc.) Sometimes hard times brings out more of these companies. I remember one in Virginia years ago that I had turned in. They were taking advantage of WRAP loans back in the 1980's.
Chris Brown - Orlando Mortgage Pro | Orlando Credit Repair (Orlando Mortgage Pro dot com) Choice is King!
Ellie McIntire Real Estate in Howard County Maryland (The McIntire Team of Long & Foster) I am certain you are correct.
Sherry Lee Cox, REALTOR/Broker, Paso Robles Home & Ranch Specialist... (Keller Williams Realty North County) I have a vendor list with many great folks on it. I also tell the buyers that use whomever your want. Make sure they are full time, offer you references and deliver what they promise!
JIM, I love the call you get from the relocation company letting you know that if you want to continue working with this buyer you have to give them 35%.
So where did you get your cute signature?
Marchel Peterson Spring TX Real Estate E-Pro ABR (Results Realty) I just posted it on a new blog!
http://www.textgifs.com/onlinegifs/onlinegifsmain.shtml
Jim,
That same lender will also want to order title : )
Is a joke what is out there sometimes !!!!! Is amazing that the consumer also can get lulled into it. Reallly, at the end of the day, it all starts with the realtor being the QB... sometimes the leads from a mortgage company are legit with referrals and the like, but being assigned, rebates... all that are super red flags ! Perhaps also the "lead" cannot get a mortgage anyway !
Christopher and Stephanie Somers - Realtors - Philadelphia Real Estate (RE/MAX Affiliates) I bet any money they all got mortgages.
Jim,
I'm sure you intended to include title compnies or I'd feel slighted!! Thanks, Fran
Fran 'The Title Man' Gaspari Title Insurance-PA & NJ (Patriot Land Transfer, Inc.) Fran I respect you! LOL!