Jay Thompson recently wrote about a real estate agent doing double duty as a loan officer on the same transaction. It seems to have garnered quite some buzz. I know real estate agents should be very well educated when it comes to home financing, but it would be hard to wear both hats. It’s better to specialize in one and not have to worry about the other. How about lenders wanting to cross over?
I will say that when we deal with for sale by owners or sellers without agents, we lenders can be forced into a situation where those whom we are arranging the loan for do need some real estate advice. I do not give any real estate advice under any circumstances. However, in the past year I’ve had to deal with several borrowers not using agents for various reasons. A lot of these cases have also involved first time home buyers.
So, in these cases I’ve had to help with setting up escrow, explaining the ten day inspection period, providing referrals for a good home inspector etc. I don’t advise on anything to put on the contract and absolutely do not even suggest anything. I only provide what is really just commonly available information which the borrower could obtain from other sources with a little bit of effort. It has helped that I’ve worked with fantastic escrow officers on these transactions.
I certainly always recommend that they obtain representation especially when they are first time home buyers. There is no reason why a buyer shouldn’t! However, often times it is because the seller doesn’t want to deal with an agent on either end, so the buyer is forced into an uncomfortable situation especially when they really love the house. In the past few cases things have worked out really well. I’d hate to imagine what it would be like if things had gotten ugly. Thank goodness I only deal with mortgages.
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on Jul 24th, 2007 at 5:28 pm
Nice to hear about this subject from the lender’s side. It’s just too hard to wear two hats, as you said, and the chance of a conflict of interest is always there. Best for the client to focus on one aspect of the transaction and serve that well.
on Jul 24th, 2007 at 8:02 pm
Teri,
Thanks for stopping by - being good at what you do will take you a long ways.
Shailesh
on Aug 1st, 2007 at 10:15 pm
Shailesh
I’m not a fan of double-duty in this field - more doors open for abuse and fraud. Skill is another matter entirely.
I sat in a Realtor’s office today as he began the task of guiding an out of state client - one we share - to his best half-dozen home possibilities. He was excellent and was serving his client so well - much better than I could have done. But when we discussed the Mortgage side of the deal (and the Realtor was well-schooled on the subject), what I did best shone through to the Realtor’s equal amazement.
Result - respect for each other and a client who will be well taken care of by two professionals worthy of the title. Had we tried to double-dip, we all would have suffered.
I like things separate. Better service- cleaner transactions. Thanks.
on Aug 2nd, 2007 at 2:02 pm
Art,
You make a very good point with a very good example.
Thanks for stopping by!
Shailesh