Can your real estate agent also be your lender?
Legally? Yes, at least in California. But for me, that’s not the REAL question. The real question is “is it a good idea?”. I think the answer is a huge NO. Maybe even h-e double toothpicks NO!! And that’s probably 100% of the time. Unfortunately there is a built-in conflict of interest.
The REALTOR’s job, among other things is to manage or coordinate the entire transaction. And that includes referring buyers and sellers to people they need to work with during the transaction. This could be home inspectors, contractors, title/escrow, and lenders, to name a few. Part of this process would be keeping check on what your clients are paying for services so that you can make sure they’re not being taken advantage of.
When it comes to choosing a lender, your REALTOR is probably the best person to ask. He/she works with different lenders on a daily basis and know who’s reputable and who is not. Remember, bad news travels fast. Your agent knows who can get the job done and if their fees are in line. Just as a side note, it is very difficult to compare apples with apples with lenders because the names (of the fees) have been changed to protect the innocent, so-to-speak. Each lender/bank has a different name for their different fees from the next lender. I usually sit down with my buyers and lay all of the fees out in a graph-like format so they can understand the comparison and thus make an informed choice.
If your REALTOR is also the lender, there is no accountability. No checks and/or balances. I would like to believe that everyone in this world is honorable, but as evidenced by our current real estate market, there were a lot of bad loans made to a lot of good people. Everyone should do their own job and keep everyone else accountable for doing theirs.
Buying or selling a home is a huge task. It takes a village to get an escrow closed. It’s a lot of people working very hard and aiming for the same goal. I could tell lots of horror stories but all I really need to say is: Keep your REALTOR and lender separate. See how simple that was.
More tips later.
Happy House Buying…or Selling
Wallace…
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I found your blog on MSN Search. Nice writing. I will check back to read more.
Eric Hundin