What comes first, a lender or real estate agent? That’s a common question and the answer is easy: a lender! Of course, that begs the question: How do I find a mortgage lender? If you have a real estate agent he or she will be happy to refer you to a lender that is well-versed in the type of loan program you're pursuing.
Does the agent get a kick-back for referring a lender?
The answer is no, because this is not in sync with the Real Estate Settlement Procedures Act, or RESPA for short. An agent cannot take any type of compensation for referring a potential client to them. This doesn't just mean monetary compensation, but anything of value.
Why should a buyer take an agent’s recommendation?
Don't rely only on the agent's recommendation, but do give it credence. Most experienced real estate agents seek to streamline their clients' transactions. After all, the more efficient all parties to the transaction are, the better the likelihood the sale will go through.
We work with lenders every day during the course of our business and know which ones are the best with certain programs, which are the most diligent and efficient and which truly care about their clients. And there is something to be said for working with an agent and lender who are accustomed to working with one another - sort of the well-oiled-machine type of teamwork occurs.
On your own, with no experience finding a lender, finding a good one is like finding a good car mechanic -- frustrating and often futile. I often counsel my clients to ask around, to family, friends and co-workers. Who did they work with to get their mortgages and would they recommend that person? Then, ask me. I am happy to throw another name or two into the hat so that you have several to speak with and to compare quotes from. Before you know it, you'll be proudly waving around your loan pre-approval letter and we'll be looking at the amazing homes for sale in Madison!
Posted by Jolenta Averill on