Are you being educated or sold in your real estate transaction?
When it comes to buying or selling a home, you are often facing the largest financial transaction of your life—and the biggest liability. We believe a transaction of this kind is not like buying a television or even a car (i.e. commodities), but rather a series of relationships that must move in harmony for the best possible result.
It's essential that the key figures in your transaction—your real estate agent and lender—be on your side. So how can you tell if they are in your corner, working to be keep you informed...or just making another sale?
A Tale of Two Realtors
You can tell a lot about a realtor's frame of mind by listening carefully to the way he or she answers your questions. Let’s imagine you ask the following:
What do you know about the neighborhood?
What’s your background?
What’s your marketing approach?
Do you have a team?
Who will I be communicating with?
Why are you the best person to represent me?
A realtor whose focus is on selling you will likely not answer your questions directly. Instead, they may draw attention to their status as "the #1 realtor in their area," their length of time in the business, or make vague statements about how much their clients love them.
Unfortunately for you, transaction volume tells you nothing about the quality and attention your transaction will receive. In fact, based on this answer, you have no idea.
Compare this approach to a realtor who directly addresses your questions and is honest about their past experience. They might say, “I’ve been in this neighborhood for 15 years, and I’ve represented 28% of all the sales in this neighborhood in the last 5 years. Not only am I getting an avg. return of 6.3% above the market average for my clients, but because of my marketing contacts, we will automatically put an ad in these 3 newspapers for you, and they’re going to get additional exposure in these different ways...”
Now we’re talking. The agent is sharing relevant specifics, and leading by educating, showing not only what his deals look like, but how they are executed—and what the tangible benefit is to you.
Lending An Ear
Everything that applies to the real estate side applies equally to the lending side.
If you’re interviewing a lender and he or she can only tout their position in the industry (“the top 1%!”), their length in business, or that they have the lowest rates in the county, then you can be sure you aren’t getting the personalized experience you deserve.
Here’s a little secret. Virtually all lenders in your area are going to have access to the same programs—but they will not all offer the same level of service and care in matching you with the best programs.
A good lender will work hard to get to know you, your circumstances, and your goals, so that everything can be taken into account. They will want to learn everything relevant about your finances: what kind of income you have (W-2? Self-employed?), what affects that income (commissions? bonuses?), and how the down payment is being composed (is a percentage of it a gift?).
They will want to learn about your short-term and long-term goals: are you a younger couple hoping to “size up” in 5 years, or is this your “forever home”? If you are sizing up, do you intend to rent or sell? If you are renting, are you prepared for the responsibility of being a landlord, and aware of the tax benefits that go along with it?
An astute lender will provide starkly different recommendations depending on how you answer these questions; it could mean the difference between a 5-year adjustable rate or a 30-year fixed mortgage.
A lackluster lender could steer you into a program that saddles you with unnecessary commitments and less-than-optimal rates that will inhibit your choices down the line.
You Deserve To Be Informed
Today’s marketplace is one of informed consumers. We believe that smart realtors and lenders are meeting this new marketplace by being as informative as possible, and seeking to educate and understand rather than seduce and sell. Isn’t that what you deserve?