Mortgage loan officers and real estate agents: how they work together
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For home buyers, the journey begins in a logical place: they start looking at homes. But really, they should first start looking for money.
According to Home Mortgage Disclosure Act data compiled by LendingPatterns.com, less than 10% of buyers who got a mortgage in 2014 had pre-approvals. Yet, most tell you they prefer when buyers have that financial blessing in hand. They want to know their buyers can actually afford the homes theyâre looking at.
To that end, the real estate agents often refer their clients to loan officers for mortgage help.
The Real Estate Settlement Act, or RESPA, ensures that there can be no transactional benefit between real estate agents and loan officers. The lender shouldnât even take the agent out to lunch as a thanks. But the working relationship between these two professions continues, ideally with one party reaping the benefit: the borrowers.
ChloĂ« Seymore of RED Collective has just a few preferred lenders to whom sheâll refer buyers based on the clientâs specific needs. Her priority is looking out for her clients. âItâs in my buyersâ best interest to work with a local lender. Someone who knows the local market well and who I know can get the deal done,â she said. âI want my clients to have the confidence knowing weâll close on time. With little to no surprises on the money front.â
And thatâs the promise that Julie Russ of Homeside Mortgage makes to the agents in her network. âItâs my job to make real estate agents look good â to close on time,â Julie said. âI ensure a smooth transaction.â
Marketing your ability to close on time is all well and good, but youâd better be able to deliver.
A recent Inman report found the same to be true.
âLender marketing efforts directed at real estate professionals mean nothing if the lenders cannot back up their advertised claims,â the report summarized. âReal estate professionals only want to work with lending partners with a proven track record whom they can trust to help clients get what they need to close on time.â
Home buying itself is full of complicating factors. There are surprises and unexpected challenges. Â Real estate agents are uniquely positioned to act as a guide for buyers and sellers. The finance portion of the transaction is no exception. According to NAR, 45% of first-time buyers said that the mortgage application and approval process was somewhat to much more difficult than expected. So a trusted lender is another asset to the agent. Helping to make the transaction less complicated and compromising to the success of the sale.
Which further supports the power of a real estate agentâs referral to specific lenders. That relationship between loan officers and the real estate agent, while highly regulated, is also highly regarded.