By now you may have heard that things are changing in the Real Estate world with regards to commissions. In a landmark decision, the National Association of Realtors (NAR) has lost a lawsuit that stated that Real Estate Buyers should be able to negotiate commissions with their agent and or Seller. The lawsuit further states that Real Estate Buyers have the right to negotiate how their agent is paid and by whom. We will discuss some of the pros and cons of this landmark case and how it will affect buying and selling real estate in the future.
Currently, Real Estate commissions have been paid by the seller of a property and is negotiated upfront prior to their property hitting the open market. The traditional commission structure has been 5-6% of the sales price and if another Agent other than the agent who procured the listing called the buyer's agent generally splits that amount with the listing agent. For example, if you are selling a home with a 5% commission in the listing agreement when another Agent brings a buyer to the home the commission to that buyer’s Agent has already been negotiated with the seller and that has traditionally been half of the total amount and in this case, it would be 2.5% to the Buyer’s Agent and 2.5% to the Listing Agent. With the new ruling against the Real Estate industry, it now states that the buyer will have to pay for the commission when represented by an independent Agent. It still can be asked that the seller pay this amount but now the Buyer has to be notified that it is their responsibility to pay their Agent.
One should know Real Estate law states that any Agent in a Real Estate transaction must take the seller’s best interests into account during the Real Estate transaction. The exception is that if a Buyer contracts with an outside Agent to represent them their Agent can look after their best interests, not the seller's. This is done with a contract between the Agent and the Buyers they choose to represent them, this is called a Buyer Broker Agreement and from this day forward this form will become mandatory for all Agents that represent home buyers. Although this may seem like just another disclosure form in the already sea of forms a home buyer and seller must sign it and it has far-reaching consequences for the Buyer notwithstanding the cost of representation. A potential home buyer may be forced to come out of pocket to pay for representation similar to an attorney-client relationship with a contract upfront stating how they will be paid to represent them. If a potential home buyer chooses to use the listing Agent that buyer will not have the same representation as the Listing Agent has to look after the seller’s best interest before that of any potential home buyer. This type of representation in California is called Duel Agency where the listing Agent represents both the buyer and the seller. This is not legal in a lot of states so it will leave home buyers having to contract with another Agent.
The intent of the lawsuit other than the enrichment of attorneys was to allow potential home buyers to negotiate the commissions in the transaction. This ruling missed the mark for home buyers as now they may have to come out of pocket with money for representation where before the seller has paid the buyer’s Agent. In typical fashion, something that was spun to help home buyers will end up hurting them in the long run as it could dramatically raise the cost of buying a home. A potential Home Buyer could now end up paying more for a home to get their Agent paid so they don’t have to come out of pocket to pay them. If they go directly to the Agent who has the listing on the house and try to negotiate without an Agent representing them they too could pay more for the house without representation.
All is not lost however, here at MAE Capital Real Estate and Loan, we have a solution to the problem of buyer representation. We have been using this method to help our Home Buyers over the years and have been very successful and that is where we represent the home buyer and do the mortgage for them. Yes, our Agents are licensed for both Real Estate and Mortgage which allows our Agent to negotiate with a home Seller for a commission which we also give a portion back to the Home Buyer for their mortgage. In this scenario a home Buyer will not only get representation on their purchase, but they will get representation on the mortgage at the same time. This method has proved to be far more convenient for a Home Buyer as they only have to make one call to their Agent to get information on the home as well as the progress of their mortgage as opposed to having to make 2 calls one to their Agent and One their Loan Officer. Not only will this save them time it will also save them thousands in having to pay the new Buyer Broker it will save them on their costs of the mortgage and in some cases our Buyers get a lower interest rate as we have successfully negotiated all the fees to be paid by the Seller and we contribute some of the commission on the sale to the new loan. In some other cases we have helped our clients Sell a home and Buy another home and we do their mortgage for them, in this case, we negotiate a far lower commission for our Seller and when they buy our contribution saves them now on both brokerage fees as well as mortgage fees. If you are considering Selling and buying another home this way will save you thousands and thousands of dollars when you work with MAE Capital Real Estate and Loan. We call this service bundling which is similar to the way insurance companies work when you give them the opportunity to cover your house and cars. Bundling Services in Real Estate now makes more sense than ever. If you are looking for the best way save look no further than Mae Capital Real Estate and Loan.
Today’s topic might be a bit confusing to some, but rest assured if you know, you can make the right decisions with your money. We are all seeing a tightening of money lately due to inflation which is where prices of goods and services go up faster than income does. Inflation is the worst possible economic effect on any society as the people who are affected by inflation have less disposable income left over after they pay for housing, food, gas, and services. In America, there is a significant amount of people that live paycheck to paycheck meaning that they spend every dollar they make on housing, food, fuel, and services every month. When these prices go up and their income does not follow then people have to go to other sources to make those essential payments such as credit cards and this puts the average American in a deficit. Although this is not good for the average American it is also not good for the banking system as the banks rely on the deposits of Americans so they can lend out that money to keep the banks in an income stream.
This brings us to the banking system itself and most see the system as confusing and have no idea how banks actually work. In America and other Western countries, the banking system is what is called a Fractionalized Banking system. That is a big word that means that the banks can lend out most or all of the depositor’s money. For example, if a bank has $100,000 in deposits from 5 customers ($20,000 each) and it pays 3% interest to those customers the bank then can lend out a good portion of that money at higher interest rates. Remember that the banks have to keep cash on hand in case their customers need cash and in the past banks have held back about 10% of that money for cash. The other 90% is lent out at a higher rate than they are paying the customers that have savings in their bank. In our example, there is $100,000 from 5 people paying them a 3% return to keep their money in the bank. The bank can lend out $90,000 and only keep $10,000 for cash reserves and when they lend out the money they collect say 6% on the money they lend out. This process should leave the bank positive in income and has throughout the history of fractionalized banking.
Here is the problem with the system. Banks currently have no reserve requirements meaning that in my example the banks can legally lend out every dollar of your savings. This should not happen, and most banks will not lend out 100% of their customers’ deposits as they want to stay open in case there is a day when there is a heavy amount of withdrawal money. Banks are in charge of regulating themselves based on their lending models and most banks do a good job of regulating this. Here is the biggest problem facing the banking system today and that is inflation. As we talked about earlier when prices go up faster than incomes the bank’s customers are spending more than they make and they do this with credit cards and equity loans. There will come a point where the average American can no longer pay their debt due to inflation. Human nature is to make sure they have food on the table first and foremost. When the consumer can no longer pay their debt, they default. This means that if Americans can’t pay their credit cards they go into default and the bank receives no money. This holds for mortgages as well.
This is where things start to get crazy so hang on. Remember, that Banks will lend out around 90% of depositor’s money and if those loans start to go bad there is only 10% of cash left for banks to operate. So, a bank’s reserves may get eaten up quickly if there is a high default rate. Banks lend out money for Credit Cards, Residential Mortgages, and Commercial Real Estate loans and lend to other banks. When customers start to default on their loans the income stream to the bank is greatly diminished and they still have to pay interest on the deposits they have for their customers. If the bank has not held enough in reserves to account for this then the bank will fail. Or as we saw in 2008 when this started to occur the government stepped in to save the larger banks not through the use of the Federal Deposit Insurance Corporation (FDIC) but actually printing money to put back into the system. The smaller banks were bought up by the bigger banks. In 2008 we had other factors going on to bail out the system as we were not in an inflationary time it was more of a recession meaning the economy was retracting with no inflation. Real Estate values during this time went down the stock market sold back and there was high unemployment due to the recession. Interest rates went down during this recession as there was no real inflation so with lower interest rates those who had the means bought homes and commercial real estate as the cost of money was cheap and this brought the economy back.
Fast forward to 2020 when the COVID crisis hits. This was a forced recession by the government telling people they could not work. We had never seen anything like this in American history and the result was that the Government and the Banking system were faced with something they had never dealt with before. The mistakes that were made have led us to where we are today. The biggest mistake was to shut everything down that was not essential. The next mistake was that the government did not take into consideration where we were in the business cycle with a healthy economy at the time before they shut the economy down. The Government printed and sent out money to every American and it may have helped some in the short run the long run is what we are paying for today. The Government also lowered interest rates to stimulate the economy and it sure did with people buying houses and freeing up equity to buy more stuff. The money was flowing through the economy and people were buying things at a crazy rate until inflation hit people had to slow their buying habits and in addition to that the Federal Reserve saw the inflation and the only tool they had to slow inflation was to raise interest rates and they did.
Today all that stimulus money is gone, however, the government has continued to spend money by sending it overseas and starting foreign wars. I can guess that the reason for the wars is to get the economy moving again as war requires a lot of money to flow. We could go into the problems of this all day long, but this is not the forum for now. The problem is, currently with the high interest rates and high inflation the more the government spends the less the dollar is worth on the world stage. That coupled with the BRICS system that threatens to remove the Petrodollar on the world stage is further devaluing the dollar. The banks are starting to see their default rate climb with inflation and this is diminishing the bank’s liquidity as this continues to happen, we see a tightening of the availability of money. Today March 11, 2024, the Bank Term Funding Program (BTFP) which is a way for banks to secure funding from the Federal Reserve will be ending. This will force the banks to go to the discount window to borrow short-term funds. This will lead to money being tougher to borrow. We are also beginning to see defaults start to rise and that coupled with the already tight money supply for Americans high interest rates and rising inflation it is a wonder why this is being done. Is it being done so deliberately? You can’t help but think there is some master plan to change the monetary system in America or to create a global currency minus Russia China, Brazil, India, South America, and countries in the Middle East (the BRICS nations). But why?
I am beginning to think that all this stuff we have never seen before such as wide-open borders, money being sent to some foreign war nobody seems to want, money given to illegals, civil disruption, and propaganda being spread all over, is all part of a plan to make America weak. The reason is to change the monetary system and move to more globalization that not many Americans want. I see the UN helping in this destruction of America in that they are funding the illegal migration and to make it worse the US is the largest supporter of the UN. I mention this not to scare you but to open your eyes to the great sellout of America and a move to the International Monetary Fund or something else, instead of the Central Banking system we currently use and enjoy independently of the rest of the world. Before this can happen the Banking system in the US must collapse and it appears from someone who has watched and studied this for the last 45 years that this is what is happening. I don’t want to scare people and I might be stating the obvious, but things are changing fast. I am not holding out much hope for the Federal Reserve to lower interest rates any time soon as we still have inflation, and this is known not by the numbers the government feeds us but by simply going to the grocery store and filling up my car. The mortgage business is the slowest I have ever seen, even worse than 2008. This is also true for the Real Estate market and as things get tighter we should start to see more inventory hit the market as people are having a tough time paying their mortgages even if they have a 2 or 3% mortgage. I am also seeing more people defaulting on their mortgages creating a higher foreclosure rate. We as Americans can only do one thing to fix this crisis and that is to vote correctly, although I live in California and the system has been corrupt for decades it’s all we have to save our Constitutional Republic.
What is an assumable mortgage? It is a mortgage that another person can pay the difference in the current equity position and assume the underlying mortgage. In this piece, we discuss the advantages, disadvantages, the process, and how to get it done efficiently. This is not for everyone but if you are having to sell your home and you have one of those nice home loans with interest rates in the 3's or 2’s your home is more marketable than someone that may not have that available to them.
To define what happens when someone assumes your home loan you need to be armed with the right information. Realtors that have been in the business less than 10 years will probably have never had to deal with an assumable mortgage but those who understand how to market it for their sellers can end up getting the Seller more money on the sale of the house. An example of an assumable mortgage in a Real Estate transaction would look similar to this: Take someone who wants to sell their home and have an assumable FHA loan. They Owe $490,000 and the market is selling homes in that neighborhood for $550,000 to $600,000 and the potential seller has an assumable FHA loan with an interest rate of 3.5%. A potential home buyer will have to put down the difference in the sales price and the amount owed on the mortgage. Being able to offer an interest rate in the 3’s will make this home more marketable, but it is not for everyone as you need to be able to put the difference down in cash. So in this example, the house sells on the higher end of the market because of the 3.5% mortgage for $600,000 and the potential home buyer has to come up with $110,000 for a down payment the difference between the $600,000 agreed on sale price and the amount owed of $490,000.
Once a contract is negotiated between the new Home Buyer and the Seller the process begins. If you have a good Real Estate Agent, like an MAE Capital Agent, they would have done the leg work before the house went on the market to make sure the existing home loan is assumable and get the paperwork for when a potential home buyer does come knocking it will be ready for them. The process to get an assumption started is to complete the entire Residential Mortgage Application from the existing lender and provide them with all of your Income documentation, your banking info, and your credit report with a minimum credit score of 620, however, this may vary from lender to lender. You will be applying for the existing mortgage payment, balance, and remaining term. You will need to be able to show enough income to qualify for the existing mortgage by being able to prove that the mortgage payment and your existing monthly bills are no greater than 49.99% of your income. This is done by providing pay stubs tax returns and W2s.
Once you have gathered all the documents that the existing lender needs to issue an approval by analyzing all the documents provided such as pay stubs, bank statements, retirement statements, tax returns, W2s, and any other supporting documentation they require. If you are involved in an assumption transaction you should be prepared to wait as lenders are just getting the message that this is a viable way to sell a house, they have not fully ramped their assumption departments so it could take a bit, up to 30 days once they have the documentation. This is why you need a Real Estate professional on both ends that understands the process. At MAE Capital Real Estate and Loan, most of our Agents hold both a Real Estate license as well as an NMLS mortgage license so they can help talk the talk with lenders with trying to get an assumption accomplished. Knowing how the process works and being able to understand what the existing lender is saying is invaluable as this could save the transaction from falling through or taking longer than it should. Also when you bundle your services with MAE Capital Real Estate and Loan you will save money on the sale of your home and the purchase of your next home.
As a seller, you may not know if your loan is assumable without talking to your existing mortgage holder. If you know you have an FHA or VA loan you know those can be assumed. If you are a Veteran, you should know that if you allow your VA home loan to be assumed by a non-veteran you will not be able to use your VA benefit to buy a home again until that home loan has been paid in full. So, if you are a Veteran you may want to look at this more carefully especially if you are planning on using the VA home loan on your next home purchase. If this is a process that you are interested in please contact one of our Realtor/ Agents today as you will have a pro on your side.
If you have been looking to refinance your home loan now might not be the time to do it. Ok, I know this is contrary to the mainstream narrative when it comes to refinancing. Most people are hearing that now is the time to act as rates are at historic lows, if you have heard this you are hearing the narrative. It is true that interest rates are low, however, rates still should be lower. There are many reasons why I say this, and I will get into it in this blog. The biggest problem with lending today is not interest rates it is turn times and bottle necks in the industry.
It is true that interest rates are low, however, there are still parts of the rates that are not figured into the price of the interest rate. What I am telling you is that for most all Government loans, FHA and VA loans, there is a piece of the puzzle missing in the price of the rate. The price in the rate refers to the discount points. Before it was announced that you could take a pause or defer your mortgage payments during the pandemic the pricing on Government loans was considerably better. The best way to explain why is to show you behind the mortgage curtain, if you will. You see when lenders sell a mortgage in the secondary mortgage market to Fannie Mae, Freddie Mac, or Ginnie Mae (the Agencies) lenders will retain the servicing of the loan. What that means is that a lender will need to re-capitalize their money reserves by securing the mortgage with one of the above agencies by selling a portion of the yield to one of the Agencies. In other words let’s say you have a 3.5% interest rate on a loan (to make it simple) the lender may sell the loan to one of the agencies guaranteeing them a 3% yield. They then will keep the .5% to collect the payments from the borrowers and send the 3% to the agency they sold the loan to. What happens when borrowers stop making their payments? Well the lender still has to make those payments to the agency they sold the loan to. Thus, lenders will lose money on servicing loans during the pandemic. So, to offset this a lender will have to raise their rates to offset the losses in their servicing departments. It is more complicated than that but for simplicity that’s what’s going on with rates and pricing.
Thus, when people start making their payments again, on a regular basis, lenders will then be able to adjust their pricing on their interest rates back down. Interest rates are still artificially high although they are still low, if that makes sense. I am not saying when the pandemic is over that rates will automatically go down, however, in a normal world they should. Lenders might like the increased profits they are receiving from the higher upfront interest rates and fees. This is all new territory for everyone so to say this is the “new normal” and that it will be this way is confusing as I have done pricing before with a Mortgage Banker so I know how it was done. It may never go back to they way it was but competition is the key to lower rates and without it lenders could set interest rates and profit margins like OPEC with oil prices. This activity is illegal in the United States, however, everything has changed and that too might be a “New Normal”.
To add insult to injury, turn times on loans have slowed to a nauseating pace. If you are in the middle of trying to get a home loan whether it is a purchase loan or a refinance you are experiencing this. I have talked about this before in prior blogs but is has gotten worse with the increases in loan volume. You see the large lenders have not been able to get back to their work spaces yet and some are working from home and others from the office, so we are seeing that the right hand often doesn’t know what the left hand is doing so the time to do simple tasks like sign off conditions are taking 2-3 times longer than before the shutdown. This has impacted refinances and purchase transactions by adding an additional week or two or more, in some cases, to the process. We have also seen signing agents (Title companies and Escrow companies and Lawyers on the East Coast) taking longer to do their jobs as their offices have not opened to full capacity yet either. All this change has hampered the whole process of getting a home loan. It is frustrating to clients but to us that have always strived to hit our target closing dates on time it has been a real challenge. This will change in time; I can’t tell when as we seem to all be at the mercy of our local and state governments as to what can open and when and more importantly how they can open. Until the world figures out how to fight this pandemic and how to govern during this time we will continue to see change in the Home Loan industry. We are always here to assist you and give you the honest truth to what is going on in the industry. Please call us at 916-672-6130 we are here to help.
Here is a topic I have not visited in while but feel it is time again to address what is going on with mortgage rates. The stock market has taken some serious hits over the last few days due to concerns with the Coronavirus and that has put downward pressure on the US Treasuries and the bond markets. Why you ask? I will get into the details of why later on but know that when there are panics in the Stock markets money tends to flow towards safe and secure investments while the markets are gyrating like bonds. Some of the reasons the Stock Markets have corrected downward is over fear of the Coronavirus and the price wars going on now with oil prices after Russia pulled out of OPEC. So there are a lot of economic new stories right now driving the markets.
Let’s talk about the effects of the Coronavirus and why it is driving the Stock Markets down around the world. But first you have to understand what stocks are. Stocks are shares of large companies that are sold to the public so the company can remain capitalized (i.e. have enough ready capital, money) to build and expand their business. People who buy and sell stocks tend to look for companies that will have good growth into the future to buy so the hope is the value of the stock will grow with the company. Investors in stocks will tend to sell their stock in a company if they foresee a potential down-turn in the company’s profits. That said with this threat of Corona virus in the public it is believed that people will not buy or do normal activities if they can not go out into the public, thus not spending money on goods and services they would normally have spent their money.
Now that you understand how the markets work in a basic form you now can see why the markets have been selling off. But how does that affect the interest rates you ask? Well this is where is gets interesting so follow along closely as I am about to open a door into a reality that few actually see or know about and that is economics. As we have seen the Stock markets selling off due to the potential earnings loss of companies due to lack of demand (people not buying goods and services), investors in the Stock Markets have been looking for a relatively safe place to park their client’s money during this correction. The place is the Bond Markets where fund managers and Stockbrokers park funds while Stocks settle down. Specifically, the United States Treasury Bonds are the specific bonds that are purchased. This is where it gets really interesting so hold on to your hat. Not only do Stockbrokers and Money managers park their funds in U.S. Treasuries, the Mortgage industry uses the 10 year Treasury Bond to hedge their bet on interest rates.
Hedging defined is buying or selling an investment to reduce the risk of an adverse price movement of another investment, kind of like an insurance policy. In other words, the folks that sell mortgages will buy U.S. Treasuries to offset the possible movements in the interest rates. The concept of hedging is important to know because the interest rates are being driven by this right now. As the Stock market continues to correct and Treasuries are being pushed to their lowest levels in the history of the Treasury market, so what does this have to do with long-term interest rates?. Although this does not directly affect interest rates it does take a way the hedge vehicle for mortgage bankers. In response to that when interest rates should be declining, they have actually raised. That’s right interest rates have gone up over the last few days as the Stock Markets declined the Bond Markets rallied but longer term interest rates have actually gone up.
The Federal Reserve saw this affect happening and decided to lower the rate they can control to try to stimulate the markets with low interest rates. You have to understand that the Federal Reserve does not control long term interest rates, the only rate they control is the Fed Funds rate. The Federal Funds Rate is that rate in which Banks can borrow from the Federal Reserve. The rub is that banks don’t need to go to the well for money in a strong economy to borrow money. So, there is little to no effect on long term mortgage rates with the Federal Reserve or “Fed” lowering their rate.
On another front is oil prices and their effect on long term interest rates. With Vladimir Putin pulling out of OPEC ( the largest oil cartel on the planet who sets oil prices around the world) and OPEC responding by lowering crude oil prices to as low as $31 a barrel creating essentially a war over the control of oil prices. This has a very adverse effect on American oil production as when oil prices dip to these kind of lows American oil companies cannot produce oil at that low of a price it will become more beneficial to import oil at the lower prices and hurting American oil producers and the workers that produce the oil. There are now worries over American oil producers filing bankruptcy. This now will impact American workers and those that support that industry like steel, heavy machines, plastics and so no, then the effects trickle down the towns in which those workers live and those companies that support those towns. This will inevitably turn up in our unemployment numbers signaling a slow down in the overall economy. This affects the Stock markets in the same ways as mentioned above.
There is a bunch of things happening to where the Stock Markets and the Bond Markets have been reacting crazy. This is a very unique time in our economy to watch what is going on as it is truly historic and has been going against everything we know and seen over time. There is a component that I have not mentioned here that is hurting the overall economy in ways it has no idea and that is the media. The media has been blowing this virus out of proportion to the point that people are panicking and running scared. I do not profess to know anything about this outbreak nor do I profess to be any kind of medical professional but what I do know is numbers and when you see the differences between the deaths by Coronavirus versus the regular Flu there is no comparison far more people have died year to date over the Flu, so it stands reason that there is a abnormal hysteria going on out there. I am not trying to discount how terrible this virus is, but I can’t buy into the hysteria.
So, if you are wondering and scratching your head as to why interest rates have not done what the media is implying this is why. Interest Rates are great I am not going to discount that and yes I love the attention we are getting from the media that interest rates are at historic lows it has been great for business, but don’t get set on getting a long-term mortgage in the 2’s without paying greatly for it. My team is ready and waiting for your calls to go over your existing mortgage and see if now a great time to refinance. We can refinance your mortgage without resetting the term which is a huge help with the over all interest you would pay on a mortgage over time. For example, you took your existing loan out 2 years ago and have 27.5 years left on your existing loan and you don't want to lose those years you have already paid. How about a refinance that would be a 27 year loan as to not take away the time you have already paid, we are doing this all the time. For more information on refinancing your home or investment property give us a call today and we will tell you the truth about Refinancing and give you the best interest rates from Banks across this great nation. 916-672-6130 and download our app for free.
When we say Customer Service in today’s world what are we really talking about? Some of us older generational folks’ definition may be a little different than the millennial’s definition of customer service. I was brought up to open doors for women, talk when spoken to, and treat people as though I would want to be treated, call back people when they leave you a message as soon as you can and so on. So you can probably guess that I am over 50, but do these simple concepts change with generations or should the new generations take into consideration the old ways of serving people and should the older generations have to keep up with the new ways of communicating? My answer would be yes to both, the younger generations in order to keep top notch customer service should take into considerations the way things have been done in the past to provide the highest level of customer service. On the flip side of that the older generations have to conform to the new ways of providing top notch customer service. The older generations have to learn the new advanced communication techniques in order to provide top-notch customer service.
That said, we all should take care when providing top-notch customer service and take into consideration who our customers are and how they expect to be communicated with. In the Real Estate and Mortgage world, we are taught from day one to provide a high-level service as we know our customers have choices in who they work with. From the first contact with a new customer, it is imperative that we establish the needs of our clients. By establishing exactly what the customer is looking for it is then our responsibility to build a relationship with the customer and determine exactly how they wish to communicate with us throughout the transaction. We have to see if the customer prefers to be called on the phone, texted, emailed or all the above. We then have to learn their personality, their style of talking, their demographics, and a little of their background to not only communicate with them in a manner they expect but to be able to build a level of trust. Yes, trust is imperative when you are trying to provide a high level of service, if your clients can’t trust you there will be no way to provide any level of service that will make your client happy.
Customer service is not just simply being nice it is getting know your customer and what their needs and personality is. Communication goes far deeper than simply being nice and giving the client property to look at or loan choices. In Real Estate you have a fiduciary responsibility to your customers to act in their best interests. This is defined as acting on the behalf of your customer in a manner to which you are them. So if you do not take the time to fully know your customers you will not be providing the best fiduciary services for your customer either. Although your customer may never know, or care to know Real Estate law, it is not only an ethical responsibility it is also a law, once you have established your fiduciary relationship with your client to act on their best interests. This should be a given in any Real Estate transaction and that service level is the bare minimum, going above and beyond should be the norm.
So what is going above and beyond the norm actually mean? My opinion is simple and that is give the customer what they want and then give them more than they ever expected. Sounds easy but exactly what does that mean to a fledgling Agent or even an experienced Agent who may have forgotten that art? It all starts from the beginning, the first time you meet a customer, either on the phone or in person, or even in an email. First impressions are the most important impressions as those impressions will be the driving force throughout a transaction of how your customer views you. If your first impression is one that is rushed and you appear to be too busy to deal with them then the customer will have that mindset of you though the whole transaction and feel less important than your other clients (not good). If you give the appearance that you are very busy but you drop everything else when you are with the customer and they are your only focus when you are with them, and you treat them as though they are your only client and that they are special whenever you talk with them they will feel that they are special and will be more apt to work with you. It is these subtle things that can make a customer feel comfortable with you and want to do business with you, even if you have worked with them in the past the same rules apply. Remember, you don’t have to know everything about the Real Estate or Loan business to build a special relationship with you customers, you just have to treat them with the upmost respect for their time and their efforts, the rest will fall into place.
As a customer, you should feel like you are very important to the Agent or Loan Officer you are working with. You should feel that your Agent is representing you to the best of his or her ability and is looking after you best interests. A customer should be able to convey his or her needs to an Agent fairly quickly upon the first meeting and feel as though the Agent is going to work for them at a high level. Sometimes you are referred to an Agent by a friend or a family member and feel obligated to use that Agent as your friend or family member used that person. I say absolutely not if you are not comfortable with them at the first impression you will be continually be disappointed throughout the transaction. Sometimes your family or friends will refer you to an Agent who just assumes the sale because of the referral and the Agent doesn’t feel the need to “turn it on” for you. If you are feeling this then do you own research and find an Agent or Loan Officer who you feel comfortable with. This is a relationship business and just because your family member or friend has a relationship with a particular Agent or Loan Officer does not obligate you to use them. Everyone has a different personality so pick someone who fits yours, you can discriminate as a customer as to the type of person male or female, black, white purple or pink who you want to work with so find a person you feel will best work with you and your personality. You will be working with this person or persons for at least a month or two or maybe longer, so you need to feel good about your representation and your relationship with your Agent and your Loan Officer.
In conclusion, you should have an Agent and Loan Officer who you are comfortable with and your Agent and Loan Officer should be looking out after your best interests. From our side of the fence, and as the customer service provider, we are humans and we make mistakes and we are not perfect but the way we treat our customers should be with the upmost respect and it is up to us to “show you the service”. That’s right you should be able to stand on top of a mountain and yell “I am the customer show me the service!” It is up to us to show you the service and communicate with you however and whenever you want to be communicated with. As a Realtor and a Loan Officer and the Broker of record from my company, MAE Capital Real Estate and Loan, it is up to me to show you the service you expect, then it is up to me to take that to a whole new level, adding education, coaching, compliance, and a products that are second to none. It is one of the reasons you will find our website full of useful information that even our competing companies use as a source of information and training. I am not saying that all Real Estate and Loan transaction we do are easy, in fact, most transaction in today’ regulatory environment are slow and cumbersome, but we know that it is the industry not our service levels. We map out your transaction from the beginning so you know what to expect with regards to time lines, documentation, and disclosures so there are very little surprises. If you are another Agent that works for another Broker I hope this helps your career. If you are a Loan Officer from another company reading this I hope this helps you as well. Most importantly I hope all Real Estate and Loan Customers are treated with dignity and respect and receive the best service the industry has to offer and we do hope to have the opportunity to work with you.