When it comes to buying a new home, you will work with many different people along the way. Your loan officer should be your financial advocate, and your realtor should help you find a home that fits your needs and budget. It is important for your loan officer and realtor to stay in communication, and they should communicate properly in order to benefit you the most. Here’s what you need to know to get the best results.
The Relationship between Lenders & Realtors
A study compiled by LendingPatterns.com via the Home Mortgage Disclosure Act, in 2014, less than 10% of all home buyers that year had preapprovals from their lenders. However, realtors prefer when their clients have these preapprovals. It means they can actually buy the homes they see, and the realtors are not wasting their clients’ time by showing them homes that are out of their budgets. These days, more and more real estate agents refer their clients to trusted lenders, and these agents know which lenders are most likely to help clients in various financial situations.
The Real Estate Settlement Act (RESPA)
It may seem a little strange for your realtor and your lender to communicate with one another, but the RESPA act prevents any kind of financial benefit from this relationship. In fact, lenders and realtors are not even allowed to have a friendly lunch because this could be viewed as some sort of manipulation. With that in mind, it’s important to realize that your lender and your realtor do need to communicate. After all, it’s in your best interest if they do. This way, you can rest assured that you know your budget, and your realtor can help you stay within it.
Importance of Proper Communication
Buying a home isn’t an easy task. In fact, nearly half of all first-time buyers claim the process is far more complicated than they imagined. Because of this, you need a team who has your back and people who are working with your best interests in mind. That’s exactly why you should do your best to facilitate proper communication between your lender and your realtor.
Getting them Talking
First and foremost, if your lender and your realtor are already in communication with one another, you will probably know about it. If they are not, there’s a good chance you will find yourself acting much like the middleman. You will need to gather documents and deliver them to both people, and this can further complicate an already complicated process. From the start, be very clear that you would appreciate it if your lender and realtor could share information between themselves. Your lender could communicate your preapproval amounts with your realtor, for example, and your realtor could provide information about the type of home you’re interested in to the lender.
Lenders and realtors should always be in communication. Both of these people should always keep your best interests in mind. Even though both parties have something to gain when you purchase a home – interest for the lender’s bank and commission from the sale for the realtor – they can only complete the sale when they work for you.