In a hot market, whom you work with matters
The atmosphere surrounding Orlando’s housing market has become thinner in recent months, with many buyers and sellers feeling the pressure and urgency to make their moves while the time is right. Ghosts of housing crashes past have begun to materialize all around us — multiple offers, escalation clauses, low inventory and would-be disruptors abound. Surges of agents and loan officers can be seen reentering the real-estate arena.
Although I have yet to see anything actually revolutionary in terms of industry disruptors, many websites and companies are hoping to ride the wave of economic optimism and tech friendly culture by creating new models for real-estate commerce. This is the loudest echo back to the boom and bust days: The market is so hot everyone wants their shot.
One of the latest trends is real estate companies and brands opening their own lending arms and offering incentives to customers to use their services together, also known as “bundling.”
I want to be clear on this point: I’m in no way bashing any company or brand that does this. What I am recommending to consumers is that they review all the details and evaluate options before assuming bundling lending and real-estate services with the same company will be the best fit for their family’s needs. Some lenders are opening real-estate brokerages and incentivizing customers to work with their Realtors. I can’t make blanket statements that this is right or not right for everyone. Consumers should avoid rushing into signing a buyers or sellers agency agreement with a broker or agent to “bundle” services, because they also have a mortgage or real-estate brokerage. It never hurts to interview multiple companies and/or people to represent your interests in the purchase or sale of real property. If you already are working with a Realtor or lender you love, ask them how they compare. You may be pleasantly surprised.
Builders have long offered savings in connection for utilizing their in house lender. As a consumer, it is important to remember you do have choices. Many times, a builder’s lender is a great match for a particular buyer; in some cases, they are not.
The same goes for any lender. In this example, say a lender affiliated with your Realtor’s brokerage. When shopping for lenders, be sure to ask about things such as which loans they can offer (FHA, conventional, VA, USDA, etc.); what, if any, fees they have; and how long they have been in business. If you are purchasing a home, a great question to ask is what percentage of their business is home loans versus refinance business, and if they can provide you with referrals of satisfied customers.
The Better Business Bureau, Facebook, Zillow etc. can shed some light on past customers opinions if you want to do some sleuthing on your own.
As for Realtors, if a lender offers advantages to working with their in house agents, similar questions should apply. Which agent will you be working with and do you get to select your agent or just end up with whoever is assigned to you? How long has the agent been licensed? What are his or her sales and designations? If he or she is new, who will be partnering with him or her to ensure success in the buying or selling process?
New agents can really be fantastic. It is important to know what training he or she has had and if he or she will have someone overseeing things with and assisting when issues arise.
And don’t be afraid to shop around here, either. I recently took on a new buyer relocating from out of the state. They specifically wanted someone who knew the area and liked that I have lived here my whole life and have sold homes in Central Florida for 13 years. They did, however, interview two other agents before deciding to work with me, and I didn’t mind a bit. Not every agent is right for every buyer, so make sure you pick someone with whom you click and in whom you have confidence.
WATCH THE WEBSITES
As for the websites seemingly cropping up every day promising to save you money, time, and from ever having to interact with another human being during your home purchase or sale, make sure you read the fine print and chat with a Realtor before opting to opt out.
You can view the column I penned earlier this year online about Offerpad for more details on that model, and just be sure to understand what you are getting (or not!) with any service offering to assist you with real-estate sales. In a hot market with rising values, it’s not too difficult to guarantee to buy or sell your home. If you remember, when the market was crashing, there really weren’t too many startups promising to eliminate Realtors and get your home sold guaranteed. I have yet to see any business model that removes the Realtor from the process that is more beneficial to the consumer. The numbers don’t lie and if it sounds too good to be true, it probably is.
Buying and selling a home is a process that is more complex than having groceries delivered or hailing a car. Times do change and as a part of this industry, Realtors have to constantly evolve or face extinction. Ultimately however, the crux of any transaction is the people involved. When you hire an agent who is qualified and capable, someone who meshes with you and understands your values and goals, the process isn’t arduous or inconvenient. When picking a lender, Realtor or even a real-estate servicing website, consider all options, get references and look at the bottom line before making your final decision.