Link to Kiplinger's Personal Finance Article - In a Market Where Negotiation Counts.... Find an Exclusive Buyer Agent

Kiplinger's Personal Finance Article - In a Market Where Negotiation Counts.... Find an Exclusive Buyer Agent

The article states, "In a market in which negotiation counts, you'll do well to hire a buyer's agent to help you identify good prospects and to frame and negotiate your offer (to find an exclusive buyer's agent, go to www.naeba.org). Look for one who is knowledgeable about your area's new-home market -- its dynamics, values, builders and subdivisions."

The only problem with the paragraph is that they should have put the word "exclusive" in front of - buyers agent -- when stating -- "you'll do well to hire a buyer's agent."
As a buyers agent works for a company that lists property for sale and may represent the seller 99% of the time... whereas an exclusive buyer agent and their company never represent the seller.

The article mentions how builders can try to make the buyer use the financing partner of the builder..... Which again - relates to some of my posts below...about lender steering..

A good agent will help you compare the lender's offerings with those of another lender, analyzing the good-faith estimate. Instead of getting extra material things thrown in - see if you can have them NOT give you the material things - and get yourself an added price reduction instead...

The article also give you tips on how to select a good home builder.... All in all - it is one of the better written Real Estate articles I've seen in a long time - meaning - accurate facts.

This Realty Times Article Highlights Information That is Valuable to Home Buyers

This Realty Times Article Highlights Information That is Valuable to Home Buyers
Including a link to The National Association of Exclusive Buyer Agents

It talks about the disadvantages of "one stop shopping" (as I also mention in my my recent blog post) -- how agency disclosure is at very low levels, how the public really doesn't know the difference between a so-called buyer agent (who may list property 95% of their time - but only calling themselves a buyer agent when they are working with a buyer) - and an Exclusive Buyer Agent.

In fact - many traditional Real Estate agents haven't even heard of an Exclusive Buyer Agent - and have no clue what they are...

Check out the link - it's good reading....

Joint Venture Agreements Between Brokerages and Wells Fargo

Recently - the founder of Long & Foster, the Washington DC area's largest residential real estate brokerage, urged his thousands of agents to recommend the company's in-house mortgage lender more often - and stop working with outside lenders such as Bank of America.

In an e-mail to all Long & Foster agents and managers, Wesley Foster Jr. chastised his workers for funding mortgages through other lenders - instead of using Long & Foster's affiliate, "Prosperity Mortgage."


The e-mail sparked criticism, with some Long & Foster agents, consumer activists and others raising concerns about whether Long & Foster is trying to profit at the expense of their clients' interests.

Foster said he wrote the memo to make agents understand that each time they use Prosperity, they're helping Long & Foster.

HUD/RESPA rules state it is illegal "if the agents or office managers receive kickbacks or fees for doing nothing more than referring services."

However - this is not the first such joint venture revenue or profit sharing agreement that I have heard of between Wells Fargo and a brokerage - so apparently - such corporate agreements give a loophole - so that such revenue or profit sharing is legal.

RESPA may want to tighten up on their rules a bit...

This is another piece of evidence that many Real Estate companies pressure their home-buying customers to use an in-house lender or lender that is co-located at the company's office.

Stephen Brobeck, executive director of the Consumer Federation of Americas stated: "It will not serve the interests of their customer and may even erode the credibility of their agents."

One Long & Foster agent said that they found the e-mail "troubling" because it implies that agents should strive to make the company more prosperous, even if it means undermining a client's interests.

I noted previously in a blog post - that a large local Real Estate brokerage here in Chicago has penned the same type of joint venture agreement with the same company - Wells Fargo. So - Wells Fargo appears to be penning such agreements with major Real Estate companies across the USA - to help pad the brokerage's bottom line - in exchange for their agents pushing business to Wells Fargo.

Is sending your clients to a specific lender such as Wells Fargo - looking out for their best interests in a fidicuary manner?

A fidicuary means that you are looking out for someone's best interests. If you are looking out for their financial best interests - wouldn't you help them shop for the best loan rates and fees - and not steer them towards a lender because it will make your broker's company more profitable?

The brokerage company's financial interests are being placed ahead of the client's interests. That is not being a true fiduciary. The Wells Fargo loan may or may not be the best for the client. How would you know unless you compared? You wouldn't!

Real estate firms promote these arrangements as one-stop shopping - telling their buyer client "it is convenient" "just use Joe here in our office" (who either pays the office rent or their company has one of these joint venture agreements with the brokerage - which exploits a loophole in existing RESPA rules - to put money in the brokerage's pocket.

I wonder how many brokerages have retaliated against agents who didn't make referrals to the in-house or joint venture lender?

Do agents get an extra year end spiff - which isn't formally tied to the in-house referrals - but still based on the number of in-house referrals? I don't know.... I'm just asking the question...