Benchmark Happenings
Brought to you by, Jonathan Tipton & Steve Reed of Benchmark Home Loans, Benchmark Happenings is a podcast that is a biweekly discussion about living in and moving to Northeast Tennessee along with the local real estate market. Join your host Christine Reed as she interviews Jonathan & Steve, local business owners, sought-after industry experts, Veterans, Realtors, Benchmark clients, and more.
Benchmark Happenings focuses on discussing all things related to mortgages and Northeast Tennessee. Placing the spotlight on all the reasons you would want to live in and move to Northeast Tennessee, Benchmark Happenings highlights upcoming events, local businesses, things to do, and other aspects related to Northeast Tennessee. We will also be answering mortgage questions from buyers, sellers, and real estate agents as well as discussing everything going on in our local real estate market.
To help you to navigate the home buying and mortgage process, Jonathan & Steve are currently licensed in Tennessee, Florida, Georgia, South Carolina, and Virginia, contact us today at 423-491-5405 or visit www.tiptonreedteam.com.
Benchmark Home Loans | NMLS # 2143
4138 Bristol Highway
Johnson City, TN 37601
Jonathan Tipton
Senior Mortgage Planner
NMLS # 1188088
jonathan.tipton@benchmark.us
Steve Reed
Branch Manager
NMLS # 173024
steve.reed@benchmark.us
Benchmark Happenings
Navigating Realtor Commissions: Jonathan Tipton and Steve Reed discuss the NAR Settlement
Are seller-paid commissions affecting your closing costs? Not at all! Tune in to Benchmark Happenings for an eye-opening conversation with Jonathan Tipton and Steve Reed from Benchmark Home Loans. They unravel the complexities of the National Association of Realtors Settlement and clarify its impact on real estate transactions. Discover the recent changes in VA loan regulations that now allow buyers to pay commissions, and why it's crucial to negotiate these commissions into the purchase price rather than adding them to the loan amount. You'll gain invaluable insights on how to ensure smooth transactions and proper compensation for agents by working closely with loan officers.
We also dive deep into the importance of a buyer's representation agreement for loan processing and approval, especially for VA loans, with a look toward its future application to other loan types. Learn why early communication between agents, lenders, and buyers is pivotal to preventing discrepancies and avoiding delays. With a special focus on customer service, Jonathan and Steve advocate for a concierge approach—ensuring constant communication and availability to create a seamless experience for all involved. Don't miss out on these essential tips for ensuring accurate loan estimates and achieving a hassle-free closing process.
To help you to navigate the home buying and mortgage process, Jonathan & Steve are currently licensed in Tennessee, Florida, Georgia, South Carolina, and Virginia, contact us today at 423-491-5405 or visit www.jonathanandsteve.com.
Benchmark Happenings brought to you by Jonathan and Steve from Benchmark Home Loans. Northeast Tennessee, johnson City, kingsport, bristol, the Tri-Cities one of the most beautiful places in the country to live Tons of great things to do and awesome local businesses. And on this show you'll find out why people are dying to move to Northeast Tennessee and on the way we'll have discussions about mortgages and we'll interview people in the real estate industry. It's what we do. This is Benchmark Happenings brought to you by Benchmark Home Loans and now your host, christine Reed.
Speaker 3:Well, welcome back everybody to another episode of Benchmark Happening so today. It's a rare treat that we have Jonathan Tipton and Steve Reed joining us. Jonathan, it's sort of like pulling teeth to get him to come on and do a podcast. Thank you for being here, Jonathan, I'm here.
Speaker 4:He's a busy guy. You got me. He's a busy guy.
Speaker 3:Well, you know what I think today is really important. We're going to keep it short and sweet because we want the realtors to listen to this. We've got a lot of buzz concerning the National Association of Realtors Settlement and I wanted to have both of you, jonathan and Steve, on so that we can clarify what these changes will look like going forward. Does that sound good?
Speaker 2:Sounds good Awesome.
Speaker 3:So, jonathan, I'm going to start with you, because it seems like the biggest concern is what people have is this Will the commissions paid by the seller for the buyer impact the maximum closing costs the seller can pay?
Speaker 2:Fortunately no, not on any of the loan programs. That is not included in the cap as of right now for any of the different loan programs VA, conventional, fha, thda or USDA. So no, it does not impact what they can get in. Seller paid closing costs.
Speaker 3:Okay, all right. So so, steve, before loan programs like well, like the VA, they would not allow a buyer to pay commission to a realtor, so has this changed?
Speaker 4:Actually it has changed. Va came out and temporarily they kind of have a temporary regulation here that said they would allow the buyer to pay commissions. So I feel like I'm about 99% sure that's going to go into a permanent change. So they've tried to follow suit with Fannie Mae, freddie Mac and, like Jonathan says, fha, usda, and kind of take the same approach because it's really it's hard enough for veterans to get their contracts accepted now.
Speaker 4:They really don't need another hurdle where they can't pay a real estate agent, or this would really be a tough spot for for our veterans to be in. So so I'm not too worried about that. They did say it was a temporary change, but I think when the final order is signed by the judge, I believe it's sometimes in November, november, I think. So when that final order gets signed. There's going to be a lot going on in November, guys, you might want to start to say you might want to watch the news, but I don't know Half of it you can't believe.
Speaker 3:So I don't know. Back that one up a little bit, so are there any other? And you probably already answered this, but are there any other loan programs out there that don't allow the buyer to compensate the agent?
Speaker 4:No, not at this time. So we're over that hurdle, so we don't have to worry about that. Our biggest concern, jonathan and I both, when they first announced this, was oh my goodness, va's never allowed a buyer to pay commission to a real estate agent. So that was one of the biggest fears I think we had, and so VA jumped in pretty quickly and alleviated that fear they did.
Speaker 3:Oh wow. So, Jonathan, can the buyer's part of the agent's commission be added over and above the purchase price, depending on the type of the loan?
Speaker 2:So kind of a double-edged sword. It cannot be added into the loan but you can add it into the purchase price. So as long as it's negotiated into the purchase price and included in the purchase price, that's perfectly fine. But you can't negotiate the contract and then come back and then add it on top of the loan if it's not been negotiated. So just be sure, get with us, figure out how it needs to be done up front and negotiate it in the contract up front. And yes, it can.
Speaker 3:Okay.
Speaker 2:As long as it appraises, so it does still have to appraise, but there is no limitation on allowing that to be added on top of the purchase price.
Speaker 4:Okay, yeah, and just to add to that just a little bit and Jonathan said it perfectly, that's the way it is, but really, as a real estate agent, just think of it like closing cost almost, because you could never really add closing cost on top of a loan amount or whatever unless it's built in the purchase price. So it's really the same. I mean build it in. But just keep in mind it has to appraise.
Speaker 3:Has to appraise. Yeah, Okay. Well, I think now more than ever, it's going to be important for realtors to work very closely with both of you guys here at Benchmark.
Speaker 2:Probably more than ever. I mean this is having us involved on the front end make sure that everything goes smoothly and that we can get the contract done correctly, and make sure that you, as an agent, are paid, and paid the right way. So I would agree yes.
Speaker 3:Yeah, and I think you know both of you are really on the cutting edge of this. You've taken the time to really educate yourself. So you know, for any realtor that's listening to this podcast, you know, I would highly recommend, you know, calling Steve, calling Jonathan, you know, with these questions to help you navigate this process. So, steve, if the buyer's paying his part of the commission, how will this change the loan process and requirements? Will this amount show on the paperwork?
Speaker 4:Yeah, and just to kind of add to what you were saying as far as working with us, I mean, if this train goes off the rails early on, it's headed down the mountain, it's going to be bad. So we really all need to get headed in the correct, right direction from the start. So everybody being on the same page is more important than it ever has been and it's always been important, but it's really so now. I mean, if we're not on the same page or even, in some cases, working against each other, this thing's going to be. It's not going to be pretty for our clients and we want them to have the best experience. So but to answer your question, as far as paperwork goes, we don't have to put the buyer paying commission.
Speaker 4:On our paperwork we probably will, because if you think about it, like if the buyer's going to be paying their agent separately, so that's a separate line item, so they're going to have that money they're going to have to bring to closing. We look at our bottom line on our loan estimate to tell us how much money we need to verify that that buyer needs. So if that amount's missing, then you know I could see where that could create some confusion. Oh, he's supposed to bring this, but we've only verified this so we don't have to put it on the loan estimates. There's a good chance. We will. It will be. I think it has to be on the closing disclosure doesn't it, jonathan.
Speaker 4:So it will be on that. So it will change the process a little bit, just for us to have to keep in mind is the buyer paying his agent direct or is the seller paying it for him? Because it will affect that bottom line that they need to bring to closing. And it's not just as easy as saying, oh well, instead of needing 20,000, he needs 25,000. It's going to be oh, he needs 25,000. So we darn better verify that early on in the process or we're going to have problems at the end. So yeah, it will change some of the paperwork, a little bit of the process.
Speaker 3:Nothing major, but it could be major if we don't look at it yeah, I can see that at a closing and a bombshell be dropped on the buyer saying, oh, by the way, so all that really needs to be talked about up front. The buyer needs to be educated by the realtor that this is what this is going to cost. You know that needs to be paid so that when you guys are doing your job and helping that person get the loan, then you need to know that amount so that you can put it on the loan.
Speaker 2:And I think being sure that you educate them is huge, because it's a good chance it might be on our loan estimate and when it is, if you've not explained that as a realtor, that's going to put you in a really awkward situation because it's going to be disclosed on there in a dollar amount form so or likely will be, and you know so. I would be sure you're educating everybody up front, which I know most agents do, but be sure you're doing that up front so they know exactly what to expect and don't have any surprises there.
Speaker 3:Good point I mean this is really, this is so important, guys. I mean this is really why this podcast exists is to help educate and get the word out, especially with this um it's so important you have me here well, I agree, jonathan, it is, bring in the big guns
Speaker 4:as important as it is. It's really simple, but it really comes back down to communication. So if people are not communicating, this could get really complicated in a hurry. But as long as we're talking about it and we say, hey, let's do it this way and everybody does their part, this is easy. This is not bad. But it could be bad if it's if it's not communicated correctly.
Speaker 3:Absolutely, you know, and I think it all boils down to everything that we do. It's all about communication, and I mean our country's off the rails basically because people don't communicate anymore. So I think, steve, that's such a great point. Of course, now we've got the big guns here with us today.
Speaker 2:Not really, but I had to throw that in there.
Speaker 3:I love it, but it is, and that's like I said you guys, that's why you exist. I mean, you're professionals, the top of your industry. You truly care. People trust you, they value what you bring to the table and I just know that the realtors are going to really appreciate this.
Speaker 4:Yeah, and just so you know, I communicate better at work than I do at home. Yes, you do.
Speaker 3:I just thought I'd throw that out. I'm really good at my job.
Speaker 2:He is a good communicator here, but maybe that's because we're both guys and we just communicate better. But I don't know what it is.
Speaker 3:but I think that's the key. You guys are guys, so that's why it flows so well. You understand each other. Uh, yeah, at home I will have to say we, we've got some work to do, but it's okay that's for another podcast.
Speaker 4:That's a marriage 101, marriage 101 podcast.
Speaker 3:Yeah, we'll do a Marriage 101 podcast of lessons learned in 24 years of marriage I may be sick that day. Well, we'll have Jonathan here with us, so he can kind of keep us both on. There you go.
Speaker 4:We'll bring in the big gun for that one.
Speaker 3:Yeah, he'll keep us honest, he's around us enough to know when one of us isn't telling the truth.
Speaker 2:Absolutely.
Speaker 3:Oh gosh. So, Jonathan, we're going to kind of wrap this up. So this last question just about the underwriter Does the underwriter require a copy of the buyer's representation agreement for loan processing and approval?
Speaker 2:If it's not in the contract and it's going to be paid by the buyer, we're going to have to have something documenting that. So, yes, va requires it. I haven't seen anything on the other loan types but I'm sure that's to follow. But I've already been told by our underwriters we are going to have to have that. So, just because we're going to have to show where that money's going at closing and document that and that goes back to what Steve was saying earlier we need to have that on the beginning because if we can have that on the beginning, we'll have all the numbers right. Because what you don't want to do is not have it on the loan estimate. Get to closing, the underwriter thinks they need one amount and they need a higher amount. At that point the loan's going to have to go back to underwriting. It'll have to go out of the clear to close status, I mean. So it's going to be a lot of moving parts if we don't have that up front. So it's best just to go ahead and get us that up front.
Speaker 2:And that is something we're going to start, kind of reminding and asking for on the front end too.
Speaker 3:So yeah, I was going to ask you if that's kind of going to be in the process here at the office. Is having that reminder up front and center?
Speaker 2:Yes, yes, we have asked Christy to start following up and asking for that. But always be sure and send it to us if you have it, and then that way we know what it is. Or if it's in the contract and it's clearly laid out and you've negotiated it there, then we can have that and show it in that way. But we just have to have something showing who's paying and how much they're paying and what it's going to be, especially if it's our buyer.
Speaker 3:Yeah, and it just goes back to negotiating contracts. Right, this is important. Back to negotiating contracts. Right, this is important. It's a legal binding document and we got to daughterize and cross our T's more than ever, you guys are used to it because you've been regulated for years.
Speaker 3:I mean, I've seen Steve survive so many ups and downs. You've come in, survived ups and downs and we're in a market that's been very, very difficult. So this is new, but we'll get through it too. So it seems now that, more than ever you know, it's really important for agents and lenders to work closely together.
Speaker 2:It is yeah, and be sure you've got the communication line both ways, be sure you know if it's going to be disclosed or not going to be disclosed, because I say some of the bigger credit unions and banks will probably not put it on the loan estimate. And then you're going to have to explain to your buyer why it's going to be different in closing and substantially different, because when you add a commission in it's not just a few hundred dollars, we're talking thousands of dollars.
Speaker 3:And that's a huge difference.
Speaker 2:So you want to be sure you're explaining that up front.
Speaker 3:And it really goes back to you know, you guys, it's the concierge approach. You're constantly communicating, updating your client, the realtor and not many people do that and you're going to pick up the phone, call Jonathan. You're going to get Jonathan. Pick up the phone, call Steve. You're going to get Steve. It's not a robot after 5 o'clock, right. And then you even get you know someone to speak to you on the weekends. Not that we all want to work like that, but we just really, you know, want people to know that you know we're going to be there. Benchmark will be there for you to help you. So really it's going to. You're creating that win-win for clients and for realtors and for lenders to make a seamless experience. So just go back to what Steve said working together, absolutely All right. Well, thank you guys for being on today.
Speaker 2:Thank you.
Speaker 3:Anything else you want to add before we wrap it up.
Speaker 2:I think that's it. Just reach out to us if you have any questions or if there's something that doesn't make sense. Just reach out to us and we'll help you navigate through it.
Speaker 3:Perfect, all right.
Speaker 1:Thanks, let me navigate through it. Perfect, all right. Thanks, jonathan. Thanks, steve. This has been Benchmark Happenings, brought to you by Jonathan Tipton and Steve Reed from Benchmark Home Loans. Jonathan and Steve are residential mortgage lenders. They do home loans in Northeast Tennessee and they're not only licensed in Tennessee but Florida, georgia, south Carolina and Virginia. We hope you've enjoyed the show. If you did make sure to Florida, georgia, south Carolina and Virginia. We hope you've enjoyed the show If you did make sure to like, rate and review. Our passion is Northeast Tennessee, so if you have questions about mortgages, call us at 423-491-5405, and the website is wwwJonathanAndStevecom. Thanks for being with us and we'll see you next time on Benchmark Happenings.
