Is Working With Your Realtor's Recommended Mortgage Lender A Good Thing

In this episode, Jennifer talks about whether to work with your real estate agent's recommended mortgage lender. She covers the pros and cons, highlighting red flags like agents insisting you *have* to use their lender – often tied to illegal kickbacks. Jennifer explains why she built her business independently, prioritizing client interest. Learn how to ensure your chosen lender truly works for you, not the agent, and how to spot "mortgage steering" to protect your home-buying interests.

Transcript

SPEAKER_00 0:00

Today, we're gonna talk about whether you work with your real estate agent's recommended mortgage lender. I'm gonna go over the pros and the cons. Now, if you guys are new to this channel, I've been a lender for 19 years. I started off as a local lender in California who got 90% of their business from real estate agents. It's only within the last six to seven years that I completely switched my business so that the bulk of my business comes from past clients, as well as YouTube, Instagram, Reddit, TikTok, you name it, I'm on there talking about mortgages. The reason that I switched my business to working just for you guys is because I never wanted any blurred lines. I wanted it to be clear line in the sand, I work for you. Okay? But that's not the norm in the most of the country. So we're gonna be talking about pros and cons as well as what you need to watch out for up front. Now, first of all, can a real estate agent tell you you have to work with a lender? No. If a real estate agent ever tells you you have to work with a lender, or let's say you select a lender, they won't talk to them, they won't respond to their emails. It is a red flag. It is such a red flag, I can't even tell you. And you're like, well, they just want what's best for me. No, when real estate agents act like that, nine out of ten times they're getting a kickback. It's that simple. If you guys want to see the darker side of real estate, Google this. These are the exact search terms. Mortgage steering, S-T-E-E-R-I-N-G, class action lawsuits. Plural, guys, plural. There's a bunch of lawsuits around the country going on right now. And the allegations are that, and it's multiple mortgage companies, that these companies incentivized real estate agents to give them business. They offered them something of value. That's illegal, okay? And that's the thing. The reason it's illegal is because it harms the home buyer. You're trusting the real estate agent that if they're recommending someone, it's because they have good experience with them, the lender has good rates, they're trustworthy. If you knew, oh my gosh, they're just recommending me to that lender so that they get more leads, you'd be like, wow, that's messed up. Mm-hmm. And look, it's not always at a great scale like these lawsuits. We've been seeing this type of behavior in the industry for years. I've had so many real estate agents approach me over the years and say, hey Jen, I really like what you're doing. If you want to pay for my marketing, I'll send you all my clients. No, like, hey Jen, I like what you're doing. I'd love to learn more about your business to see if we could be a good fit. They just want money. They just want money. And look, part of the problem is there's real estate coaches that have advised real estate agents to do this with lenders. And what it does is it perverts the whole transaction because you need to be recommended to a lender because they're good, they got good rates, low fees, and they're gonna take care of you. That's why. Not because the real estate agent is getting something of value. So look, if they're trying to force you, if they say have to, all red flags. And what you need to recognize then is that you need to get away from that real estate agent. If you're not in contract yet, I would get out of your buyer's agreement. Personally, this is my personal opinion. If I had a real estate agent that told me I had to work with their lender, even if I had come prepared with, let's say, a Jennifer Beeston who you can easily verify, right? Thousand plus five-star Google reviews, like vetted. And they say you have to go to their lender, oh my God, I would dump in them a heartbeat. Here's why. It's not just about the lending. If they're gonna push you to something and ignore what you've done, they're gonna do that throughout the transaction. Who knows if the home inspector they recommend will be good or will be because they act like they're blind when they go through the house, right? If they're doing that up front, just get out. Now, let's say that they're not saying you have to, but they're recommending some lenders. I think that's fine, guys. I think you should always talk to a lender that is totally independent of the real estate agent. And the reason I say that is that unfortunately, there are some lenders where all their business only comes from specific people. So they have to do what those people want, regardless if it's in your best interest as the client. I got into it a couple years ago pretty aggressively with a real estate agent. The client had come to us directly, and the agent, the house had black mold. We weren't gonna close on the house with black mold, the client still wanted it, so there was a whole process of getting it remediated, tested, tested, tested, right? To make sure it's safe. Common sense. The real estate agent was trying to get a hold of the CEO of my company because my lender would have just ignored the black mold. Oh my god. Because that lender depends on her for business. I didn't, I don't, I never will, so I was able to raise my hand and say, uh-uh, we're not doing this. This is not in the client's best interest, this is not in the best interest of the bank. No. And we got it all fixed, we got it remediated. It cost the seller a lot more than they wanted it to, but guess what? The client moved into a house without black mold. Okay, that's why you want to make sure that when you're selecting lenders, you have at least one that is independent that can be the voice of reason to be like, uh-uh, no, no, no, let's not do this. Okay. Now, let's say they gave you a couple recommendations. Could you call them? Sure, sure. Look, here's the thing: I think about my dear friend Julie. Julie is a loan officer in Oregon. She has been a loan officer for 30 years. She was one of my original mentors. She's fantastic. When I get a loan, I use Julie, okay? She's not local to me, but I use her because she's a talented loan officer. And lots of real estate agents in her market recommend her. And she is a true asset for the client when she is recommended. So I don't want to sit here and be like, no, ignore your real estate agents' recommendations. Because the bottom line is some real estate agents are recommending really good talented loan officers. On the whole local part, you know, there's certain markets where if you have a really good local loan officer, it may give you more weight in getting your offer accepted. However, as long as the loan officer that you work with is super vetted, meaning they can show reviews, they can show rankings, they have an established track record, you'll have the same response. Because the dark side of local lending that people don't talk about, what if they don't like the lender? Mm-hmm. There's certain parts of the country, I want to name it so bad. Oh, I'm not going to. But there's one part of the country where it's like the real estate agents, the mortgage lenders, it is like desperate housewives over there. It is crazy. Like the amount of intrigue everybody has on each other. So there's like some real estate agents where if it's a certain mortgage lender, they won't accept the offer. Doesn't matter what your offer says, they have beef with them from 20 years ago. It's nuts. So in certain cases, the local lender can help you get your offer accepted, but in other cases, they could actually be a problem. Going with someone that nobody knows, as long as you can vet them, there's no feelings about it generally. So look, I think that sometimes real estate agents recommend really good loan officers. I do. I think that as the client, you should talk to a couple different loan officers if you haven't found one you like. I think that if like we hit this sometimes where someone's like, Jen, you've already fully underwritten me. The real estate agent keeps on pushing me towards their lender. I'm not really comfortable, but I don't know what to do. It's simple. You're not comfortable. Don't work with someone on a loan that you're not comfortable with because the real estate agent wants you to. Period. Period. This is your decision. And ultimately, you need to make sure that the lender you're working with has your financial interest at heart and has they're looking out just for you. They're not trying to pay the real estate agent for leads and you're getting a higher rate because of it. They're not doing whatever the real estate agent wants, even if it's not in your benefit, because they're desperate and scared they're gonna lose their lead source. The mortgage lender works for you. So just remember, guys, you have power. Questions, comments, as always, feel free, feel free to reach out. 786 933 2077. Thanks for watching.