Go to the Right People

I recently heard an ad from a large mutual fund company that talked about need to go to the right people. Variously, they extolled the virtue of a personal trainer, a dog trainer, a neighborhood auto mechanic, a masseuse, a travel agent, and an accountant. I wish they'd said real estate agent and lender too.

The fact is that getting help from experts is frightfully important these days. The world has become nichified. Certainly you know your niche and those who are not in your niche don't know what you do. But once you leave your niche, usually you are in trouble. That's why, from personal trainers to accountants, there is a need for experts, people who know about their niche from and are in the business of helping others. Sadly, it seems that many people don't think that getting help with mortgages and real estate is all that important.

The reality is that most people are still baffled by acquiring or refinancing a home. A recent survey showed that 62 percent of those interviewed said that they were mystified by the mortgage process. My strongly held opinion is that at least half of the remaining 38 percent were mystified too. They just didn't know enough to know that they SHOULD have said they were mystified.

I have seen people buy or sell a home on their own, that's OK, but when they have to deal with the many little details of closing, they panic, and rightly so. There are laws in every state that govern every aspect of a transaction, and if you don't know them, you will make mistakes. Usually what happens is that they expect some title company or escrow person, or me, to help them get it straight, and provide that service for free.

I have done over 4,000 transactions in my career and I still get surprised by things, although not that often. I have also seen people who get into the business and it takes them a year or two before they are up to speed and able to help their clients. Yet in this 1-800 world, many people who answer the phones at real estate company or a mortgage lender may have only been in the business for a few weeks. How much can you learn in a few weeks?

The answer, or course, is not enough. Some kid making barely more than minimum wage does not KNOW anything and cannot give you anything other than scripted answers to your questions. Sadly, the scripts may not exactly cover what you want to know so that's no help at all.

Not only that, it's getting worse. Under the laws of many states, including California I am sorry to say, mortgage banking companies leaned on the state legislature to change their regulatory agency from the Dept. of Real Estate to the Dept. of Corporations. No big deal, you say! Wrong, because it also meant that their employees did not have to be licensed. Bingo, all the DRE licensed loan officers were out the door, replaced by kids who would work for much less.

Not only does the real estate process have a lot of moving parts, as I like to call them, but many so-called professionals actually try to disguise what is going on. Their intent is to deceive their clients. Obviously, this is diametrically opposed to what the client expects, that the professional will look out for their interests, to protect them.

In the real estate business you generally have agents in a large company and the manager at the office will, in fact, watch transactions to make sure all the rules are followed. They aren't necessarily looking out for the client, just making sure that they are in compliance with all the legal stuff so they don't get in trouble. The client will get some benefit from that oversight.

In the mortgage business, it's even worse. In this case, the entire mortgage company may be dedicated to maximizing the dollars they can take out of the customer's wallet. They actually encourage their employees to deceive the customers with low quotes and low-ball Good Faith Estimates to encourage the client to apply, then sock it to them later in the process.

My point here is that you ought to be looking for experts to help you, and it is critically important to find ones who are honest and trustworthy. That kind of expert will make sure you get educated about the process and will help you make important decisions on the basis of what is best for you.

Be very careful out there.