Dan green wrote a great post title the Tangible Difference.  Read it.  Here's my version for a real estate agent.

1. example of "market coverage" of a "bigger firm" (waterfront and beacon hill examples).  Hmmm, they also have many more expireds in that area....what if you turn out to be one of them....

2. beware of the hard sell presentation - if everything the broker tells you confirms what you think, then either you should be in the business or they are blowing smoke up your ass.  A true professional will not just tell you what you want to hear, but tell you what you need to know.

3. If any agent says they can take your home, get the paperwork signed, and go active with the listing all in the same day then THEY ARE NOT MARKETING YOUR HOME.  Sorry for yelling, but this point pisses me off.  It takes weeks to properly prepare a thorough marketing plan (link to plan download) not 3 hours and an MLS listing.  I can't believe their was a seller who had a shell space that expired with another broker, and interviewed us for the job, but decided to go with another broker.  that other broker DIDN'T CHANGE A THING from the previous marketing effort.  We told her it would take two weeks to prep 3d drawings of the built out space, plus have contractors in for work plans and estimates so buyers could see the cost of building out the space.  AKA we were offering real soultions and marketing that would take time....

4. Most people have never had a good experience with a real estate agent but that just don't know it.  Most agents are interested in appearing to do the most business by slapping listings into MLS as fast as possible, but they really are doing anything that's worth anywhere near $20-30K!! 

 

 

 

The Tangible Difference That A Good Loan Officer Can Make

 

Here's a secret about rate shopping: all loan officers worth their salt give "great rates" because, otherwise, we'd be out of business.  Most mortgage rates are a commodity, after all, so their levels are set by the market - not by the lender.

This is why home buyers would be well-served to get past "rate" and get onto the important stuff like choosing a responsible mortgage product, or choosing an appropriate structure.

When we get past the rate part of everything, it becomes clear that it actually matters from where a person gets those "great rates".  This is because in the mortgage business, there's a well-known math formula:

(Great Rate) + (Poor Mortgage Structure) = (Financial Failure)

Now, to be candid for a minute - if you've never had a quality mortgage experience, this formula reads like a complete crock, I know; structure is silly, right?  Well, I understand that line of thinking so let me add an objection-killer to the mix:

Getting responsible mortgage planning advice comes at the same interest rate and with the same loan fees as getting no mortgage planning advice.  And most times, it gets delivered for less.

People often overlook this point, thinking that loan officers are like lawyers, where more skill means a higher the "bill rate".  This is false - it actually works the other way.  Truly great loan officers understand that the client-servicer relationship is a long-term one whereas struggling loan officers just "needs to make money fast".

The expert doesn't charge you more for his time because it's not the deal he's after - it's the relationship.  The expert knows that you'll need 8 mortgages or more in your lifetime and he wants to be the first phone call that you make on all of them; the average loan officer only focuses on the first one.

It's a counter-intuitive twist, but people usually get better advice at lower prices from experts than from run-of-the-mill loan officers.  Remember, the experts don't have to pump up rates or fees to be profitable - they have their big book of clients that assures them of it.

And so, just like that, we've changed the math formula we look at earlier to something better:

(Great Rate) + (Sound Mortgage Structure) = (Better Outcomes)

Now, for an added twist on the math, remember that "rate" and "structure" are only two parts of the mortgage process.  They're two important parts, of course, but they're not the only parts.  There's also what happens after the rate and structure are set.

And strangely, for as important as interest rate is to a lot of people, many of them tend to forget what their rate is shortly after locking it in.  Instead, what they remember most from their mortgage is the process and what happened after their rate got locked.

Author's note: Next time you're with friends, you can test this theory.  Ask a homeowner about their mortgage rate and they'll fumble.  But, ask them about their mortgage experience and then watch what happens.

• Were phone calls and emails returned immediately?
• Were regular status updates delivered to everyone involved?
• Did the money show up in time for the closing?
• Did the final mortgage terms match the original agreement?

It's the answers to questions like these that define a person's mortgage experience.

In another way, comparing interest rates between lenders is like comparing menus between restaurants - you never know how good the food really is until after you've eaten.  It's no wonder that trendy restaurants fail at such a high rate; it's for the same reason that loan officers do.  All packaging, no product.

So, because rate and fees are generally within a tight range from lender to lender, it tells us that home buyers may be better served to shop for expertise instead.  And if you're not sure whether your loan officer is an expert in his field, chances are, he's not.

Expert loan officers will often give better service at a lower cost than their peers, and they'll also give you piece of mind for a smooth closing.  And in the end, it's the latter part that matters most - the lowest guaranteed rate doesn't matter a bit if the money never shows up at closing.

 

 

-Dan Green