# Do real estate agents help finding financing?



## FarmerKat (Jul 3, 2014)

I was just reading through some older threads and I saw a comment that real estate agents have to obtain financing for a buyer. That reminded me that I was told the same by an agent we were interviewing to list a property with. I have been on the buying end several times and have NEVER been offered help by the listing agent (or buyers agent - worked with both) to secure financing. In fact, they would not even speak with you unless you showed up with paperwork showing that you are able to get financing. 

The only time I purchased a home where the seller facilitated the financing was when I purchased a brand new home, directly from the developer in a cookie cutter neighborhood. The developer either accepted cash or provided financing via their own/associated company. There was no real estate agent involved. 

I am just curious ... has anyone' real estate agent obtained financing for them?


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## Sourdough (Dec 28, 2011)

Most people do NOT understand agency. In fact many in the real estate industry do NOT understand agency.

Services to be performed are spelled out in the contract.

When you say, "Buyer's Agent"..........did you sign a contract that you employed someone to perform stated services for you.....as buyer.......???


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## FarmerKat (Jul 3, 2014)

Sourdough said:


> Most people do NOT understand agency. In fact many in the real estate industry do NOT understand agency.
> 
> Services to be performed are spelled out in the contract.
> 
> When you say, "Buyer's Agent"..........did you sign a contract that you employed someone to perform stated services for you.....as buyer.......???


Yes, I had a contract with a buyer's agent to find me a home. She did not list any properties, she worked exclusively with buyers. This was in 2000 or 2001 - different world that today. 

Still, it was not part of her service to help me obtain financing. I had to show that I was pre-qualified for a mortgage for her to show me any homes.

ETA: When it came up with the agent who said he had to find financing for the buyer, I was asking him if he was willing to negotiate his commission rate (we were considering of listing a property with him). He said no, that the 10% was firm and one of the reasons he stated was that he had to obtain financing for the buyer. It seemed odd to me because I have never encountered that before. When I sold a house through a realtor in the past, the agent who listed it did not do anything to obtain financing for the buyer but he did request that they show they were able to get financing when he received the offer.


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## Terri (May 10, 2002)

Our Real Estate agent showed us a place that we had called them about and then casually mentioned that a neighbor got financing through such and so bank. This was useful info because we were buying bare land and many banks do not lend on bare land.


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## arnie (Apr 26, 2012)

a good one knows the biz and can be of a great help . find a good one who is in it for a living lots will, lots are part timers wanting a commission for giving you directions to a home for sale avoid these like the plage . I talked to one of these when looing for a farm trusting her to call me if something came up for sale after a great place was sold I heard of it to late I called asking why she didn't inform me ,she just more or less shrugged the call off saying she may have been busy that month. my brother bought his home the sales person was there picking up his wife driving her to show propertys there at the bank and at closeing knew a good bank, a good lawyer,insurance , he earned his healthy commission . he was a pro not just a hobby person .careful who you trust with such a big choice and amount of your money


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## FarmerKat (Jul 3, 2014)

Terri and arnie, I agree that good agents who know their area can provide good referrals for banks, insurance, etc. But saying "this bank finances raw land" is not the same as "obtaining financing for the buyer". For example, say a certain bank finances raw land but requires a 25% down payment. If the buyer does not have 25% down, referring them to this bank will not "obtain" financing for them. If the agent claims that the commission pays for their time to obtain financing, IMO that means that the agent will spend time looking for a lender that will finance it for this particular buyer (given their down payment, credit score, etc.). 

We recently purchased some real estate and we paid cash. The listing agent (we did not have a separate agent) asked for a bank statement to show we had the funds to purchase the property. IMO, he verified we had the funds. He did not obtain the funds for us.


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## Jlynnp (Sep 9, 2014)

While we had already arranged our own financing our Realtor did offer suggestions for other lenders if we wanted to use them.


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## Declan (Jan 18, 2015)

I've known it to happen, but it is unusual unless the seller has already expressed interest in owner financing. I know one couple pre-recession who had to borrow from a Century 21 affiliated lender because their credit was atrocious and about 1/3 of their payment was for PMI and their interest rate was obscene. The market soared and they were able to refi a few years later just before the crash, stripped out the $25K added value since when they bought it due to the churning when they did, and then walked away after the crash.


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## cfuhrer (Jun 11, 2013)

In our experience, if you don't have financing in place first an agent will show you a property, but not enthusiastically and not without you convincing them that you already know what you're looking for and you know what your price range is.


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## Declan (Jan 18, 2015)

cfuhrer said:


> In our experience, if you don't have financing in place first an agent will show you a property, but not enthusiastically and not without you convincing them that you already know what you're looking for and you know what your price range is.


I never ever ever tell a realtor my price range. Everybody I know comes back with the same thing, "There are properties out there in my range, but my realtor won't show them to me. They keep showing me more expensive property." I never use one on my side, but I have always been amazed at the seller realtor always trying to fish that information. I guess they think if they know my range they can not move on the list price.


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## po boy (Jul 12, 2010)

FarmerKat said:


> Yes, I had a contract with a buyer's agent to find me a home. She did not list any properties, she worked exclusively with buyers. This was in 2000 or 2001 - different world that today.
> 
> Still, it was not part of her service to help me obtain financing. I had to show that I was pre-qualified for a mortgage for her to show me any homes.
> 
> ETA: When it came up with the agent who said he had to find financing for the buyer, I was asking him if he was willing to negotiate his commission rate (we were considering of listing a property with him). *He said no, that the 10% was firm and one of the reasons he stated was that he had to obtain financing for the buyer. *It seemed odd to me because I have never encountered that before. When I sold a house through a realtor in the past, the agent who listed it did not do anything to obtain financing for the buyer but he did request that they show they were able to get financing when he received the offer.


 I am retired and brain dead, but I believe it is illegal for a real estate agent be compensated for obtaining financing.


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## Belfrybat (Feb 21, 2003)

I currently have a property up for sale and the RE agent I listed it with said he knows of several sources for financing and will work to help the buyer find a mortgage. I wouldn't have listed it with an agent who wasn't willing to help buyers finance it. The help is basically to refer to various financial institutions, not to actually hold the note himself. The RE commission in Texas is 6%, no matter how good or poor the agent is. So it pays to shop around and find a good one.


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## Mish (Oct 15, 2015)

We have used a straight Realtor for one home, and an actual buyer's agent for another. The Realtor didn't help with financing, the buyer's agent offered help but we didn't need it (she had some mortgage brokers she works with all the time and gave us referrals, but we went with our credit union).

The buyer's agent was extremely knowledgeable and helpful - finding houses for us to look at, calling some people that didn't even have properties listed to see if they were willing to sell, sat through all the financing interviews with us, went and sat in on the closing with us and read over the contracts before we signed, etc. The Realtor...eh, not so much. We just had her unlock the boxes for us after we found the houses we wanted to look at. She put in our offer and we never heard from her again after the seller accepted.

I think there's a big difference between the two, as a buyer. Buying, you definitely want a buyer's agent, and they should do pretty much everything for/with you. As a seller, we gave our listing to the buyer's agent (contracted as our listing agent, this time) and she was just as amazing selling it as she was getting it for us in the first place  All boils down to finding a good one, take your time and do it right on either side of the buying/selling, IMHO.


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## edcopp (Oct 9, 2004)

Declan said:


> I never ever ever tell a realtor my price range. Everybody I know comes back with the same thing, "There are properties out there in my range, but my realtor won't show them to me. They keep showing me more expensive property." I never use one on my side, but I have always been amazed at the seller realtor always trying to fish that information. I guess they think if they know my range they can not move on the list price.


Most realtors do not want to waste their time on a looker who could not get financed for a Big Mac without a co signer. Frankly you sound like one of those. You may not be, you may be wealthy. But I doubt it. Everybody seems to know somebody, who knows somebody who got a real deal on a land contract with nothing down and no payments for six months. Those deals are few and far between. Good luck.:smack

When there is a doubt why not show the realtor where your money will be coming from? This is only logical.


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## edcopp (Oct 9, 2004)

po boy said:


> I am retired and brain dead, but I believe it is illegal for a real estate agent be compensated for obtaining financing.


Not dead, just poorly informed.


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## Declan (Jan 18, 2015)

edcopp said:


> Most realtors do not want to waste their time on a looker who could not get financed for a Big Mac without a co signer. Frankly you sound like one of those. You may not be, you may be wealthy. But I doubt it. Everybody seems to know somebody, who knows somebody who got a real deal on a land contract with nothing down and no payments for six months. Those deals are few and far between. Good luck.:smack
> 
> When there is a doubt why not show the realtor where your money will be coming from? This is only logical.


Well you are definitely full of assumptions. Too bad you are lacking on a great many facts.


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## Bellyman (Jul 6, 2013)

I showed my realtor my pre-approval letter. I wanted him to see what I could qualify for in black and white. He has showed me properties all the way from $40k under that number to about $20k over. He knows as well as any of us that an asking price is just an ASKING price and often, it can be negotiated lower. How much, no one really knows until they ASK. But he does know how far I can go and knows that that's it, there ain't no more.

I do find that there are an awful lot of listings on the market where the prices are really not realistic. They might have borrowed so much that they have to have that amount to get out from under it but that doesn't mean I'll pay more than a property is worth just to get them out of their mess. Sorry, but a property is worth what a buyer is willing to pay for it. 

Last week, I made an offer on a place. It's been listed at $110k for something like 450 days. It's got serious problems. It's a cobbled together house with very substandard electrical, very substandard plumbing, a home built sand mound for a septic system (definitely not legal), and sits on a property that's half swamp and rock outcropping. There is a bit of ok siding slapped on and a pretty new metal roof enclosing the house but it's still a HUGE pile of work for someone who really wanted it to be a decent home. I could fix it. My offer was $70k. That's about all it's worth to me. I've seen it. I've looked in attic, under the floor, I've talked to septic installers and electricians. I have an idea of what needs to be done. I have an idea of what could be. I also know what some of that stuff costs even if I do much of it myself. It's just not worth $110k. Anyway, hope they enjoy sitting on their property another year. 

I've also seen "errors" show up in listings that "accidentally" increase square footage. Looking at one right now that's listed at nearly 1900 square feet that would have to have almost 900 square feet of hallways, bathrooms and closets to get to that much. Just doesn't quite work. 

Passed on a property last week that I took another look at. This past summer, it was being pitched as having $40k of timber on the back of the property. Had a friend of mine who has done some logging have a look with me. There -might- be $4k of timber, and I'd end up splitting that with the logger. I don't know if the owner really thought his scrubby little woods was worth that much or if I was just being "sold". Either way, it didn't fly... and I didn't bite. (It's priced at $150k. It's probably worth about $90k. Cute little house. If it really had that $40k of timber, it would be priced a lot closer to right.)

T'ain't easy... (sigh)


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## Declan (Jan 18, 2015)

Bellyman said:


> I showed my realtor my pre-approval letter. I wanted him to see what I could qualify for in black and white. He has showed me properties all the way from $40k under that number to about $20k over. He knows as well as any of us that an asking price is just an ASKING price and often, it can be negotiated lower. How much, no one really knows until they ASK. But he does know how far I can go and knows that that's it, there ain't no more.
> 
> I do find that there are an awful lot of listings on the market where the prices are really not realistic. They might have borrowed so much that they have to have that amount to get out from under it but that doesn't mean I'll pay more than a property is worth just to get them out of their mess. Sorry, but a property is worth what a buyer is willing to pay for it.
> 
> ...


I'm a little surprised you bother with a buyer's agent being able to see what you see in a property and being pre-approved.

Yes even in our area there is a noticeable divide in prices as to what should be comp houses. The foreclosure thing is still lingering heavy and some lenders are just giving away equity to be rid of it. 

There is a house in my neighborhood I have been toying with buying. It is listed at 50% assessed and is in good shape and still is sitting. It is probably over-assessed some, but not much. They only thing I don't like about it is that it is a small lot and has a tall stand of trees close to the property line that would require buying the adjoining lot and paying a lot of money to a guy in a bucket truck just to help protect it from falling timber. That would eat into the deal quite a bit. 

Houses built in the 80's are now "old homes" which makes them less desirable to HGTV-watching hipsters who want the latest trendy updates, but it would be a good rental but for those trees.


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## Bellyman (Jul 6, 2013)

I think the main reason I deal with the person you describe as "buyers agent" (I haven't signed a contract, he's just the kind that has stuck with me where most have just dropped off the face of the earth after showing me their pet listing) is because he's become an easy go-to person when I want to know something that I don't have access to online. He can easily tell me things like how much the owner owes on the property, which can tell me whether they would be upside down with a particular offer, that kind of thing. He has access to more complete information that I can see on the typical realtor's website. He often has some insights for neighborhoods that I still lack because he's been here in the area longer than I have. I appreciate those things. 

Since there is no contract with him, if there comes a time when we need to part ways, we can, no muss, no fuss.


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## Declan (Jan 18, 2015)

Bellyman said:


> I think the main reason I deal with the person you describe as "buyers agent" (I haven't signed a contract, he's just the kind that has stuck with me where most have just dropped off the face of the earth after showing me their pet listing) is because he's become an easy go-to person when I want to know something that I don't have access to online. He can easily tell me things like how much the owner owes on the property, which can tell me whether they would be upside down with a particular offer, that kind of thing. He has access to more complete information that I can see on the typical realtor's website. He often has some insights for neighborhoods that I still lack because he's been here in the area longer than I have. I appreciate those things.
> 
> Since there is no contract with him, if there comes a time when we need to part ways, we can, no muss, no fuss.



Okay, then referring to them as "my realtor" is misleading because he isn't your realtor. The only difference the seller being upside down to you is that the lender has to approve the short sale which can drag things out depending on who that is. Other than that, your bank is not going to lend you money on property for more than its worth unless you put up a bunch of extra collateral.


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## simi-steading (Sep 27, 2012)

I always get pre -approved before I go looking.. That way I know I won't be wasting my time looking at things I can't afford much less other people's time.


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## Declan (Jan 18, 2015)

simi-steading said:


> I always get pre -approved before I go looking.. That way I know I won't be wasting my time looking at things I can't afford much less other people's time.


That is not a bad idea if you are uncertain.


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## simi-steading (Sep 27, 2012)

It's not just about if you can get a loan or not, but more of "how much can I get..." on top of what percentage they will want for a down payment and what you can really afford.

If you haven't gotten your finances sorted out before you go looking, you're not doing much more than wasting your time, because you don't know what kind of price range you're really looking at....

You don't find something then try and figure out how to pay for it... That's a great way to become discouraged..


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## tree-farmer (Jul 5, 2015)

I was told by my bank my mortgage had been approved and a week later or so I was talking to them again and they said it was not approved and someone had made a mistake. They wanted me to take out a business loan at a higher rate of interest than the residential loan we had discussed.

My real estate agent talked to a mortgage agent at another bank and we set up an appointment. I was approved through them pretty much right on the day of the dealine. It was stressful because I really wanted this place and it felt like the deal was going to fall apart. But it all worked out.

Buying a home for the first time is a weird experience. It's hard to know what you're doing without having been through it before, and it's probably the biggest purchase you'll ever make. My real estate agent was great. Really helped me out through the process and his negotiating really saved me some money.


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