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Realtor Roulette: How Should A Mortgage Broker React When Client Ditches Realtor?

By
Mortgage and Lending with Platinum Home Mortgage Company NMLS #238304

Early in my career, I was fortunate enough that a well-established local Realtor referred me a teacher, who was also a single mom, seeking to buy her first home. To say I was thrilled and flattered would be an understatement. Realtor knew I was somewhat new to the business, could have chosen one of the proven horses in her stable, but took a chance on ME.

Seriously, I wanted to send her flowers, but tried to contain my enthusiasm at having the opportunity to impress one of the top producing Realtors in our area.

Luck continued to smile on me as I met with teacher, bonded immediately, and realized she had good scores and enough income to qualify. I produced one of my first pre-approval letters and sent it to the top Realtor that very day, thanking her once again.

Silly me. I thought that all systems were go for an offer to be written by the top Realtor, on a condo that teacher had already seen with her.

Imagine my shock when teacher calls the very next day to tell me she has decided to ditch top producing Realtor for a different Realtor she has found on the Internet. Why? Because, in thinking it over, she preferred to work with a Realtor who had formerly been a teacher.

"This won't be a problem, will it, Janet?"

Well, YES, lovely teacher (who really does not understand this completely). It presents a huge problem for me. My mind whirled. She had no intention of calling top producing agent back, she was embarrassed. She asked me to do it.

 

I considered my options and wondered:

 

1. Should I refuse to do the loan out of loyalty to my Realtor?

2. Should I continue with the loan, but offer some kind of compensation to the Realtor? (Wait....isn't that against the law??) What would make up for losing this sale?

3.  Should I try to convince client to go back to top producing Realtor?

4.  Should I NOT call Realtor at all and insist that teacher do it?

5.  Should I call the Realtor and tell her she has been ditched? Won't I somehow be guilty by association?

6.  Should I call Realtor and say there is a problem, please call the teacher immediately?

 

What do you think? If you were the Top Producing Realtor, taking a chance on a new mortgage broker, would you hold her responsible? Would you ever send her another one of your clients? And how is this situation best handled, in your opinon?

 

Written by Janet Guilbault, Mortgage Lending Expert Based Out of the San Francisco Bay Area

 

 

Comments (29)

R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

I agree whole heartedly with Glen above!  I couldn't have said it better. 

I have had this sort of thing happen to me before as an LO and the reactions have been all over the board.  From "no hard feelings" to "what did you do to piss her off at me!".

I've also had the flip side happen when "I" referred a buyer to an agent who then tried to talk "my" client into going with the lender that was affiliated with their company.  For that, I was pissed!

 

Bob Mitchell

ValueList Real Estate Services, Inc.

Jul 01, 2008 08:10 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Mmmm.  Didn't we have a long "conversation" some time back about why I don't take referrals from loan officers??

Jul 01, 2008 09:20 AM
Frank Marta
Nuhome Mortgage - Houston, TX
Texas Home Loan Specialist NMLS#: 245813

I as a LO have been put in this position before too!!!!! It is not easy but the only thing you can do is tell the client that you work with the Realtor and your a team and they should call the Realtor to either continue ( I strongly recomend that they stay with the Team) or not...  I will not compromise my relationship with the Realtor for one closing........  If the client calls the agent and tells them that they don't want to continue with them then and only then can I continue with there Loan...

I know that it is kind of tough but I want someone covering my back so I must do everything possible to keep the client with who sends it to me (Refferal Source)......

Jul 01, 2008 09:35 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Janet, That would be a difficult position to be placed in. But really what can you do? As the MB I would just pick up the phone and call the REALTOR(R) and explain things. As the REALTOR(R) it wouldn't bother me at all. I'd just call the buyer to find out why she was changing agents and if I couldn't convince her otherwise I'd just wish her good luck and forget about it. No biggie.

Jul 01, 2008 10:03 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Lenn: We did have that conversation. That was a long time ago....or seems like it anyway.

 Are you saying that by accepting referrals from mortgage brokers that you are leaving yourself at risk for situations as described in this post....?

If I remember right, one of the reasons you don't accept referrals is you are then "stuck" with that lender, and you don't want to be stuck with an unknown...

I do respect you for this, Lenn, especially that you are able to generate so much business that you can say NO to referrals.

 

Jul 01, 2008 10:11 AM
Zachry Feuer
eXp Realty - Denver, CO

Janet, It was no fault of yours or the Realtor. I would just have her call her buyer to get the explanation. In all honesty while we all do not like to be turned down, it is bound to happen. I would certainly not expect for the Realtor to hold it as a reason to not refer more business to you. The reason why she chose to use you, new or not, was because she felt you could get the loan done. I would send her a thank you and a gift at the close of transaction. Since she referred you, that should still impact how she looks in the clients eyes that she lost. You never know where that relationship may go down the road. Realtors always like loan officers that close! Thanks for the post. Hope that it all turned out positive.

Jul 01, 2008 10:12 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Bryant: Win a few lose a few. Whenever I wonder how to handle a situation with a Realtor, I always try to remember what I have learned from all the AR Realtors: ABOVE ALL: Let the Realtor know what is going on as soon as you have the info.

I think if you just do that one thing, all the time, you are giving them what they want more than anything else: timely info.

Jul 01, 2008 10:36 AM
Janet Guilbault
Platinum Home Mortgage Company - Walnut Creek, CA
San Francisco Bay Area Direct Mortgage Lender

Zach: It did not stop the Realtor from sending me business. Something else did. Maybe I will blog about it in the future: When the Realtor ditches the Mortgage Broker.

I think your suggestion shows alot of class.

Jul 01, 2008 10:43 AM
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

Sounds like a problem between two agents, not you as a mortgage expert.  I'd keep out of it and just do the loan.

Jul 01, 2008 01:23 PM
Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

This happene to me last month.

And the client even tried to ditch me a week later.... until the new realtor convinced her that the other lender was full of it.

I spoke to the referring agent about it right away....

Bad spot to be in.... but I have learned to align myself with PROFESSIONAL realtors that view me as a partner in the Real Estate transaction..... not a service provider..... which tends to make the tough conversations easier.

So, while the Realtor wasn't real happy... she did understand that I did all that I could do to save her deal.

I would have been messing my pants too if this happened early in my career.

 

Jul 01, 2008 03:58 PM
Anonymous
Doug

I ditched my MB by going over to her office, looking her straight in the eye, and telling her why. I could get a better deal elsewhere, and took the risk of it falling through which I acknowledged. She said she understood, and we went our separate ways. The deal closed with the new MB, everything was copacetic, and I saved a ton of money. I did give her a chance to match it, which she could not remotely do, so I don't feel too bad.

Jul 02, 2008 07:52 PM
#20
Alan 'AJ' Nisen California Contra Costa Mortgage Officer
A Large Bank in America - Lafayette, CA

Janet, this post got by me when you wrote it.  So, I am a day late.  But I agree with Lenn and from personal experience.  Biz is Biz.  You have to be honest.  Call the realtor, be honest and have them call the client.  Professionals understand.  And it happens the other way too. AJ

Jul 05, 2008 06:51 AM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

Janet,  I am here because of the Mortgage Week in Review, by AJ.

I have a close relationship with my lender, sometimes it works out they stick with her and not us.

Sometimes they stick with us and not her.

It is all in the relationship, we respect each other and sometimes it is out of our control. She lets me know, I let her know. No biggie.

I would call her and explain and keep the conversation going.

Jul 06, 2008 03:29 PM
Thomas Hargreaves
TriStar Financial Services - Eugene, OR

I agree, I would call the realtor and just tell her to call her client.  Let the client break the news to her, then if the realtor wants to discuss it further they can call you.

Jul 10, 2008 09:02 AM
Robert Lowery NMLS 211598
Prosperity Mortgage - Perry Hall, MD

This is a tough situation...I usually contact the realtor and advise them immediately.  Its really tough if the relationship is new, but I would let the realtor make the choice...and I would ask them if they want you to walk away.  I don't suspect most would ask you to walk away from the deal, but if they want you to walk away....and you want to get more referrals and earn their trust, you better be prepared to walk away.

Some of these assume a close relationship.  Its a no brainer when you have a relationship.  Its tougher when you are in the beginning stages like you were.

Nice blog Janet.

Jul 11, 2008 01:59 AM
Margaret Mitchell
Coldwell Banker Yorke Realty - York, ME
Seacoast Maine & NH Real Estate

Hi Janet - What an interesting post.  I liked Bob's suggestion.  I can't imagine a Realtor asking you to dump the client but I think they might appreciate the offer.  I read all of the comments and if I read correctly, you postulated certain situations but did not say EXACTLY what you did.  Where did you come out?

And btw, in general, no, I would not hold the mtg officer in anyway responsible UNLESS the other agent had an ongoing relationship with the mtg officer.  In which, case, I wouldn't know what to think.  I would not assume but I would wonder about it.

Jul 12, 2008 01:11 AM
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV

Janet--- This has happened to me five times in my career.  

In each and every case, I called the original referring agent to warn them to try and save their relationship and ask them what they want me to do.  

In each and every case, they said "thanks for the heads up!  no problem!  do the loan!"  

In each and every case, I lost them as referral partners.

It is the absolute most difficult position to be put in as a lender with real estate agent referral partners.

Jul 13, 2008 02:25 PM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

I've had referrals from loan officers who later asked me for other loan officer's names to 'compare' pricing and packages.  I have told them that they would have to do that on their own because this was a referral from that particular loan officer.  They have then selected another and still wanted me to represent.  I phoned the lender and had them phone the Buyer so that the lender could have a chance to 'compete' with the other one AND to get the explanation straight from the horse's mouth!  I still represented the Buyer and the lender has referred even more business to me because I had no control over what the client did and the lender understood that.  I think you should have the agent phone her 'former' client and you should move right along as this is not your fault that the Buyer has decided to make an agent change midstream.  Best of luck with this!

Debe in Charlotte 

Jul 14, 2008 01:31 AM
Anonymous
Al Melvin

This has happened to me twice as the referring Realtor; but it is no reflection on the mortgage broker.  I still refer business to them because of their proven high ethics and above-average customer service.

There are many unscrupulous folks in and around our industry; and the fact of the matter is, the customer is not always right.  But, it is always the customer's right to select who they will do business with.  After all, I reserve the same right for myself in dealing with others.  Sometimes, their reasons for the choices they make are frivilous, irresponsible, or, downright stupid, immature and offensive; but that's no reflection on me or my chosen mortgage broker.  Painful though it may be, I benefit by cutting my loses early on in the process, and not wasting the high level of service that I typically provide.  Yes, it is dissappointing; but I also have no illusion of gaining and retaining every customer I meet.  Who knows, the client may have been offended by my age, or my coffee breath that morning, or intimidated by my take-charge, lets-get-it-done-quickly-and-correctly manner.  Sorry 'bout that!  I care about why the relationship failed; but I can't dwell on it; and I'm not going to devote more than cursory effort to find out what went wrong.

There are plenty of compatible clients to go around; and since it's important to me that my mortgage broker succeed and continue to offer excellent service for my clients, I won't fret but for a moment when I lose a client that I sent them.  I know and trust my mortgage broker well enough to know that the failure wasn't on their part. 

Write that loan, brother; and let's celebrate the successes we are blessed with! 

Jul 15, 2008 07:42 AM
#28
John Thomas
Primary Residential Mortgage Inc. - Newark, DE
First Time Home Buyer Expert

As an LO, I would have called the Realtor and explained to them exactly what the client told me and ask them if there is anything I could do to help them win the client back.  I wouldn't ditch the client and I don't think the realtor would ask me to ditch them.  I have lost a client I referred to a realtor to another mortgage person because they had a program I couldn't offer, I told them no problem.

Jul 17, 2008 01:16 PM