Transparency in the Real Estate world… what does it truly mean?
How many of you in the last few years kept hearing real estate and mortgage professionals talk about transparency? Before we start, let's define a few types of transparency.
(These definitions come from Wikipedia)
Here is my major frustration about the word transparency. So many loan officers are now telling clients that you need to know what you are being charged, and that is to include the back end. When I say back-end, I am talking about Yield Spread Premium. (YSP) This argument seems to be more from those that just sell, but those who don't educate the consumer. I am seeing this all throughout real estate, even with realtors. In all honesty, who cares what my YSP is if my rate and fees are less than the person selling you YSP, who might be the same or a tad higher.
To me, my opinion, this is smoke and mirrors. I am seeing many sales people turn the word transparency upside down. Putting a totally different spin around it. Sorry people, any loan officer can quote a rate. Any realtor can throw out a price of your home to you. But what about the fundamentals? How about truth, honesty, openness, and communication?
So what do we do from here? How does a consumer know the real meaning? Keep in mind, many relate to transparency when you buy a car. It is now common practice to actually see the invoice, showing how much the dealership bought the car for. Sorry people, cars are built on an assembly line. Shopping for a mortgage or a house, or listing your house, is different for each and every person. Not one is the same.
Important to share this point - Please read - I want the same deal that my friend got !!!
The real transparency should not be about obtaining the best mortgage rate. Or getting the best or highest price for your home. Or the cheapest home. Yes, we all want the best deal. But what might seem like the best, could be the worst. Just because I tell you that I am an upfront mortgage broker, that I get you the best deals, can this bite you in the arse? If I don't iinterview you properly, the best mortgage rate might not mean much, if I give you the wrong mortgage program. Please read : What does your professional designation truly mean.
Summary - So how do we get around this issue, trying to get around being an educated consumer? Some ideas....
- We can research online, on the internet. But be careful, just because it sounds good, doesn't mean that it is or that it's true.
- Get referrals from friends, family, or related professionals. But again, be careful, not all seem to be out for your best interest or know what they are doing. Just because the referral comes from someone that you trust.
- How about going back to the person that you had a good experience with before? What happened to loyalty? If you truly trusted that person and felt really comfortable with them, why do you listen to others making new and or better promises? Please, question yourself about this.
- Interview those that interview you. Interview your loan officer. Interview your realtor. Hey, a good realtor or loan officer should be interviewing you. Why not do the same. I will be talking about this in detail in my part 2 section.
Reminders - this is based on my opinion of over 17 years of mortgage experience and from talking to other like-minded mortgage professionals.
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For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc