Do you think friends should give real estate advice? Then why are you offering mortgage advice?

By
Real Estate Broker/Owner with Respect Realty LLC 200311024


Advice ExpertI was talking to an agent before I went on vacation and he was complaining about a client that kept walking away from deals because he had a friend who kept giving him real estate advice. We have all had this happen, and though it is frustrating, it is something we have to overcome.

How do you do that? You become the expert! But, after returning from vacation, I heard this same agent giving advice to someone on the phone about mortgages. I thought to myself, how could you be mad at your other clients friend for giving real estate advice when they aren’t an agent and here you are giving mortgage advice and your aren’t a mortgage banker?

You can’t have it both ways, are you the friend with advice or are you the expert? Don’t give advice on subjects that you aren’t qualified to give… personally, I think it could lead to a huge lawsuit. What would you tell this other agent?


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Rainmaker
1,245,954
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I totally agree and it also happens with property management.  Agents present properties that may appear like a good investment with an excellent purchase price and that won't rent!  There goes the savings of the client!

Nov 28, 2010 12:23 AM #2
Rainmaker
805,351
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

This is a good point.  I think it's important for us to stay in touch with the mortgage  products available, but not to give advise on them.  The best advise I can give my client, is the mortgage officers phone number!  Cindy

Nov 28, 2010 12:23 AM #3
Rainmaker
564,591
Steve, Joel & Steve A. Chain
Chain Real Estate Investments & Mortgage, Steve & Joel Chain - Cottonwood, CA

Todd,

I think those that know... know. That having been said agents probably don't want to say anything they don't want to take responsibility for.

JMHO,

Steve

Nov 28, 2010 12:28 AM #4
Rainer
238,218
Joel Gwillim
CIR Realty - Condo Specialist - Calgary, AB
Associate - REALTOR®

This can be very frustrating.  I once had a customer who was listing his home who told me that his plumber told him that his home was worth more than what I had suggested.  It's very difficult to argue with that type of defective reasoning.   I guess I was more amused than anything, and told him as much.  It can be very comical.

Nov 28, 2010 12:30 AM #5
Rainmaker
4,797,927
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I only give recommendations as to good mortgage brokers, lenders.  Loans can be a complicated business.  Very true Todd.

Nov 28, 2010 12:32 AM #6
Ambassador
525,951
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTOR® - Charlottesville Virginia Homes / Horse

Whenever clients ask me about mortgages, I prefer to be the source of the source and give them contact information for several trusted lenders.  I explain that this is not my area of expertise and that I want them to get the most correct, up to date information.

Nov 28, 2010 12:36 AM #7
Rainmaker
3,246,166
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I too only give recommendations for good lenders and let them get all the details/specifics from them.

Nov 28, 2010 02:05 AM #8
Ambassador
544,440
Gerry Michaels
Glasswork Media Arts - Gettysburg, PA
GettysburgGerry Social Meida

I am with Kristin, I only recommend lenders and let the lender answer the questions, it has become a much more specialized field and I have my hands full keeping up with the constantly changing real estate market

Nov 28, 2010 02:09 AM #9
Rainmaker
1,027,100
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

I like the line "be the source of the source."  You make an excellent point - we often complain about all the advice everyone seems to get about real estate, when many agents are guilty of the same thing!  I'm sure there are loan officers and mortgage brokers everywhere complaining about real estate agents who give morgtgage advice!

Nov 28, 2010 02:55 AM #10
Rainmaker
1,616,935
Rick Obst
Eugene, OR

Whenever I receive advice I always consider the source.  Experienced real estate agents may have more than a passing knowledge about mortgages.  But I wouldn't rely upon thatadvice to make my decision.  Your topic frequently comes up on Zillow and Trulia when out-of-state agents answer questions about financing or local real estate matters.  The wise agent is the one that knows what he or she really doesn't know.

Nov 28, 2010 03:18 AM #11
Ambassador
700,948
Lee & Pamela St. Peter
Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522 - Raleigh, NC
Making Connections to Success in Real Estate

Good point Todd, our advice for our clients is to contact a professional and experienced lender.  There's just too much out there for us to keep up with for sure...

Nov 28, 2010 03:48 AM #12
Rainmaker
3,481,861
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Valid point Todd - how often do we have open house clients ask about mortgages or physical inspection issues(not just general but specifics)....it's best to have reputable professionals and experts in their field available to answer those questions. 

Nov 28, 2010 04:56 AM #13
Rainmaker
829,115
Sheila Newton Team Anderson & Greenville SC
Berkshire Hathaway HomeServices - C. Dan Joyner - Anderson, SC
Selling the Upstate since 1989

Great point Todd... I don't want to give advice on mortgages.. I prefer to let my lenders do that... Besides, there are so many changes that we may not know about yet... I leave the mortgage advice to lenders, the legal advice to attys and the tax advice to the CPAs.... We all have our specialty!

Nov 28, 2010 05:21 AM #14
Rainmaker
507,032
Cal Yoder
Keller Williams Elite - Lititz, PA
Homes For Sale in Lancaster PA - 717.413.0744

It would be helpful to define giving advice. What did the agent actually say in what you are defining as giving advice? Having asked that, I agree that referrals are helpful.

Cal

Nov 28, 2010 12:06 PM #15
Rainmaker
551,479
Jon Quist
REALTY EXECUTIVES TUCSON ELITE - Tucson, AZ
Tucson's BUYERS ONLY Realtor since 1996

I offer advice on real estate only, and then I'm really careful.

On other topics like mortgage loans, home inspections, etc., I defer to experts in those fields.

Dec 01, 2010 04:45 PM #16
Ambassador
2,137,244
Respect Realty LLC
Respect Realty LLC - Milwaukie, OR
Brokers - Oregon / SW Washington Real Estate

It amazes me that most of these agents that do this would never consider giving legal advice because they know they aren't supposed to, but they feel it is perfectly fine to give mortgage advice. Both can harm the client just as much and both can lose your license just as fast.

Dec 01, 2010 05:08 PM #17
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