In response to the discussion about Realtors being "encouraged" to use their affiliated lender, I would ask this: What do you think happens in the Toyota dealership when you are ushered over to the finance department and walk out with a Toyota Motor Credit loan or lease? That's right, you have just been referred to the "affiliated lender". Does it work to add profit to the dealership? Of course...especially since you are in an altered state of mind from being under the influence of new car smell. Is it the best thing for the consumer? Not by a long shot.
"Buy here, finance here". That's what they call it in the auto business (where I spent 20 years of my career). Please, let's not pretend that the reason real estate companies "encourage" their Realtors to use their in house lender is for the sake of "mortgage broker quality control". It is another profit center, plain and simple, just like in the Toyota dealership. The more the Realtors use the in house lender, the more money the real estate company makes. 
Excuse me, but I don't think the profitability of the real estate company should be the criteria for anyone making a decision on where to obtain their mortgage. As I have said many times before, what is best for the client is always what is best for us.
Okay, PROFIT is not an evil word, and many people who buy a big ticket item (like a car or a house), welcome being referred to the in house finance person. They are too scared or too lazy to go out in the world and compare mortgages, mortgage brokers, and closing costs. That's okay.
But just like buying a $5 coke in the ball park, convenience carries a higher COST. Sorry, but that's just economics 101.
Now when you're thirsty at the ball park, what do you care if the machine right outside the park will spit out a coke for a buck? You don't.
But when you are financing something that costs a million bucks, (or even a $50,000 Lexus) maybe, just maybe, it isn't the best idea to pay for convenience. At least you should CHECK OUT the other financing options out there.
Very small differences in mortgages and finance plans can add up to thousands of dollars in costs that could be avoided altogether. Or, maybe the in house finance plan IS the best one. But you'll never know for sure until you compare.
While in the car business, it never failed to amaze me the time, intensity, and research that people put into getting the best price on the car. But for financing, (after being exhausted from the negotiations with the "desk") they would go straight into the finance office and in 3 minutes sign the worst car lease in the world.
No thought was given to shopping for the financing, just sign and "get it over with".
Is it a conflict of interest to have a buy here, finance here operation? If it is, there would be no GMAC, Toyota Motor Credit, or BMW financial. But consumers need to understand that when you buy a car, or buy a house, you are BUYING SOMETHING ELSE. You are also buying the FINANCING.
Would you buy the first house the Realtor showed you? Would you go into one dealership and pay full price for the first car you saw? If not, then consider in house financing for what it is.... a convenience to you and another source of profit to the real estate company. Check out other options, always.
PS Have you ever wondered why mortgage companies don't have in house real estate operations? I have. I also wonder why so many Realtors rebel against using the in house lenders and worry what the management of the office thinks...("pssssst, Janet! I could get in alot of trouble with the owners for giving you this loan, but here's the phone number. Could you call them right away?")
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