How much do I trust my realtor?

[Emily Shirk]

Hello!

My husband and I are first time buyers and new to the area (San Jose).  We met with a realtor who I found on zillow with high ratings and she instructed us that because the housing market is so competitive here, it is important to have all of our underwriting completed and our contingencies as small as possible.  She explained that she has a close working relationship with a mortgage consultant at WellsFargo who underwrites for all her clients and gives them priority.  I have been researching first time home buying and read that its important to speak toh multiple lenders, however she made it sound as if he handles all her clients and in order for the process to go smoothly we needed to go through him as well.  Is this normal?  After speaking with him he said to expect a 4.2-4.5% interest rate on a conventional loan with 5% down.  What are your thoughts?

[Katrina Edwards]

Everyone who has posted has given you good advice. The "personal gain" for your Realtor in introducing you to a preferred lending partner is likely to be limited to transaction comfort and accessibility as well as referrals to other buyers/sellers. Anything more than that is not legal or ethical. With 5% down, it sounds like you'll probably be limited to FHA financing or a portfolio loan (one the lender keeps and doesn't sell to Fannie or Freddie). Rates and fees will likely be similar for FHA. Porfolio loans may be different. In our market, the ability to DO the loan is huge. When I have my listing agent hat on, who has given the pre-approval for a potential buyer's loan makes a difference in my recommendations to my seller when responding to offers. We want to see direct lenders. Wells Fargo is one of those.

The most important thing when you are purchasing a home or other property is that you can trust the people you put on your team.  You're going to be sharing incredibly personal information with your lender and agent.  If you have doubts about their integrity, call them on it.  It could simply be that red flags for you is just how we do business here.  BUT, it could be something else is triggering your doubts.  Ask questions.  What type of relationship do you want with your team?  Business only? Ongoing friendship?  Those things can make a difference, especially when the going gets rough or there are transactional hurdles.  As far as your loan goes, contact your credit union, visit the bank where you keep your money, and ask friends and coworkers for their recommendations.  

If you decide you no longer want to work with any of your team members, tell them sooner rather than later.  At the end of the day, this is YOUR life, YOUR home and YOUR money.  Don't let anyone make decisions for you or push you into anything.  YOU need to be comfortable and understand what you're doing.  

Good job reaching out for a reality check and best wishes for finding your new home.