The vast majority of real estate purchases require some form of financing. Agents and brokers who assist clients in their real estate needs may also assist clients with their financing requirements. Because agents are aware of the needs of their transaction, they may be best equipped to assist clients with their financing needs.
A mortgage loan broker can dramatically reduce the time it takes to find suitable financing, and may even introduce borrowers to lenders that they may not have previously considered. In order to begin the process of representing clients financing needs, the client and broker will sign a loan broker listing agreement. This listing highlights the major components of the transaction, including the borrower’s rights, each party’s obligations, and the broker’s commission structure.
Why a Buyer Would Use Their Agent As a Loan Broker
Real estate agents have the necessary knowledge, resources, and contacts to assist their buyers retain financing. While not all agents have the expertise required to assist buyers in locating suitable financing, a small percentage of agents work in the financial industry. These agents provide buying clients with a distinct advantage because it gives buyers the ability to contact one person for all their buying needs.
The home buying process is typically a long and difficult one. Working with an agent that has financing experience alleviates the stress and oftentimes the period of time it may take for a transaction to close. When one party has the knowledge to handle every portion of the transaction, it dramatically increases the chance that the transaction will successfully close. In return for securing financing for the buyer, the agent typically charges a fee or a commission in addition to the payment they require for representing the buyer in the purchase. Loan brokers fees vary depending on the loan amount, amount financed, and complexity of the transaction. Loan commissions typically range from 1-3% of the total loan amount.
