The
Internet Isn't Replacing Agents
| The following
is based upon a pool conducted
by the NAR in 1999 of more than
1,750 consumers who bought or
sold homes, and from a CAR survey.
|
 |
The Internet has had a major
influence on the business
of buying and selling houses
but it hasn't taken over
from savvy real estate professionals
and may never displace them
from the center of most
real estate transactions.
|
|
Usage of the Internet is
up significantly by buyers
and sellers. |
|
Traditional buyers spend
twice as much time with
agents looking for a house,
as do Internet users, as
well as considerably more
time considering purchasing
before contacting an agent.
|
|
Internet buyers visit an
average of only four houses
before making a decision,
as opposed to 10 by traditional
buyers. |
|
The percentage of sellers
who sold their home without
help from real estate professionals
has not increased. |
|
Buyers who searched on the
Internet were MORE likely
to use a real estate agent
to complete the process
and close the transaction.
87% of Web user purchases
their home through realty
pros, compared with 76%
of those who found their
homes the fold-fashioned
way. |
|
The Internet allows buyers
to be much more thorough,
narrowing their search considerably
before hitting the street
to take a firsthand tour
of houses. |
|
Three out of 10 also used
the Internet to find detailed
information about the neighborhoods,
schools, shopping local
transportation, etc. |
|
Many used it to determine
their best financing options,
or even to apply for loans.
This has brought faster
speed to the sale of real
estate. The length of time
it took to close the deal
once a contract was signed
fell by a third. |
|
While a few buyers used
the Net to find a real estate
firm or agent, they used
it primarily in conjunction
with, not as a substitute
for the services of brokerage
firms. |
|
The information explosion
is increasing the need for
experts to place data into
a meaningful context for
customers. |
|
|
Conclusion |
| The Internet
is not an experienced real estate
professional. It cannot consult,
counsel or advise. While data
and information online have value,
such content is not a substitute
for local experience, negotiating
skills or representation. Real
estate agents who are truly PROFESSIONAL
are here to stay. |
|
Mortgage Finance in a Technological
World. |
The more
information borrowers have in
their hands, the harder it is
for brokers to charge high mortgage
commissions and fees. Prior to
the technological advances of
recent years, lenders and brokers
had a monopoly on mortgage market
information and data, and the
borrowing public was largely left
in the dark, therefore commission
opportunities for mortgage brokers
were substantial. Advancing technology
has brought the availability of
mortgage market information to
a new plateau and the monopoly
lenders and brokers once had have
been eliminated. Today, virtually
any borrower with a computer has
immediate access to enormous amounts
of current, comprehensive, in-depth
data on market conditions, and
an increasing number of mortgage
lenders’ loan programs and
mortgage rates. This has leveled
the playing field in so far as
borrowers’ ability to obtain
competitive mortgage financing,
and is causing fundamental changes
in how the mortgage business is
conducted.
Because of the infamous cases
where mortgage brokers have gouged
borrowers, collecting enormous
commissions and junk fees from
borrowers, borrowers grew "gun
shy". The huge improvements
in direct access to market information
has increased this caution. Borrowers
can now efficiently monitor the
quality of their mortgage broker’s
services and, in too many cases,
they are finding it lacking, or
even worse - self-serving. Increasingly,
borrowers are seeking ways to
retain direct responsibility for
monitoring the market and making
their mortgage applications
Advancing technology has bred
new competition in the mortgage
market. With direct access to
market information, the many sources
where mortgages are offered can
easily be compared. The key difference
now is performance. How often
do borrowers get the mortgage
they were lead to believe they
were going to get, and at the
rates and fees they were lead
to believe they were going to
get.
Professionals, who are paid to
ensure they are getting the lowest
terms available in the market,
fund mortgages in the capital
markets. Mortgage brokers are
paid to get borrowers to commit
to mortgages at the highest terms
possible. The difference between
the two is the "spread"
that the mortgage broker keeps,
which can be worth thousands of
dollars in profits and commissions
to them. There’s nothing
wrong with profits if they are
reasonable in relation to the
services provided, and the same
as those available to everyone
else.
Many are concerned that online
mortgage lending will quickly
dominate the business. We at All
American Finance do not agree.
We believe that, while online
mortgage banking will become a
primary tool in the business,
a vast majority of mortgage borrowers
will continue to seek human assistance,
even those who are highly computer
literate. However, the type of
assistance they seek will change
dramatically from that sought
in the pre-technology days. It
will be somewhere between the
services provided by the high
commission, full service mortgage
brokers and those provided by
the low cost, do-it-yourself online
lenders. AAF franchise program
through real estate brokers uniquely
positions it to fill this niche.
AAF is committed
to fully incorporating the advantages
of advancing technology for the
benefit of mortgage borrowers,
and to enabling them to efficiently
access the benefits of this technology
through personal assistance provided
by its franchise system. Borrowers
can now approach the mortgage
market through All American Finance’s
franchise system with the confidence
that they will have available
to them the personal assistance
of mortgage professionals who
will help them obtain market information
they need to make wise decisions,
and to assure they are obtaining
mortgage financing that most efficiently
meets their specific needs, and
at terms that are highly competitive.
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Things
California real estate agents
should know |
|
Special mortgage licensing
is not required. A California
licensee may provide both
real estate and mortgage
services pursuant to a basic
real estate license. |
|
The DRE does not require
any notification that the
broker is engaged in mortgage
finance. |
|
No year-end reporting is
required because All American
is a direct lender. |
|
No conflict of interest
exists. According to Dan
Wagner, Deputy Commissioner,
DRE. "There is not
a single consumer complaint
on record of a conflict
of interest where a Real
Estate Broker earned commissions
for the sale and the loan."
|
|
The DRE requires a simple
disclosure to the borrowers,
including the form, source
and amount of the commission
earned, all of which are
included in the Estimated
Closing Statement. |
|
Where
are Interest Rates
How can
anyone give you a true rate quote
without knowing your specific
situation? There are hundreds
of factors that impact a borrowers
credit rating. And, there are
hundreds of investors with special
loan programs tailored to address
specific needs or problems (yes,
even for folks with perfect credit).
AAF provides
clients with "good faith
estimates" tailored to their
specific preferences, credit history,
and/or current financial situation.
AAF then provides rate quotes
tied to specific benchmarks. When
you are ready to lock a mortgage
rate clients need only look at
the benchmark to determine the
rate you can lock: |
|
All
American Finance’s approach |
| You need
only call an All American franchise
office and you will be assigned
a loan officer trained by All
American. If you prefer, your
entire application will be handled
manually. Or, the loan officer
will assist you in getting speeder
service by submitting your application
online, while also being personally
available to assist you with any
aspect that can more efficiently
be served by telephone or in person.
The loan officer will assist you
with the entire evaluation; application
and funding process as follows: |
|
· Getting logged
onto AAF’s Web Site |
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Checking online the loan
programs and terms offered
by All American and its
competition. |
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Selecting online the program
that most efficiently meets
your needs. |
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Submitting your loan application
online. |
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Checking online the status
of your loan application.
|
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Following up by telephone
or personal visits regarding
any questions, documentation
or other issues that cannot
be efficiently addressed
online. |
|
| So, you
will benefit from the efficiencies
of advancing technology, but you
will not have to go totally do-it-yourself.
You will have the assistance of
a local professional to guide
you through the process. |
|
One-Stop
Real Estate and Mortgage Service |
| Every agent
in All American’s network
is a "true" real estate
professional. They can provide
efficient, competitive services
in both real estate and mortgage
finance. There’s no need
to talk with another person to
pre-qualify for a loan to see
how much of a house you can afford.
Or, when you find a home you’d
like to buy, there’s no
need to go through the process
of locating another professional
you can trust to get a mortgage.
Select a true real estate profession
for the outset from All American’s
network and you will have a professional
who can handle all of your needs. |
|
Less
Then Perfect Credit |
| Regardless
of your credit history, you can
get a mortgage loan. However,
credit history can have an enormous
impact on the terms of loans available.
The mortgage market has become
very highly competitive. There
are hundreds of investors anxious
to compete for your loan, each
with numerous programs of varying
structures to address specific
needs. Making efficient adjustments
in the complete range of terms
is the key to obtaining the most
attractive mortgage possible.
All American has relationships
with a wide range of investors
across the nation, and through
these investors access to virtually
every type of loan. Don’t
be misled by the bait and switch
tactics of some mortgage brokers.
Talk with a professional agent
in the All American network. They
will evaluate your credit background
and assist you in selecting the
combination of terms that will
get you the mortgage that will
best meet your needs. |
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