Serving Waukegan, Libertyville, Lake County, Gurnee & nearby areas of Illinois
Our firm has handled literally thousands of residential real estate transactions. We have often worked with some of the best real estate brokers in the business but have also worked with some of the worst. Based on those experiences, here is our advice for choosing the right realtor for you:
1) Beware illegal and/or unethical kickback schemes with title companies. Title insurance provides a guarantee to a buyer, and their lender, that the property is being transferred free and clear of any title defects and that any past title issues or claims have been resolved at or prior to the time of the closing. Many real estate brokerages own their own title insurance agencies and insist or suggest that those listing their home with the brokerage use their controlled vendor. The reason for this insistence is not to look out for your best interests but instead to maximize the fees and compensation received by the real estate brokers. Kickbacks received merely for providing a referral and without performing core title services are a violation of the federal Real Estate Settlement Procedures Act. The fact is that attorneys have the best training, knowledge and experience to provide good, high quality title examinations and issuance of title insurance policies. Let the realtor market and sell the home. Leave the legal intricacies of title insurance to your attorney.
2) Beware illegal and/or unethical kickback schemes with mortgage lenders. The Consumer Financial Protection Bureau was created after last decade’s mortgage foreclosure crisis to reign in certain unethicial behaviors by some people in the real estate industry. Recently, the CFPB fined a California firm for refusing to sell its listings unless the buyer used the services of the real estate broker’s preferred mortgage lender. The reason for this insistence was the mortgage lender’s payment of a kickback to the realtors of part of the fees earned from the loan transaction. Kickbacks received merely for providing a referral and without doing some other work to earn the fee are a violation of the federal Real Estate Settlement Procedures Act. There is nothing wrong with asking your realtor for a referral of a good mortgage broker/lender but beware one who insists that there is only one person you must use. Don’t be afraid to ask if the realtor gets any compensation for the referral. If they refuse to answer, you know that they are providing the referral solely in their own financial interests and are not looking our for your best interests. Referrals are best provided solely because the provider is good at what they do.
3) Experience Matters. There is no substitute for experience. A realtor who has handled many transactions is better equipped to address you many issues than a realtor who does only a few transactions a year or is new to the business. Look for independent realtors who receive all of the commission paid at closing and then pay the brokerage house a monthly fee to be associated with the big name company (ReMax, @properties, Century 21, etc.). Realtors who must split every commission with the house are usually the least experienced.