REALTORS® need to be in the financial 'driver's seat'

Too many REALTORS® have handed complete control of their clients’ financing over to lending institutions, according to Melanie McLane, a 30-year REALTOR® and appraiser in Pennsylvania.

“A good REALTOR® should understand financing and be able to crunch the numbers himself to help his buyer understand the mortgage options,” said McLane, who will teach “Dollars and Sense” at Triple Play REALTORS® Convention and Trade Expo, December 7.

“REALTORS® need to know how to use a calculator to help their clients get the best mortgage,” she added.

McLane said it’s imperative to explain to clients the difference between a 15-year or a 20-year mortgage and show the clients what their monthly payment would be. It’s also important to understand the differences in the types of mortgages and be able to explain the pros and cons to clients.

“Since Fannie Mae’s got religion again, we’re seeing 28- to 36-percent ratios,” McLane said. “You need to be able to use a worksheet and show your clients, based on what they earn, how much they can afford as a monthly payment and what price range for a home that would cover.”

McLane said REALTORS® helping their clients through this process can help them make informed choices. “Over the years, I’ve had people decide to trade in their car so instead of a $500 car payment, they dropped it to $300 so they could afford a house. If you don’t know how to run a calculator, you can’t help them make this decision,” she added.

With the revised Good Faith Estimate (GFE) and the Housing and Urban Development (HUD)-1 forms, REALTORS® should understand how the forms work and the tolerated differences. McLane said, “Consumers are confused. There are so many different loan products on the market; it makes it difficult for them to make the right choice. By knowing more about the mortgage and finance process, REALTORS® will position themselves as the source of information for their clients. REALTORS® need to be back in the driver’s seat.”

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