Here is a word of warning to those considering a real estate purchase in the current market. There are some great buys to be found in this market, but make sure you don't shoot yourself in the foot when it comes to the financing!   Know your lender!!  There is still mortgage money available and still at very good rates and terms.  I always advise clients to shop around.  But comparing rates is only the beginning.  Make sure you ask for a "good faith" estimate.  Two lender offering the same rate may have very different fees and paying more than necessary at the closing table is just money wasted.

I have the misfortune to have come into contact with a couple of predatory lenders.  The latest one was very bold and it was only by chance that I was with my clients when they met with this lender.  In my experience, most people would rather share details of their private lives than share their financial information!  Normal proceedure for me is to have the client contact various lenders and then come back to me with the results.  No financial details, just let me know what price range you are qualified to purchase and that's all I need to know.  In this case, my client was considering an unusual property and they had been advised  by a "friend of a friend" to go to this lender.  As we were a long way from where we started, we decided to visit the lender and I would stay in the lobby and read. No problem, they talk to the lender and I am still out of earshot so they can maintain privacy.  The lender had already talked with them over the phone and had given a rate projection of 6.5% based on good credit scores. 

I glanced up at one point to see my client waving at me to come in.  I did so and sat down to listen.  I was only introduced by name and assumed he knew I was their Realtor.  As I sat there, he began going over what they were discussing.  First, he said to make sure they stayed away from a Realtor.  He said they are dishonest and only pushing people into properties that make them money.  You really don't need one.  Next, he said they should forget about the property they were considering.  He knew where there were better properties.  Of course, they were about $100K more and about thirty minutes further away than this property, but he thought they were worth it!  Again, he took at stab at Realtors and said he could not believe a Realtor would have shown them this property.  My clients are trying to explain why this the exactly what they want and all the while he is trying to tell them that they don't want it!  Again, pushing property he knows about.

At this point, I couldn't take it any more and told him that I was their Realtor and his job, and mine, was to do our best to give the client what they want with the best service possible.  He didn't back down.  I asked him to please get back to the matter at hand and let's talk about this property. And this is where things took a really strange turn!  Let's talk about rates and terms for the property the client has chosen.  He tells me that they will need 20% down but not to worry about that.  He advises people to write in into the contract, that way you really don't have to have the money.  Is this ringing bells with anyone?!  I questioned him several different ways about this and he still maintained that he did not need to show a paper trail.  He did not need to verify the funds.  He said all he needs is it to look like they put twenty percent down.  OOOKay.  I then thought to ask again about the rate.  My clients have an A+ rating.  They have already been qualified by another (reputable) lender.  He said he could probably give them between 9% and 14%.  I asked what happened to the 6.5% we were quoted and he shrugged it off.  Obviously, he was not planning on anyone with experience being present to ask questions.  He was going to bully the client into his terms.

So, I have have told you this long story for two reasons.  First, find an experienced Realtor you trust.  Someone who is your advocate and will help guide you in areas where you may need help.  Be wary of anyone who advises you not to have someone in your corner unless you feel you know enough about the real estate market to be confident in what you are doing.  Be very wary if the same person who is advising you not to have a Realtor is also trying to sell you something, whether it is real estate or a mortgage loan!   Second, be very careful of what you believe!  Get everything in writing.  If a lender balks at giving a writen estimate, walk away, no matter how good the deal they are offering seems.  In many cases, buyers don't find out that fees and interest rates are not what they were promised until they are at the closing table.  This is what a predatory lender counts on.  At this point, the seller has probably moved out, the buyers may have their belongings packed up and already in transit.  What do you do?  Walk away and start from scratch?  You may have also sold your home at this point and will have no home to go back to. Or, do you bite the bullet and accept their terms?  They are betting that you have no choice but to sign.  Lenders like this are one of the reasons we are in the financial situation we are in now.  If you encounter one, run, don't walk away and make sure you notify your Realtor.  They should be willing to report the lender for predatory lending.  It is, after all, against the law.