Question

A real estate salesperson has been working with buyers. After helping them negotiate for their dream homes, the buyers ask the salesperson if she can help them secure a mortgage. The salesperson knows a lender that pays a fee for referring purchaser to them. Should the salesperson refer the buyers to this lender?

A. No, this would be an unwise referral
B. Yes, if the salesperson and the buyers have previously entered into a written buyer agency agreement
C. Yes, if the salesperson discloses the referral fee to then seller
D. Yes, if the lender offers the best interest rates and terms available in the market

Answer 1

The real estate salesperson should refer the buyers to the lender only if the lender offers the best interest rates and terms available and the salesperson discloses any referral fees.

Step-by-step explanation:

If a real estate salesperson has buyers asking for help to secure a mortgage, and the salesperson knows a lender that pays a referral fee, the most ethical and professional course of action would be to refer the buyers to this lender only if the lender offers the best interest rates and terms available in the market and the salesperson discloses the referral fee to the buyers.

It is important that the salesperson acts in the best interest of the buyers and maintains transparency about any potential personal gain from the referral.

When dealing with financial products like mortgage loans, full disclosure helps in building trust and ensuring that the buyers are aware of all aspects of the transaction, including the referral fee.

Additionally, the salesperson should ensure the lender is scrutinizing the borrower carefully for their ability to repay the loan and offering terms that are in the best interest of the buyers, avoiding practices that led to the issuance of unsustainable 'subprime' or 'NINJA loans' in the past.