Hot or Not?

(Editor’s Note: I’m very excited to introduce Jillayne Schlicke as the latest contributor to RCG! You might recognize her from the interesting comments she’s been leaving on RCG recently or from her contributions to the Seattle Real Estate Professionals blog. In addition to playing an active role in the blogoshere, she runs BPI Consulting Education and Training which provides consulting in ethics, compliance, conflict resolution, and communications, and provides continuing education to the professions including the professionals within the mortgage lending and real estate industries. Please feel free to contact her at or simply leave a comment below!)

I was out of town over Christmas and picked up a USA Today from the hotel lobby. In the Friday, Dec 22nd edition there’s an article called “Buying Your First Home Can be Intense

72 thoughts on “Hot or Not?

  1. I agree that consumers should check their credit score first, though not by using the method suggested. But what does it say to do after that? Checking it for what? Simply checking it, without further advising what to do if it is 560 vs 730 doesn’t help the consumer much.

    WELCOME! Running to a home inspection. Will comment on some of the rest of it when I return.

  2. Great article, Jillayne. I thought I was done blogging until the New Year…but I had to respond to your blog.

    Regarding obtaining three quotes from mortgage vendors, I personally, do not think that’s “HOT”. As a Certified Mortgage Planning Specialist, I would advise that consumers obtain referrals for a mortgage lender from people they know who have recently purchased or refinanced a home, or from their real estate agent.

    It is often very challenging (even misleading) for people to “shop” lenders based on rates and fees. There are several factors that impact interest rates. To begin with, interest rates can change several times throughout the day. A borrower would need to obtain quotes during the same time of the same day from the three lenders they are shopping.

    The length of the lock period also impacts the price of the rate. Borrowers need to make sure they are getting quotes based on the same length of time, such as a “30 day quote

  3. “Can an attorney act as a real estate agent?” That depends on what you mean by “act as a real estate agent.” An attorney does not have access to the MLS and therefore cannot gain entry to homes with key lockboxes. However, once you find a house on which you want to make an offer, an attorney is more than qualified to draft the offer and protect your interests in the impending legal transaction. While a real estate agent can only engage in the limited practice of law by completing blanks in preprinted forms, there are no such restrictions on an attorney. Indeed, many “experts” recommend hiring an attorney when buying or selling real estate.

    Moreover, if you use an attorney to make an offer on an MLS property, you can offer 3% less than the asking price and still make a “full price” offer. You’ll want to explain that, because you (the buyer) have no agent, the listing agent may be willing to reduce his/her commission by the amount that would have been paid to the selling agent. Depending on the amount of time the property has been on the market, this tactic often works well.

    So, I think this definitely falls into the “Hot” category.

  4. Hi Ardell,

    Ardell, I agree with you. USA Today could have gone further to help the consumer know what to do with their credit score numbers, but that would have made for a much longer article. Here’s what they did offer in their short article:

    “Three credit agencies track your credit history based on whether you pay your bills on time, the amount you owe, the types of credit you have and the length of your credit history. You’re entitled to a free copy of your credit report annually from each of the agencies (

    Fair Isaac takes that information and calculates your credit score ( If your score is 620 or more, you’re probably in good shape and should be able to get the best interest rates, depending on your income and how much you want to borrow. If it’s below 620, you might think about how you can raise it, perhaps by paying off old bills or reducing your debt.

    “Do not go to these repair-credit companies that will charge you a fee,” says Forrestine Bernard, a counselor at Neighborhood Housing Services of Chicago. “The items on your credit report that they can dispute — I can tell you how you can do it yourself for free. I can also tell you how to pay off the most important debts first.”

  5. Hi Rhonda,

    Thanks for your comments. Please tell your mortgage broker John Porter “hello” from me.

    When a consumer only focuses on getting the best rate or getting the lowest (or zero) fees, the consumer often ends up a loser in the mortgage game because there are so many moving parts to a mortgage loan that an average consumer doesn’t fully understand. A home buyer who is trying to find a lender is rarely going to lock their loan during the Good Faith Estimate phase of getting prequalified or pre-approved. So I still recommend consumers apply at their favorite bank, try a broker as well, and also at a credit union. Why a credit union? Because credit unions often have a policy of not making a loan that is not in the best interest of the credit union member.

    Mortgage brokers have no such duties although I know many mortgage brokers who always put the consumers interests above their own ability to maximize personal financial gain.

    Banks are regulated differently as compared to brokers and credit unions. Banks invest a huge amount of money in training and compliance, banks also have the ability to broker out or they have hundreds of products to choose from, just like a broker.

    The assumption that mortgage brokers are more ethical and educated than employees of banks and credit unions is a hasty generalization IMHO. As I mentioned above, I know many mortgage brokers who do great work for consumers.

  6. Hi All,

    Craig, you said “….once you find a house on which you want to make an offer, an attorney is more than qualified to draft the offer and protect your interests in the impending legal transaction.”

    I agree but always with the caveat that the attorney one selects be familiar with real estate transactions AND local custom. Hiring the “family lawyer” to help sell the family home can result in disaster if the attorney does not have experience in residential transactions. These days, attorneys usually specialize in one of several areas and just because an attorney is good at wills does not carry over to RE transactions. This means both the legal issues involved and the way the industry works.

    By the way, Craig is very good at this stuff.

    Happy New Year to all RCG’ers!


  7. Absolutely, Russ — you can’t stress enough the importance of hiring an attorney knowledgable in the area at issue. That said, a good attorney does not necessarily know the answer to a particular question, but he or she knows where to go to find the answer. When I am faced with a potential matter that does not fall squarely within my area of focus, I consider whether the issue falls within my “comfort zone.” If it does not — if it is too far afield from what I am comfortable doing — I’ll tell the prospective client that I am not their man, and if possible I’ll refer the client to a more appropriate attorney.

    Thanks for the kind words, and I’ll join Russ in saying, “Happy New Year!” [insert kazoo-type noise here, envision falling confetti]

  8. If the buyer engages an attorney to write an offer to purchase a house, the buyer shouldn’t expect the attorney to use NWMLS forms unless the attorney is a member of the NWMLS. The forms are copyright protected only for member use.

    Is the buyer’s attorney performing the traditional duties expected of a real estate agent representing a buyer? Or does that additional work (and probably risk) now fall on the listing agent?

    Michael P. Lindekugel
    Financial Analyst
    RE/MAX Commercial
    Team Reba – RE/MAX Metro Realty, Inc

  9. NWMLS forms are available for purchase and use by non-members from the NWMLS. Regardless, the MLS forms were written to be used by agents working on behalf of both buyers and sellers and thus are essentially neutral. If a buyer hires an attorney, the contract can be drafted to do a better job of protecting the buyer’s interests. This works well in a FSBO situation where there is no agent involved who will be “spooked” by a non-MLS contract.

    As for the “traditional duties,” I’m hesitant to answer without knowing what duties you are talking about. Some of those duties (scheduling an inspection?) are assumed by the buyer directly, while others (opening escrow?) may be handled by the attorney. If you provide me with specific examples I will be able to answer further.

  10. Craig, I disagree about the use of NWMLS forms by outside parties. These are copyrighted forms that are not for use by non-members and they are not available for sale unless they have been sold improperly to those that are not members. As an attorney you can purchase some limited forms from the MLS and my understanding is that attorneys are restricted to purchasing only one time per month. The contact at the NWMLS for such purchases is Mary Howard (she agreed to let me note her in this blog) and I can tell you she was vehement about the inability to purchase forms by outsiders when I called to confirm my belief about this issue.

    There are several agents and attorneys that are soon to find that they’ll be getting fined by the NWMLS for skirting this issue and selling to other attorneys and/or others outside of NWMLS membership. If you have any questions about this policy then Mary Howard from the Kirkland office of NWMLS would be happy to discuss it with you.

  11. Oh, and Craig, while an inspection is the duty of the buyer to schedule typically if there is a keybox on the house then the NWMLS rules require that a licensed agent be onsite throughout the period of time that the buyer and the inspector are at the property. Also, you made the comment that if an attorney is used to write an offer on a home that is on the MLS that you can offer 3% less and still make a “full price offer”. Bunk. A buyer does not have a right to interfere between the listing agreement between a seller and their listing agent. I understand other people’s concept of this but regardless it doesn’t change the fact that the listing agreement is a legal contract between those two parties (seller and listing agent) and no other person, layman, attorney, or agent has a right to renegotiate the terms of it which is what you’re laying out here in your remarks.

    Back to the idea of form use: When complex language outside of the MLS forms is necessary I use my attorney to help draft it for my clients benefit even though I pay the fee. I’ve kept a great long term relationship with Berrie Martinis of Garvey Schubert Barer for just these instances. This way if a contract ever ends up being disputed we can at least say that we were following the rules of agency and not acting as attorneys, which is outside of our licensing duties. I would recommend that more real estate agents do the same thing for the sake of their own business and for their clients.

  12. Reba

    I have never heard that NWMLS was going to enforce its copyright against lawyers who used their forms. I’ll have to check it out. If that is the case, it would surprise me. As a listing agent, would you rather have a lawyer-drafted unique PSA that you would likely have to pass by the seller’s lawyer for review or one drawn on the NWMLS form. The inability to use NWMLS forms is not going to dissuade a seller or buyer from using an attorney. It will only make it more difficult on the agents involved in the deal.


  13. Hi Rhonda,

    Yes, I do remember you. I’ve been trying to remember your last name from back then and it’s not coming to me. You use to sit by the window during sales meetings. I’m glad to hear you’re enjoying your career in lending. Yes, there is life after title insurance.

    In response to your questions, Good Faith Estimates can appear different from lender to lender, but all lenders are required to complete the form in the same way subject to RESPA guidelines, so it would not be too terribly confusing for a consumer to look at line 801 for the lender’s fee, 802 for discount points, and 808 (or below) for the broker’s fee, and so forth, in order to compare fees.

    It sounds like you are very confident that a mortgage broker can serve the consumer’s best interest. If that’s true, then recommending a consumer compare his or her Good Faith Estimates from three sources ought not be a cause for alarm to the mortgage broker community.

    Thanks for your insights.

  14. Can someone help me out with this part of the USA Today story? I’m still not clear as to if this is correct information or if it is inaccurate:

    “Keep in mind that your agent has a financial interest in showing you homes that are listed by agents in his or her office.

  15. Jillayne Schlicke,

    That would be more true in some places than others. For instance, Philly row homes. There are hundreds and hundreds that are pretty much all the same. So a company is more likely to show theirs before a competitors and the company may offer a slight incentive to the agent for selling an in-house listing. It’s usually peanuts though.

    More incentive for an agent to sell his OWN listing, than to sell the listing of another agent in the office.

  16. There is definitely an MLS rule that an agent who lists a house, but is not going to put it in the MLS, is not permitted to use a NWMLS Listing Form to do so. Didn’t see one about not using a NWMLS to write up a FSBO. Double Standard there, I think.

  17. Hi Jillayne,
    I’ve managed to sneak away for a moment from our family vacation (everyone is sleeping)…I’m in the hotel lobby trying to type on their older computer with a fuzzy monitor.

    You might be surprised at how many people are confused comparing Good Faith Estimates. Yes, they are suppose to report fees the same way but they are not conforming in appearance (yet). Many people buy a few homes and refinance just a few times in their lifetime, it is not a document they see everyday like you or I do. I have had Rate Shoppers tell me that some lenders will not provide GFEs without being able to first run a credit report. And, when I provide my free comparisons for Rate Shoppers, often times they are not faxing me GFEs but some sort of rough summary from the lender without the fees showing in detail. It’s not at all what I would call an ideal shopping experience.

    Where I’m coming from (and why I feel I have to respond during my vacation) is beyond the type of lender (banks, credit unions and mortgage brokers). The practice of rate shopping is misleading and should not be the only way a consumer selects who will be assisting with the financing of their home. The best rate with the wrong product and badly executed (or no) plan, will cost the buyer/boworrer thousands of dollars in either their monthly payments, when they need to restructure the mortgage or when they have to sell their home.

    My concern is that credit union and bank employees, and I should include current mortgage brokers (pre-licensed), are not likely to “go deeper” to determine what a borrower’s financial plans and needs are. Maybe I’m being hopeful that licensing and having to do continuing education will elevate my profession. Personally, I believe we will find a shift of Mortgage Brokers moving to Banks after the New Year when they either cannot pass the exam (to be held mid year) or they cannot pass a background check (if they’re a top producer, the bank backed mortgage company will be all too happy to employ them). By the way, I will be speaking about Loan Originator Licensing next month at the Greater Eastside Escrow Association dinner meeting.

    My passion about this topic stems from the years when I was in the title and escrow industry when I was managing escrow branches. Often times, I would help our Escrow Officers with signings if it was during a busy period. I kid you not, a majority (I would venture to guess 80%) of the borrowers at signing were exteremly dissatisfied with their loan originator (bank, credit union or broker). They did not understand they program (and would want the Escrow Officer to explain it), they did not receive the rate they were sold, or just an overall lack of service. With my current mortgage practice, I am also often referred clients who had a horrible time with their previous lender.

    What I would recommend is that a home buyer/borrower look beyond the type of lending institution (bank, credit union and broker) and focus on the individual originator and that person’s qualifications instead. What are their designations (CMPS, CMC, CMRS, CFP, etc)? Are they personally Licensed with DFI (anyone, even bankers or credit union employees can take the steps necessary to do this)? What associations do they belong to (WAMB, SMBA, FPA, etc.)? How long have they been in the mortgage industry? Where do they obtain their business (up calls, marketing or referral)?

    Jillayne, I do want to thank you for posting your blog. I can’t wait to get home for vacation to address this issue on my next post for my blog!


  18. Regarding the attorney issue and NWMLS forms use – it is possible for an attorney to also be an MLS member – although the ones I’ve run into in the past usually are licensed agents, such as Kirk Mulfinger, who does both. I just finished a transaction where he acted only as an attorney for his client rather than an agent but he used NWMLS forms for the transaction (he’s a NWMLS member). As for non-NWMLS member attorneys you’d likely need to ask Mary about the specifics but she was pretty clear that the forms weren’t for sale to outside parties. The fine issue is going to affect those that are NWMLS members (agents/attorneys) that are selling the forms. There is a huge issue with this right now particularly on the Eastside.

    Regarding the comment Ardell responded to on the item of agents having a financial interest in showing their own broker’s listings ahead of others – that, in general, is bunk. I don’t make any more or less money by showing listings from my office colleagues. It might be true if it’s new construction but site agents run on a completely different kind of pay structure than most indendent contractors.

    I also want to comment for those that have said that agents will show the properties with the highest commissions before showing lower SOC properties – that is an agent not following their fiduciary duty to hold up the client above their own interests. I’ve never not shown a property because of the advertised SOC and I’ve been shocked by agents that have tried to tell me that people in their office do it. I’m glad I don’t work in their offices because I’d have a real problem with those colleagues. Being a very involved member of the local Association of Realtors(R) I’m constantly working to educate our members on appropriate professional behavior, agency, and code of ethics. Blogs like these certainly do help to show the public that there are plenty of issues to discuss.

  19. oh, and Russ, to answer your question – I don’t have a problem with working with attorney drafted agreements. I’ll do what is appropriate for my clients. Obviously, with the NWMLS forms (and I’ve attended your classes on the updated forms this past summer and a commercial forms class as well) these are drafted by attorneys on behalf of the NWMLS members. They cover the basic terms and many of the contingencies that are “traditionally” used in real estate transactions. If there is an unusual element that needs to be addressed or if the NWMLS forms just aren’t appropriate for a client we’re happy to work with their attorney or to bring in our attorney – of course the client and I have to agree that the attorney can’t be used by either party if a dispute arises between us later.

    It is possible for attorneys and RE agents to work hand in hand although I rarely see it. Most people just go to an agent and go from there. I’ve heard other agents make remarks about getting attorneys involved usually “kills deals” because they believe the attorney will get things overly complicated, etc. I personally don’t agree. My group, Team Reba, works with the philosophy of bringing a team of professionals together to help represent a client and their interests. That usually includes legal, financial (CPA, financial planner), RE agent, lender, and more (if asked or appropriate) as part of the team. It has worked well for us and, like I’ve said before, I wish more agents worked from this view of representation.

  20. Hi Rhonda,

    Thanks for your passionate comments!

    I think if we became social scientists and took a larger sample size, we would find competent mortgage loan originators at banks, credit unions and mortgage brokerages, and we would also find a number of folks at all these institutions who are less than.

    This would make a great research project, but first we’d have to define the word “competent.” Does that mean holding a designation? A certain number of years experience? licensing? Membership in professional orgs? Or maybe it means something entirely different. I have co-authored and published articles on this topic at great length over the past 7 years. A couple of these can be found here:

    This question is worthy of a separate, longer post. If you write about this and put it on your blog, please let me know and I’ll stop by and comment.

    Please accept my good wishes to enjoy the rest of your vacation and Happy New Year!

  21. Reba,

    That is true HERE, but not everywhere. Rarely does a RE/MAX office offer a higher commission for in house sales, and I haven’t seen it at all on the West Coast.

    But I wouldn’t say it is BUNK everywhere, because that just isn’t true. A buyer SHOULD be noticing if an agent is showing more of their company’s listings or ALL of their company’s listings or ONLY their own listings. This is very important info for a buyer to be made aware of, or USA Today wouldn’t have printed it.

    There are THOUSANDS of agents in this Country, and some ARE doing that. Good advice for the buyer to pay attention.

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  23. Jillayne, I have bought homes in several states. I did it by myself in Alaska, New Mexico and Illinois, but I would never do it without a lawyer in New York, that’s the city and the suburbs.
    As for the comment that it would be hot to have a lawyer double as a real estate agent. That may be so, but in some situations it could be a conflict of interest.

  24. YIKES! You take a few days off and WHAMO yu miss all the action on RCG. To respond to the points above: I have purchased NWMLS forms using Form 125A, the “Associate/Non-Member Order Form.” I use those forms where there is a listing agent for the very reason identified by Russ above.

    As for “renegotiating” the listing agreement, I don’t do any such thing. I merely point out to the seller, typically in a cover letter that accompanies the offer, that the buyer does not have an agent and therefore there will be no split of the (presumed) 6% commission at closing. It is up to the seller to renegotiate the terms of the listing agreement if the seller is interested in getting “full price” based on the offer in hand. The seller has no RIGHT to renegotiate, but the agent/broker may be willing to do so in order to keep everyone happy (and besides, doesn’t the other 3% represent an unearned windfall under these circumstances?).

    Reba, you’re adamant on the issue, but I’m unaware of any legal duty on my part to refrain from raising the issue with the seller. While there is a tort of Interference with a Business Relationship, that tort requires a duty of noninterference. Here, I don’t believe there is such a duty on me or my client. I don’t see any legal bar to me raising this issue when I draft an offer on behalf of buyers.

    Ultimately, why take such exception to the practice of seeking a reduction in the commission where there is no selling agent? What’s the harm to the selling client? Should the listing agent get an additional 3% simply because the buyer did not use an agent? Is this all part of the continuing effort to prop up the broker/agent/MLS/6% commission model?

    As to attorneys who are also MLS members, there is an Attorney Rule of Professional Conduct (RPC) that prohibits an attorney from forming a business with a non-attorney that includes the practice of law. Therefore, an attorney cannot be an agent (and thus linked to a non-lawyer broker) and still be engaged in the practice of law. In Kirk’s case, he earned his broker’s license, thus gaining entry to the MLS while maintaining the degree of indepence required by the RPCs.

    Finally, as to Sanna’s comment, I agree it could be problematic (for several reasons) where an attorney “doubles” as an agent in the same transaction. I did not suggest such a course of conduct. Rather, an attorney can fill the role traditionally played by the buyer’s agent, recognizing that the attorney will not constitute a complete replacement (although, on any legal issues, the attorney will be an improvement).

  25. you’re assuming then with your letter that there isn’t already an agreement in place between the seller and the listing agent about what happens in the case of an unrepresented buyer and/or when there is an attorney or a non-SOC payment involved.

    In my business we don’t suddenly get a 3% “windfall” as you call it. We’ve already spoken with our clients well in advance of this situation about what will happen and if the buyer is unrepresented then we frequently discount the commission to the seller (I won’t give amounts here to prevent any concern of anti-trust violation) – and if the buyer is unrepresented (no agent or attorney) we as agents still carry a lot of liability so we frequently drop the fee total (each case is considered independently based on specific issues of sale) and if there is representation we’ll credit some (again, I won’t give specifics) back to our seller because they’ve got higher costs of sale than the buyer has to purchase so the “windfall” as you call it goes to the seller, plus as a listing agent it is my job to help the seller get top dollar. Our goal is to help our client receive the highest sum possible in the sale of their home, I represent them and their interests. I don’t see why the buyer should be the one to financially benefit from it in all cases. Buyer’s have options in looking for help on closing costs, they’ll frequently inflate the price a bit and have it credited at closing. They can do a better job of negotiating price based on real issues with the property and not its representation methods.

    I found when we recently worked on a deal with Kirk (he acted as attorney and not as agent) that his client would try and come to us directly for a lot of what he had questions about with regard to his transaction. When I found out the buyer was continuing to contact my business partner directly about a lot of his questions (especially regarding the financial prospects of this rental) I had to tell Michael to start redirecting him to his attorney. We provided him with the information from our seller clients, as is required by our position, but it is not our job to interpret the data for him. We found that while this guy was using the non-payment of an SOC to try and negotiate a lower price he was then skirting the costs of his attorney by trying to get information from us. That’s not our job as a listing agent when we don’t provide dual agency. It was clear up front that we weren’t going to provide it and this guy continued to try and break that barrier – it was frustrating and annoying and until I pointed out several liability issues for our business in his answering these questions to Michael he’d been falling for it.

    It’s one thing for us to provide information in our position as a listing agent, and we meet agency requirements of being fair and honest with all parties, but it is not our job to interpret the data for the buyer when he has his own representation. Even if they were unrepresented it is still up to the buyer to do their own review and to hire the appropriate individuals to help them in their analysis.

  26. Reba: We’re in agreement — we both have an obligation to do the best job possible for our clients, and (generally speaking) we have no obligation to assist or protect the interests of the other party in the transaction. It is based on these principles that I seek a 3% reduction in the selling price.

  27. Jillayne, you asked about attorneys joining NWMLS to have access to forms. I stated in an earlier email that attorneys may order NWMLS forms – they need not be members – but they are restricted as to how often (once a month – I assume to limit NWMLS processing) and what forms (Mary Howard wouldn’t elaborate on that part for me). It is the PUBLIC that is not allowed to purchase forms or to have them provided to them without oversight by an agent OR an attorney.

    If an agent or an attorney is purchasing the forms and then selling them to the public without their involvement in the transaction that is a serious problem. The NWMLS has made it clear that this is not acceptable and I’ve seen cases reported by NAR from around the nation where agents have been sued for doing similar deeds in their own MLS areas.

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  29. Craig,

    Watch it…I almost agreed with you there. It would be an RCG FIRST!

    OK, what the hell. Yes! You, Craig Blackmon, are absolutely correct! The 3% DOES come off the “finally negotiated” price.

    Not that you need me to tell you that you are right, but it’s my Happy New Year present, now print it and frame it cause it may never happen again.

    Happy New Year!

  30. Not only should the attorney be familiar with the area but also with the TYPE of property being conveyed. As an atty in NYC, you should know how to draw contracts and close for single family houses, multifamily/rental properties, co-ops and condos, and new & pre-construction. Each niche is somewhat unique. Make sure you choose a lawer who has experience in your niche.

    In NYC, lawyers can act as brokers. I is not recommended because of possible conflicts of interest.

  31. We don’t mean to ignore your comment HJ, but comment 29 already states that you have to get them through an agent you are working with or an attorney who has access to them. Otherwise the person who might “give” them to you to complete yourself, would be penalized in some way. You could get a real estate license and join the mls. That seems to be a popular method these days.

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