Appeared in the 1970s and still barely visible a few years ago, mortgage brokerage firms are now fully part of the landscape in this sector. In 2015, nearly 40% of real estate loans were traded by a broker.
The real estate broker’s mission
The primary mission of the real estate broker is simple: find the best financing terms for their clients. This obviously involves negotiating the best possible interest rate, but also optimizing the duration of the loan, monthly payments and insurance.
The real estate broker of course pulls out of the game with a flat fee paid by the bank selected for your project.
Appealing to a real estate broker: what profit for the buyer?
The primary role of the brokerage firm is therefore to make you save money on your real estate project. And this benefit brought by real estate brokerage firms is truly substantial. According to a study conducted by the Crédit Logement Observatory in December 2015, the average rate negotiated during the year by real estate brokers would reach 2.20%.
But beyond the financial gain made by the buyer, saving time and energy is considerable. Often seen as secondary, these two dimensions are essential when taking into account the complexity of a real estate project.
Choose your real estate brokerage firm
Like the banking sector, the brokerage sector remains unclear for buyers. In fact, choosing a real estate broker can be quite difficult. However, some criteria allow you to get an idea of the value that your broker could bring you:
- First, consider the size of the brokerage firm. It is a safe bet that a firm whose business volume is substantial will benefit from stronger bargaining power with its banking partners.
- These banking partners are also to be taken into consideration and testify to the quality of the broker’s business network.
- Prefer a brokerage firm near you. It will be able to establish a cordial and close dialogue with banks that sometimes also negotiate loans directly within local agencies.
- Finally, find out about the performance of your broker, on these average rates obtained according to real estate projects: total budget, duration of the loan …
As with any type of project, find out as much as possible before you engage with a brokerage firm, do not hesitate to ask for recommendations … And of course, contact your own bank, you may have good surprises.