Never ask the barber if you need a haircut.
— Warren Buffett
Warren Buffet’s point — that self-interested experts rarely render unbiased opinions — forms the bedrock of the Balch Buyer’s Realty credo. At Balch, we work for you, the buyer, and only you. Unlike traditional real estate agents, we’re not under contract to the seller and not affiliated with a mortgage broker or title insurance and escrow company. As exclusive buyer’s agents, we take no listings and never represent sellers.
The importance of unbiased opinions is becoming clear. In the aftermath of the subprime mortgage debacle, the state of California made it illegal for licensed appraisers to “engage in any appraisal activity that is connected to the purchase, sale, transfer, financing or development of property if their compensation is impacted by the final price generated by the appraisal.”1 New York followed suit, requiring lenders Fannie Mae and Freddie Mac to have independent appraisals — “from assessors [appraisers] who don’t have formal ties with a lender or mortgage broker.”2
We think real estate brokers should be similarly independent and unbiased. Several years ago, when a local real estate brokerage announced plans to have Chase Home Finance loan officers on site in each of its offices, we spoke out against the practice. In an interview with Noreen Seebacher of the Journal News, I said “I like separation between the real estate agent and the mortgage lender, and don’t like the idea of the two sharing the same office. Even though the real estate and mortgage information is supposed to be kept separate, there is a human factor to consider. With representatives from two companies in the same office, there is always the chance some information will be shared.”3
At Balch Buyer’s Realty, the only people in our office are buyers and brokers. You and your exclusive buyer’s agent. We promise you won’t get clipped!
1. San Jose Business Journal, “Measures to protect homeowners, expand affordable options,” 10/03/07
2. Reuters News, “NY attorney general near Fannie, Freddie deal,” 02/26/08
3. “Another real estate brokerage joins forces with mortgage lender,” May 21, 2005