Tuesday, February 3, 2009

Warning - Realtors Giving Financial Advice

Our previous post warned about getting financial advice from a Realtor. We noted that to be a realtor in New Jersey you did not need much other than an high school diploma (or GED), taking a 75 hour course, passing an exam, and to find a sponsor to hire you. Many places offer the course in a 12 day program. Pretty scary when you realize that this is all the requirement needed. From the NJ Reatlor's themselves, less than 1 in 2 reatlors has a Bachelors Degree! Directly from them -

The report found that the typical REALTOR ® has been in business for 10 years, compared to the national median of eight years. Nearly half of all REALTORS® in New Jersey have a bachelor's degree or higher (45 percent).

If all Realtor were doing was selling properties that would be one thing. But thinking this background is strong enough to give out financial advice about one of the biggest financial decisions most people make in their lifetimes is scary. Although we are not anti-realtor, we are against real estate agents giving financial advice when they have no background or qualifications to do so! This ought to be against the law! Losing one's license at the very least. Being able to sell a product does not give one the understanding or knowledge to dispense financial advice! We wonder how many realtors even understand half of the mortgage products out there? We have talked to post-graduate degree professionals that get confused about some of the products out there.

Finally, aside from "Real Estate Math" portion of the class what other financial tools are taught in the 75 course? And what is real estate math anyways? Learning how to compute commissions? Or other real estate math, like the wonderful financial advice "don't look at the full purchase price, just look at what your monthly payments will be." How did that work for the ARM and Option ARM holders? Not so good...

1 comment:

Anonymous said...

Real estate investments - As Senate Republicans and Democrats continue to bicker over the details of President Barack Obama’s stimulus plan, Treasury Secretary Timothy Geithner waits in the wings ready to unveil yet another bank bailout bill.

But almost forgotten in the headlong rush to devise measures to create jobs and save the financial system is the total cost of the government’s commitment to solving the economic crisis.