Does Your Realtor Deserve to Be Considered a Financial Advisor or Not?

05 June 2018
Joshua Chisvin

Here’s the question: is it a good idea to consider your real estate agent a financial advisor? Seems a natural fit, right?

As always, there are flip sides to this coin. Certainly, on one hand, you can make a strong case that youshouldn’tconsider your real estate agent a financial adviser, either in an official or unofficial capacity. Ever.

For one, as much as we’d like to, us sales representatives can’t predict the future. I mean, who can? Sure, we are able to accurately address current market conditions, as well as offer recommendations on what specific properties are worth, what they might sell for, that sort of thing. But there’s a big difference between a realtor doing that and looking at how the markets have been performing, then recommending in good faith that the real estate won’t ever go down. Or, that any one investment will someday be valued at a significant increase. Simply put, it’d be both impossible and irresponsible to make such a guarantee — in equal measure, at that. Heck, bonafide financial advisors aren’t even allowed to put forward similar claims. So why would you count on your real estate agent to?

What’s more, we admittedly don’t always know all the particulars about your respective financial situation. Yes, it’s our job to be in tune with how much you are approved for your mortgage, as well as how much you can quote-unquote afford, be it on a monthly basis or what have you. We can also suggest what to put your money aside for, from closing costs to furniture and the like. But that doesn’t mean we’re automatically in a position to consider your other debts. Or what you have stashed away for retirement. Or the cost of raising your kids. That’s because we’re predominantly focused on assisting you in buying or selling your property! (Duh!!) Meaning it probably ain’t prudent to expect your agent to fully be familiarized with how your home buying decision may or may not impact your general financial situation. So rack that up as another point against considering your realtor a financial advisor.

And finally, for all you pessimists out there who think every real estate agent is only out to make a quick buck, I do acknowledge that’s a legitimate concern as far as this topic goes. After all, realtors are paid to sell. Which means serving as a defacto financial advisor could become a conflict of interest, considering it will always benefit your realtor if you spend more when purchasing a home. Not saying that I or any credible agent I know is strictly motivated by the bottom line, but hey, there is an inherent incentive.

On the flip side, there are definitely a few important reasons youcouldconsider your real estate agent a financial adviser. Again, not necessarily officially. But nevertheless, we’re equipped togive qualified direction about how to structure a deal correctly and decide what funds to use when purchasing a property, as well as what amountand what kindof leverage to apply. If any, that is.

What’s more, we’re typically well-schooled in complex tax and mortgage calculations. Fluent, even. Obviously you’ve got dedicated professionals serving those realms, but I guess the point I’m trying to make is that just because considering your real estate agent a financial advisor isn’t the way go…

… it doesn’t mean we’re unable offer valuable fiscal information!

  Real Estate