As real estate agents search for new ways to brand themselves as specialists in the real estate transaction, training in the financial aspects of real estate buying and selling is more important than ever. A designation offered by the Residential Financing Council could be an important factor for agents who want to keep themselves at the center of the transaction.

The "Certified Finance Specialist (CFS(r) designation is designed to signify competence and experience in the area of real estate finance, says says Charles Dahlheimer, president of North American Consulting Group, Inc., and former president of REBAC and cofounder of the Accredited Buyer Representative (ABR) designation. Open to real estate and mortgage professionals, the designation is designed to bridge the link between the growth of buyer agency and a new focus on financing.

"The successful agent of the future will be recognized as a professional counselor and negotiator, one who can help the consumer interpret and evaluate information, provide advice and counsel, structure negotiating strategies and manage all aspects of the real estate transaction," says Dahlheimer.

As consumers become empowered with vast amounts of property information via the Internet, their confidence in agents hasn't necessarily grown. Brokers and agents complain across the country of commission compression, and competition from limited service or discount brokerages has put more pressure on traditional agents to distinguish themselves from low-cost competitors in new ways.

According to the "Future of Real Estate Brokerage," a study commissioned by the NAR, the number of real estate transactions has increased, but brokers are not reporting a comparable rise in profitability. In order to restore and enhance profitability, the broker will employ higher-cost technologies to serve consumers more efficiently and develop ancillary services to reduce dependence on commissions as revenue generators, all of which could result in a "a shift of power away from the agent toward the brokerage firm."

Dahlheimer sees an agent well-versed in finance as an asset to the consumer and the brokerage. The proliferation of loan products and the increase in unprincipled lenders using predatory practices, and the rise in buyer's agency all point the way to him that finance is the next great consumer opportunity.

"If the real estate agent is truly representing the buyer's best interests in the transaction, it is necessary for the agent to know what options may be available and to counsel the buyer not only in seeking out the best options, but also in helping them interpret the data that is available," says Dahlheimer.

The designation course is designed to teach agents how to detect and assist the buyer to challenge "junk" fees, to educate them about credit scoring and "A", "B" and "C" paper loans, and how to help buyers pick the loan that's best for their circumstances. Seller's agents are instructed to offer "buydowns" instead of reducing the prices on their homes when they don't sell. Applying a few thousand dollars to help a buyer buy down an interest rate is less expensive than reducing the asking price, he says.

As members of the Residential Financing Council, designees would also have access to marketing strategies, such as how to put on specific consumer education seminars to attract first-time buyers, investors and transferees.

"We don't want to teach Realtors to be mortgage brokers," says Dahlheimer, "but we want them to understand how to interview lenders to ask them how they charge and what their fees are and what kinds of products they offer. We teach them how to qualify the buyer initially, and before you show them property, to get the buyer to a lender. If you are working with a buyer who isn't willing to pay the credit application fee before finding a home, then you don't have a motivated buyer. We're saying get them preapproved. "

Dahlheimer says that Cendant Mortgage has already put a number of lenders through the designation course. "If the brokers and agents use the same class," suggests Dahlheimer, "then when the situation comes up of a buydown, the agent can go to the lender who knows how to do one."

With interest rates remaining low, buydowns may not be as important as they were in the days when interest rates went routinely over about 8 percent, but Dahlheimer thinks they are headed that way again. When interest rates go up, he says, agents better have strategies in place to get homes sold.

To become a Certified Finance Specialist, agents must become members of the Residential Financing Council and complete the Certified Finance Specialist designation course. The course is available on CD-Rom in 10 sessions. It entails about 12 hours of training, which would take two days if the course were offered in a classroom. Coursework is finished with a 100-question exam which can be taken in front of a local association or other proctor which is not associated with the agent's office. Finally, the agent must summit evidence of having used financial expertise in several transactions. Forms for application and evidence of financial expertise are online at www.rfcouncil.com.

Published: April 22, 2003

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