I know that often times, people hold off on going through the financing process or even choosing their lender until they’ve identified a home they are ready to make an offer on.
I’ve talked quite a bit in the past about the current market and why we need to have all of our ducks in a row prior to touring homes. But today, I want to talk about choosing the RIGHT lender.
… and a little bit of a case study to go along with it!
I’ve got a client who was supposed to close TODAY. That’s not happening because of a series of missteps by the lender who is not a local lender and doesn’t have a great way to communicate with agents and/or buyers. We are, at the 11th hour, working hard to save the deal and get the client over the finish line (and NOT lose over $4000 because of negligence on the part of the lender).
So, first things first…
Shop Local!
This is important for a number of reasons, but here are a few of the TOP reasons!
1. Understanding of Local Market Dynamics. The main benefit of working with a local lender is that he/she understands the dynamics of the market (For instance, in the last 60 days, appraisals were delayed substantially due to so much workload… Or second lien holders were taking 45-60+ days to approve second mortgages).
These are things that ONLY a local lender would know.
The client I reference above chose to use a large institution (who shall remain nameless) against my advice, but she understood the risks and stayed on them every could of days so I felt that if anyone could get this lender to deliver, it would be her! I told the lender FOUR weeks ago that appraisals were taking 3+ weeks to get done right now and they needed to order it ASAP.
As of last Friday, when I was escalating to management for a status update, we were first made aware that they hadn’t even ordered it despite the fact that my client paid for it on 9/1! And from the time of order to delivery, it can take 10-20+ days! Did I mention we were supposed to close TODAY? 😉
SPOILER: The closing did NOT happen today.
2. Direct Contact Info Additionally, a local lender comes with a cell phone number and a means to reach him/her at all times. So… we can stay on top of things! My personal preference is to communicate during business hours, but to have the “OPTION” to reach out after hours and on weekends in case of emergency.
They don’t punch a time card and disappear at 5pm every day.
Surprisingly, because you have great communication along the way, emergencies are fewer and farther between!
In this same deal, I had 4 people including the buyer, myself, my assistant and the listing agent trying to reach out to the loan officer for the last 4 weeks. She had been untruthful with the buyer as to where the file was and what items had been completed (aka telling her that the appraisal was ordered when, in fact, it had never been ordered). I only got a call back from her YESTERDAY after we’d escalated through 4 levels of supervisors!
3. Better Ability to Solve Problems The fact is that a local lender has more tools in their belt. They have direct relationships with processors and underwriters and, while there are still very specific steps and protocols, they have the ability to help move things along a little more smoothly – and quickly – than a national lender with lots of red tape and beauracracy.
NOTE: There is STILL a lot of red tape with a loan and a lot of people that have to sign off!
On this particular deal I’ve been referencing, it has almost fallen apart and cost the buyer over $4000 on several occasions.
As I write this, I’m still working on saving the deal with the other agent (and protecting my client’s interests).
4. Depend on Local Relationships Lastly, a local lender depends on repeat and referral business to feed their family. With a national lender, you’re just a file number and they have certain acceptable metrics which include closing a certain percentage of files. A local lender works hard to close ALL of his/her business (assuming the buyer and the property all qualify accordingly).
Ultimately, the decision of who to work with is yours, of course! It’s just that when we are working with a lender we have a relationship with, things go a whole lot more smoothly for you because we have a true partner to work with!
If not, we have little visibility and access to help. We can’t always get accurate updates and we certainly don’t have any pull to move things along.
If you’re planning on buying in the next 6 months, shoot me an email or a text. I’ll make an intro to a great lender here in the greater Austin area!
Until next time… keep smiling… be kind… and stay safe out there 🙂
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