Working as a Team: Tips from a Mortgage Lender

by 17 Sep 2012
(TheNicheReport) -- Lender and real estate relationships are now more important than ever.  While lending guidelines, timelines and documentation are changing weekly, there are fewer mortgage lenders since the housing meltdown.  It requires a strong partnership to guide a borrower from contract to closing.  As home purchasing continues to strengthen across the country, here are some tips and tricks that I’ve learned as a lender. First, as a real estate agent, be in close contact with the lender prior to negotiations over the purchase contract. When you are writing the contract deadlines, consult with the buyer’s lender on the timelines for the appraisal and loan conditions, document delivery and closing. This will set up correct expectations for the seller and buyer and make the transaction much smoother. I received an executed contract recently and the dates were extremely tight. I immediately told the buyer and buyer’s agent. They went straight to the listing agent, but it took weeks to sort it out with the seller.  All parties had problems trusting the deal would close.

Communicating about the dates may be vital if the lender is aware of a situation that will increase the timing on the loan. For example, if an additional party on the loan is out of town, it will take longer to get financials and have documents signed, increasing the time that the loan takes. It is also key for a real estate agent to ask how responsive the borrower has been up to that point in getting needed financials to the lender. This will give an agent insight into the timelines to complete the other tasks throughout the buying process. Also, in contract negotiations, if the buyer and seller are within a few thousand dollars of an agreement, agents should call the buyer’s lender. Sometimes points paid by the seller to lower the rate can increase the qualifying, or the interest rate has dropped and the buyer can qualify for a higher purchase price.

To keep updated on the ever-changing market, real estate agents should regularly meet with their preferred lenders to discuss timelines, major changes in lending, and recent issues and successes. Second, have a communication plan in place. Sometimes this is an organic process that evolves throughout the purchase, but I like to be crystal clear.  For example, I may say, “The appraisal came in today for at least the purchase price. I will be sending the appraisal to the buyer today and giving them a call as well.” An agent needs to know the lender will be communicating with the buyer. If the buyer does not hear from the lender, they may blame the agent for not letting them know. The lender should also state to the borrower, “We have your appraisal. I already let your real estate agent know.” This helps the borrower know that the agent and lender are working as a team. It is also important to set up realistic expectations.

One statement I make is, “You will be married to me for at least a month. I will be giving you a honey-do list. It is important that you having a good relationship with me and my team because we will be asking you for a lot of items over our marriage.” If the borrower comes in thinking that the lending process is five pieces of paper over two weeks, they will be sorely disappointed when things go differently. Any lender can give an agent a sample list of what is needed and a description of the mortgage process. Negotiations may continue from the original acceptance of the contract through closing. It is imperative that any change, no matter how small, be communicated to the lender. I have discovered upon reviewing the settlement statement that a seller was crediting the buyer for closing costs due to an inspection item, or even that the purchase price changed.

It can delay the closing when major things change, so keep everyone informed. As a lender I go through a pre-closing call with the buyer to review all of the final terms of the loan. This helps prevent issues at the closing, but if a lender is not aware of something that changes the numbers, they cannot prevent an issue from popping up at closing. Being in close contact prior to negotiations, communicating well, and setting up realistic expectations are three things that can make a real estate agent and a lender a solid team throughout the lending process.  They also make the transaction smoother for the buyers and help close more purchases successfully. We are all in this together, and when we work as a team to complete transactions, we all win. Happy buyers equal happy closings – and happy closings create more closings!


Kathryn PedersenKathryn Pedersen, Mortgage Officer/VP at Yampa Valley Bank, Steamboat Springs, CO.  She can be contacted at kpsteamboat@gmail.com.

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