Lenders: The Good, Bad & Ugly
Do’s & Dont's when choosing a lender for buying a house
As Realtors we have the unique position & privilege to work with many different lenders. Over the years, as you might expect, we have experienced just about anything you can imagine from absolutely horrible & horrifying transactions, to shout from the rooftops amazing and everything in between.
If you will be buying a home anytime in the future, here are a few things we believe you need to know that will help you make the right choices. But before we get there, we want to tell you a couple of stories; some real life cases where the lender caused WAY more stress and delays that could have been avoided.
Story 1) We finally found "Mrs. Smith" (real name not used) the perfect house! The local lender initially pre-approved with, for whatever reason did not resonate well with Mrs. Smith who took it upon herself to find a replacement lender. This was after escrow had already been opened and she did not consult her Realtors for advice. Mrs. Smith chose to use a lender that she found online who happened to be located on the East Coast. She was impressed by the rate that they had quoted her.
We rolled up our sleeves and went to work, first having to talk the sellers and sellers agents into allowing the change (which was really quite difficult), then to working with a lender that we had no experience with. The transaction appeared to be moving smoothly with the lender getting the appraisal ordered on time, but it quickly went downhill from there. The lender made some critical errors with getting things done properly and on time causing the sellers to threaten to cancel the whole deal multiple times. When it got stressful, the lender even starting avoiding our calls. We were able to finally close, but it was after a 3 week delay from the original contract date.
Story 2) Mrs. Jones (real name not used) asked us to sell her house! We put it on the market and implemented our marketing plan and within a couple short weeks, we had a great offer. The one thing we didn’t like though was that they were using one of the BIG Banks to do their loan. The offer was a good one though so Mrs. Jones accepted it and we entered escrow. The escrow period was for 35 days per the contract. EIGHT weeks later, we finally closed… Nobody was happy, and Mrs. Jones had moved out of her home in preparation of it closing on time… she was in limbo for nearly a month because the Big Bank just couldn’t get their act together.
Now, here are a few things we believe you need to know that will help you make the right choices…
Always consult your Realtor!
Always shop and secure your lender before you get into contract.
Choose a local lender that specializes in home purchase loans
Avoid out of town lenders!
Time zone challenges
No local ties or accountability
Lack of local market knowledge
No access if something goes wrong
BIG/Name Brand isn’t always best
The bigger the company, the more red tape there is…which means more stress!
Most often are out of town (see above)
Don’t make ANY changes! (major purchases, changing jobs etc.)
Ultimately the home buying process is an exciting and fun time, but as you can see, there are a lot of choices that we can make that can either help or hinder us along the way. As always, we are here to help and want to be considered as "Your Real Estate Advisers, For Life"
Adam Kitt & Noel Fielding
The KF Home Sales Team
Quality First Real Estate Group