Why Does A Real Estate Agent Ask Me to Use Their Lender?
So, you’ve decided you are ready to buy a home or condo in Atlanta? You’ve been researching online for sometime now. Getting familiar with areas or condo buildings you think you might like to look at. In doing all this research and reading blogs (ah..hopefully THIS one!) you’ve also seen this thing called a mortgage pre-approval.
Most real estate agents will ask you in their initial conversation with you (we call it a Buyer Consultation) if you have been pre approved. If not, here is our list of preferred lenders. Oh, but I already got pre-approved with Anytown Mortgage. (Names have been changed to protect the not so smart mortgage brokers). What can happen with this?
Well, there are really two scenarios that could take place. First, nothing. Meaning, everything is smooth sailing right up to and through your Celebration (closing)! Awesome! You found a great mortgage broker.
Or, you have a disaster from day one, but to your Celebration…and you find the need for your real estate agent to take you out for a drink!! That is, if you even MADE it to your Celebration!
See, here at MyMidtownMojo and Thomas Ramon Realty, we have a TEAM to help you buy your home or condo. Who’s on your TEAM?
- First and Foremost — YOU!
- Your Real Estate Agent
- Your Lender (Mortgage Broker)
- Your Home Inspector
- Your Closing Attorney ( who helps orchestrate your Celebration!)
We are ALL here to help you achieve one thing….getting the keys to your new HOME! All of these people we have worked with, and have a relationship with. We know they get the job done, and done right. And if they don’t do a good job, you are not happy and neither are we!
But, let’s go back to the lender point again, and I’ll give you not one, but TWO real-life scenarios that just happened this weekend! Oddly enough, they both happened with the same lender, but different loan officers within that company.
Suzie is a single young lady, first time home buyer. She’s got a horrible, 1.5 hour commute to and from work where she lives with her parents. She’s ready to be a homeowner! And cut the commute. She is doing an FHA mortgage and looking for a condo. From my perspective (her agent) this was challenging as many condominium communities have let their FHA certifications expire. And she has to have one that is approved. I search and search and find her about 5 we can look at. Pretty slim number. The last one we look at….in her price range, great location that affords a huge park across the street, walkable to a shopping plaza with a Kroger and Starbucks and some restaurants. We have a winner. We make an offer, and ask the Seller to pay all her closing costs. While making her offer, she asks about these closing costs and if this means her down payment. Say WHAT? Long story short, her LENDER never explained what closing costs were, and Suzie thought she only had to have her down payment…..that’s it. Never would of happened with my lender.
I certainly learned that any future first time buyers I work with, I will be having some loan discussions to make sure they know these things. I thought the loan officer who was getting them a pre-approval would have done so. (NOTE: she was “approved” for a higher purchase price, but in the end, no she was not, as she did not have the money for closing costs!) We are currently working with one of our team lenders to make it all happen and get her this great condo!
Larry came to me through a referral website where we work. He too was “pre-approved” for up to $220,000. He had been out with a previous agent who showed him several homes far, far far from where he worked! He did not want this long commute. I told him we certainly could find something closer. He had some particulars in looking for a condo, and did not want an older complex. That quickly reduced him down to just two buildings. He liked the one! Had a second showing, and wanted to make an offer. I explained that I needed his loan information from his lender. There is an exhibit in the Purchase and Sale Agreement, called a Financing Exhibit where we detail the type of financing he is going to get.
Well, he did not have a copy of his letter. Not the end of the world, right? He sends me lender information (we are writing our offer on a Saturday afternoon). NOTE; condo was shown 4 times before 1pm when we looked at it…..a.k.a. HOT market with little inventory!! Lender does not return my phone call. We submit our offer, we get a counter offer, which includes the request that Buyer provide a copy of their pre-approval letter and we accept it! Yeah, right? Ah, not so fast.
Lender does new approval letter, but does not send to ME…only to the Buyer, who presumes I got it. NOT! When I DO get a copy, it’s not a pre-approval letter but just a pre-qualification letter!!! Ok, so this is bad for both of us. I’ve got a Buyer that has really not been qualified ( I took his word for what he said he had done) and I’ve got an offer with a term I cannot meet. When I finally speak with the loan officer (I had left two messages with no return call and finally found a cell phone number and left a message) I’m told that, NO, he’s not pre approved. OK….can we get him pre approved so I can have a new letter. Loan officer says, “Well, that will take at least a week.”
So, I’ve now got two Buyers, both in love with the places I helped them find, and issues with their mortgage company that may keep them from getting either place.
We are still working on both to try and make it happen.
Neither Buyer would be in this situation had they worked with one of their team members.
Why Does A Real Estate Agent Ask Me to Use Their Lender?
In all fairness to all mortgage brokers/loan officers, not all of them are like this. There are plenty, plenty, plenty of very good ones. But all it takes is ONE not so good one, and your home purchase can quickly become derailed!