If the only people you listened to were . . .

   If the only people you listened to were Loan Officers, you might wonder how any real estate deal ever gets closed because all real estate agents are egotistical, greedy, incompetent idiots. Likewise, if one only listened to Real Estate Agents, you would hear exactly the same complaints about Loan Officers. And oh yes, everyone is in total agreement that the other side knows nothing of how to communicate and is totally ignorant of what it takes to get a real estate deal to closing. Here is the first paragraph of an article I read yesterday:


“Ten years of experience in the real estate industry and last week I went through four contract extensions, a six hour settlement waiting for HUD-1 approval and scrambling around getting documents signed the following day so that the loan wouldn’t be recalled, all for the same transaction! There has to be an easier way and in my opinion it starts with good communication between the Loan Officer and Realtor.”


   I’m afraid we have all participated in a closing from hell, and the business being what it is, we will probably get dragged into another one. Heaven help us! What does it take to close the deal with the fewest problems? Here are the things that need to be mutually understood, completely, by all parties, buyers, sellers lenders and all their respective agents and assistants. Each agent has their own client’s interests to protect, but without mutual understanding and respect, everyone looses.


   The first thing I think we can all agree is necessary to bring a contract to a smooth closing is complete, open and timely communication.


   In today’s market preapproval is exceedingly important. Realtors put in a lot of work finding the property which fits their client’s desires. If the loan officer has not done a complete job in the preapproval stage, the Realtor’s work is for naught. While a Loan officer is not legally able to share certain private information; it is helpful for the Realtor to know exactly how the approval or qualification letter was generated. The loan officer may reveal the following:


   1. Was documentation collected to verify the information taken for the loan application i.e., paystubs, bank statements, tax returns, credit reports, etc.


   2. Has the borrower’s loan application been run through a desktop underwriting program? 

   “Form Letter” pre-qualifications don’t get it anymore. In today’s world, an 830 FICO may not get a buyer a mortgage.


   3. Is the borrower in need of closing help from the seller, if so how much? If sufficient information has been collected to issue a preapproval, the Loan Officer should be able to address the issue of closing costs, and tell both the client, and the Realtor that help with closing costs will or will not be needed. There is no sense going to the closing table without the closing costs being covered. Potentially the buyer may be getting down payment assistance from a government agency. Down payment assistance is not normally disclosed in a pre-approval or prequalification letter. This is important information that may impact the seller of a property. It should be disclosed at time of the contract offer so that the seller can make an informed decision and complete disclosure helps the buyer and seller to build a relationship of trust in the transaction.


   4. Realtors need to know from the start what it will take to get the deal done. Many solutions can be negotiated, but not after the deal is set. Knowing the numbers and facts up front will make the deal easier for all concerned.

    5. Both sides need to have a list of the people involved in the transaction and their contact information. On the lender’s side, the names and contact information for: the loan officer, office or branch manager, and possibly even the processor; and the same goes for those on the Realtor’s side. The title company should be included, especially if there is a foreclosure or short sale involved. Then there are all the others who may or may not be involved in every deal, but if they are they should be included on the list, the Accountants, attorneys, inspectors, engineers, etc. Sometimes there are synergies and relationships that may be called upon to expedite the total process. When everyone is working as a team, the goal is getting the buyers and sellers to the closing table in the most expedient way possible.


   6. Everyone should know, to the best of the collective knowledge, what the time frames are for the various steps to approval. All parties should be informed, in a timely manner, if any problems crop up along the way. Much of the frustration in any transaction is generated from expectations that are shattered by misinformation and maybe even outright deception. There are a significant number of people that need to be kept informed of the progress in a transaction. When everyone is clambering for info and no clear answers are being given, the transaction starts to fall apart. Buyers waffle, sellers refuse extensions, and everyone begins to panic. Phone calls increase and stress levels go off the charts.


   7. Answer and return phone calls. The first thing everyone thinks when they don’t get return calls is that something is wrong. Even bad news can be managed more easily if approached immediately and honestly. If you have set hours during which you will receive phone calls, then you must have set hours when you will return phone calls. It is important that calls be returned to those who are expecting them, in all cases. Also send regular email up-dates. We are in an age of constant communication, it is expected and it is required. Send regular email updates to keep all parties informed of progress or delays. Communication is the key and updates are the grease making for a smooth contract closing.


   The common consensus is Realtors hate Loan Officers, and Loan Officers hate Realtors. In my opinion we are on the same team, the team that makes things happen for our clients. To do that, both Realtors and loan officers must respect what the other does and everyone must work together to create transactions that leave the clients happy and ready to refer!