If Closing a Real Estate Transaction is Like "The Bachelor" Who Gets the ROSE?

everyone gets the rose. . .

great post Janet.  I've been on both sides of the fence for a little while now, and while I do have many more years under my belt doing loans versus being a realtor, I can say there's a general lack of understanding from both sides about the challenges we're all having to deal with in this tough market.  All of us, regardless of whether we are lenders, realtors, appraisers, title company employees or what have you, are dealing with a combination of four factors that have led to frustration - 1)loss of control, 2) change 3) unprecedented delays at every step of the process and 4) a general lack of understanding as to the processes required at each level in order to successfully get from point A to point B.  

We've all lost control of many aspects of the transaction.  Lenders and realtors have lost control over appraisals with HVCC, which have resulted in longer turntimes and lost transactions due to many values coming in under market. Realtors have given up control of the execution of contracts to banks and asset managers versus dealing directly with buyers and sellers.

We've all had to deal with change.  Lenders must deal with guidelines that are changing quicker than they can all learn and absorb them, much less relay the changes to realtors and clients.  Realtors have to deal with the longer times it takes to negotiate short sales and foreclosures, not to mention how long it's taking to sell the listings of clients who mostly think their homes are worth more than they really are.  In many cases, they have to invest 2-3 times as much work and time getting a transaction closed, and in many cases they are showing 2-3 times as many homes to find a transaction that's workable. 

We've all had to deal with unprecedented delays at every step of the process.  Short sales and foreclosures, not to mention the huge inventory of homes on the market cause delays.  Throw longer underwriting turn times into the mix and it gets painful for everyone.  Loan officers are having to wait longer and longer to get approvals, appraisals and that's about to get worse with the new TILA changes.  Not to mention, lenders will wait sometimes weeks or months to obtain a final executed contract on a short sale and then the bank expects everyone to close in a week.

And last but not least, we both suffer from a lack of understanding of how these changes and loss of control has affected all of us.  Lenders don't always stop to think about the grueling hours that realtors spend showing homes, not to mention negotiating offers.  And often times, a quircky underwriting condition that changed at the last minute with no notice and that makes no common sense will kill the whole deal. And realtors don't see the many, many dozens of steps that lenders have to take to get from point A to point B, especially with all the nit picking that's happening with loan underwriting.  A mortgage file is usually about 100 pages thick by the time a buyer completes application.  By the time it gets to closing, it could easily be 200-300 pages, and if ONE NUMBER on ONE PIECE OF PAPER is incorrect or outside of guildelines, then it can take a multitude of people to correct the problem. Often times, the mistake is made by a third party and it takes cooperation from them to correct the issue and those third parties don't always share the same sense of urgency that we do.   

But let's not overlook the fact that OUR CLIENTS have to deal with ALL OF THESE ISSUES and they are the ones that have SUFFERED THE MOST in all of this. These days, it's a miracle if things happen as planned, so we all have to work together to communicate even more than we did in the past and we all have to make sure our clients' expectations are in line with reality.  Simply being there for them at every step of the process and communicating effectively can make a sour transaction smell pretty sweet at the end of the day.  I think those of us that are left standing at this point can all recognize this fact and work together to help each other help our clients.  It's tempting to rant sometimes, but in the end, it's pointless IMO to blow off steam about an incident where someone dropped the ball because we've all done it at some point and people will always make mistakes.  Yes, there will always be some bad apples that exist, but that's true in any industry.   Not to mention, I can only imagine how it looks to a client when they get caught in the middle of an issue where professionals are at each other's throats.  Many of the changes we've had to deal with certainly defy logic, especially on the lending side, but it's the system we are all stuck with, so we have to learn to work together because if we don't, our clients are the ones that stand to lose the most.  At the end of the day, I think most of us evaluate our success not by how much money we make or how many transactions we close, but the quality of service that we bring to the table and the experience and level of satisfaction that we can deliver to our clients.  If it's not a good one, we may as well hang it up and go do something else because it woudln't be worth it anymore IMO.

Let's all do a better job of trying to walk a mile in each other's shoes, myself included. It will go a long way to helping us prepare for problems and also delivering a better level of service to our clients.  At the end of the day, that's what matters the most.

Your post reminds me of a time long ago, when I was still a real estate agent...

When we walked out of the attorney's office after the closing, the buyer turned to his mortgage broker and me and said "Wait here for just a minute." Then he went to his car and came back - with a bouquet of roses for each of us.

He appreciated us both equally, because we did indeed work together to help him buy his first home.

I also do not understand the antagonistic path.  We all win when a successful transaction closes.  Every bump in the road that occurs is a learning experience and a chance to hone our skills and be a more valuable asset and counselor to our clients.  The best results for our clients occur when all of the professionals that they are employing work together as professionals to help them cross the finish line and get into their home.  Communication is almost always the key.  We cannot assume anything about the process, especially in todays increasingly challenging market.  We as REALTORSmust understand and communicate our clients goals, challenges and expectations to the lenders.  We are all in this together so let's be professional and get it done right for the client.

I always LOVE reading your posts, Janet!  And I agree with you - people seem so much against each other in this business.  It's really sad.  Although, I have to say I can see how it happens.  With so much fraud and lying and deceit in this industry, it's not a wonder that people who SHOULD be working together don't.

I always LOVE reading your posts, Janet!  And I agree with you - people seem so much against each other in this business.  It's really sad.  Although, I have to say I can see how it happens.  With so much fraud and lying and deceit in this industry, it's not a wonder that people who SHOULD be working together don't.

Janet - Gotta love Patrick's last statement "I personally think the "rose" goes to the closing processor; in my opinion, they desire it?"  I don't know about you but my processor is an absolute PROCESSING GODDESS!  LOVE & ADORE HER!  I literally couldn't do what I do without her and I tell/show her that all the time.  Next to hubby, she's my favorite partner to work with.

Yes, we are supposed to be teammates.  The problem lies within the fact that newer agents might not know how to treat mortgage officers, don't know this market enough to understand what's going on in all it's gory details, might not understand how a loan works, might just be a plain ol' not plays well with others....Also, when you don't get truthful answers or all answers out of your mortgage person, maybe you should switch! Or if you have a buyer that used their own that you don' thavea relationship with, it's hardto know how they work and to even get communication from them.

Janet -

Thanks for a great and timely post.  We are ALL IN THIS TOGETHER whether we like it not and it's simply up to both sides to "make it work." 

Michael

I have blasted some lenders, but overall I appreciate them.  There are several things that happen:

1. When something goes wrong people like/need to point fingers.
   
2. An Agent/Lener cannot afford to have a customer who has other needs/referrals to be upset with them, so point the finger at the other guy.
3. Poor communication on one side or the other.
4. Lack of understanding for what the other side is going through.
   
   

There is one more think I am speculating about.  There may be a referral power shift going to the lenders.  Many buyers are taking care of the lending issues before ever contacting an agent.  Agents need to suck up to lenders more than lenders need to suck up to agents.

We are on the same cause and should work together to go over the finish line! But if I might suggest, you step over the line in many posts from wearing your mortgage hat to the realtor hat.  Just keep wearing that fashion forward fedora you're supposed too.  I sell real estate, you do the mortgages remember?

Janet,

Love your analogies! Very creative!  And... I love my local LENDERS....ALWAYS pleasant, helpful and knowledgable!

Kathy Opatka

Oh, cmon girlfriend, you and I and every other hard-working, dedicated and conscientious LO have already known that for eons.  It's because of this that we don't base our entire business around Realtor referrals (never have, never will).

The shocker is that a Realtor actually stated it in print for the whole world to see but then again, I discovered recently that as Realtors go, Gene seems like one of the good guys.  However, it'll be a cold day in %#!! before you'll ever see a consensus among the Realtor community here on AR that experienced and competent LO's have more to offer Realtors than vice versa.