I just need to air this out in public.
Here in Honolulu, we often deal with new arrivals from the mainland, and God Bless Them, sometimes they are already pre-approved and are ready to buy their new home. Those of us who have seen this before are aware that this is also a double edged sword. The first problem is what almost all mainland clients face, and that is the inevitable "sticker shock," unless the new arrival hails from San Francisco, Los Angeles or like-priced areas. In these cases, the sticker shock is much less severe than for someone from say, Oklahoma City.
The next problem is the one that has my knickers in a wad. The pre-approved borrower is using - you guessed it - a mainland lender. In the best case scenario, the lender has a branch office here, and that will hopefully get the future transaction all the way from pre-approval to closing; caveat, operational term here is hopefully. The truth is, no matter how one might be tempted to sugar coat it, the mainland lenders always find a way to complicate the transaction. This usually occurs the day before, if not the day of recording, when the underwriter stops everything due to some sudden manifestation of an unknown factor. Some big bugaboo suddenly drops on their unsuspecting head and knocks them senseless. What monstrocity is it that suddenly catches these distant underwriters so unwary? Would you believe me if I told you that it is usually an item that most agents had made sure they had addressed early in the dealings, so that this exact scenario would be avoided. Some of these deal killing items are, in no particular order of occurence: 1.)Owner/Occupant ratios 2.)Mixed use zoning 3.)Condominium Declarations
Sometimes the client wants to stay with their mainland lending agent for any of a number of reasons. No amount of logic, pursuasion or threats will get them to seek counsel of a local lender. The really frustrating factor is that the agent can try as he may to have the lending agent cover all the bases with the underwriters, and if the lending agent is also on the mainlaind, about all you can do is make sure that you have provided in your purchase contract for at least a two week extension on your closing date. Once the closing is missed, time lines can be thrown out of whack and the buyers could not only lose their earnest money deposits, but the entire purchase could be put into jeopardy.
When this happens, of course everyone starts pointing fingers at everyone else. As the Buyer's Agent, you will not appear sexy to your client if you raise an eyebrow and in a raspy voice whisper "I told you so." The best advice I was ever given is that if you are the buyers agent involved with a mainland lender, you cannot be satisfied with asking the lender "How is our loan coming" which will always be given the response "Just Fine!", but you must be more pro-active, and constantly ask the lender to give you a line by line item report of exactly what information and steps have been completed, what next steps need to be taken, and what is happening on items that were due to be completed but are still being resolved. In other words, you must make a nuisance of yourself. Even then be prepared to have the bottom drop out right at the end. At least when it does, there is still a chance the deal may be saved, as most likely the problem may have already been addressed previously, and need only be re-examined by the underwriter.
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