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As In Any Good Relationship...just tell it like it is

By
Mortgage and Lending with Diverse Solutions

Just Tell It Like It Is!

- You don't have a pre-approval yet? Just say so! Admit that all you've done is a pre-qualification and you still need to verify all of the paperwork to see if they really do qualify.

- Buyer doesn't qualify? Just say they don't! Don't revert to the "well we have a thousand loan programs, I'm sure we can find something" mentality. Instead, get them on a quarterly plan to buy later. Save yourself the time and save your Realtor their valued time!

- You underestimated the closing costs? I've seen this happen one too many times. A buyer is quoted $8,000 in closing costs yet the final HUD reflects $12,000 in closing costs.

Buyers: if it sounds a little too good to be true, it probably is. Ask for the estimated HUD directly from the escrow company. They should have no problem forwarding you this document. It will be a more accurate estimate of what should be reflected in the GFE.

If your purchase is in jeopardy because you underestimated the closing costs and your buyer doesn't have enough funds to close, you need to let the Buyer's Agent know of your mistake immediately! There is still a chance that both Realtors can negotiate some Seller Concessions in order to close. It's not the most pleasant situation to tackle, but admitting your mistake and working out a solution is always better than having an escrow fall out.

- You forgot to lock in the loan or your rate lock expired and the loan program has been discontinued. This scenario has become all too common in the light of the changes in the mortgage industry as of August 2007. Unfortunately, unless you double-app.'d your loan application, there's not much you can do here but admit your mistake and save your buyer his earnest money deposit. Inform the Realtor as soon as you can and save face.

- You quoted your buyer a 6.25% interest rate when you know very well they won't qualify for anything less than 6.75%; you haven't run credit or taken a loan application. The good ol' bait-n-switch routine! This one is all too common in our industry.

The worst scenario is this one: a client called me to inform me that she had 7 days to close on her escrow. The Real Estate company's in-house lender had quoted her a 6.5% interest rate on a 30-year fixed rate mortgage. They came to the closing table with a 7.99% interest rate and $5,000 more in additional closing costs. Good for her, she walked away!

 

If you call me out of the blue and ask me,

    "What's your rate?"

        Response: "I don't know." (I need to ask you a few questions first. I'm not going to blow smoke up your butt!)

If you angrily respond,

    "What do you mean you don't know???"

         Response: "Well, what do you want me to say? 5%? 6%? How about 6.25%? The truth is, I'm not going to blow smoke up your @$&! I need to run your credit and verify some figures. Once it all checks out, I can put a rate on paper for you! I'm going to tell you like it is! Sound good?"

 

 

Copyright © 2007 Ricardo Bueno | All Rights Reserved

Direct: 323.810.2175 | rb (at) ricardobueno (dot) com    

www.ricardobueno.com | www.industry-report.com

Comments (13)

Ricardo Bueno
Diverse Solutions - Los Angeles, CA
Hey Michael: you know what, I have to say that I feel your pain. Appraisers are the first people you point the finger at when a deal goes raw. It's often, "the appraisal came in short. He's such a jerk!" 
Nov 04, 2007 05:22 AM
Gary Miljour
American Financial Network, Inc. NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Ricardo,

I admire professionals like yourself that can be just honest and upfront with your clients.  For all consumers out there you have choices, and picking a professional who is honest and upfront, will pay big dividends later. 

Nov 04, 2007 06:02 AM
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate

Ricardo - This is so right on.  The best thing we can do when things change or we make an honest mistake is tell the truth.  I used to have a sign over my desk that read:

How to avoid criticism:

Say nothing...Be nothing...Do nothing!

Nov 04, 2007 12:26 PM
Sandy Noll
(RSVP Real Estate) 425.890.0878 - Gig Harbor, WA
RE Pro Serving Snohomish to Thurston Counties
Ricardo I like your approach.  I wish there were more like you!  Sometimes we make costly mistakes but the best thing we can do for everyone is own up to it and figure out a solution.  Great post!
Nov 04, 2007 12:29 PM
Ralph & Susan Alvarez
REMAX Benchmark - Las Vegas, NV
Real Estate Agent Las Vegas NV

Upfront and Personal

The consumer may not like it but in reality it is putting them first to try to protect them.

I've lost several clients trying to be up front with them. at first I got bummed and then I thought, it wasn't with me they got burned. You can only do so much to help.

 

Thanks for the Post

Ralph, Las Vegas 

formally from Los Angeles

 

Nov 04, 2007 01:44 PM
Ricardo Bueno
Diverse Solutions - Los Angeles, CA

Gary: thanks for stopping by and thanks for the many compliments! 

By the way, the website is lookin' first class!

Marlene: I've been reading "How to Win Friends & Influence People" by Dale Carnegie. One of the opening lessons is to never criticize so I love the sign! 

And with respect to making mistakes, we all make 'em. The best thing to do, as hard as it may be, is to own up and move on. A lesson I'm fortunate to have learned early on.  

Nov 04, 2007 05:50 PM
Ricardo Bueno
Diverse Solutions - Los Angeles, CA

Sandy: thanks for the compliment! As I said to Marlene, owning up is the best policy!

Ralph & Susan: It's true, sometimes you lose some. But the truth of it is, I'd rather do business with someone who appreciates my straight shooter personality. There's enough business out there! 

How are you liking Las Vegas?  

Nov 04, 2007 05:53 PM
Kathy McGraw
CELLing Realty - White Water, CA
Riverside County CA Real Estate
Yea tell it like it is, and hey what happened to your pictures LOL :) :)
Nov 04, 2007 05:58 PM
SHAUN WREN
LICENSE IS NOT PLACED - Lakeland, FL

Awesome.  What do you think it is? Without all the information, your guess is as good as mine.

 

Nov 05, 2007 01:33 AM
Ana Connell
G & C Properties - Burbank, CA
Burbank Real Estate Agent

Good post Ricardo, more people should "tell it like it is"

 

Nov 06, 2007 09:10 AM
Sandi Bauman
Chico Homes Real Estate - Chico, CA
Chico CA Realtor

Ricardo-  I liked this post. A lot.  There is NOTHING worse than when somebody can't just tell it like it is-- be it a mistake, or an uncomfortable truth, it's just better to get it out there!  Saves time, business, and friendships in the long run.

BTW-  You did get my email through your site yesterday... right? 

Nov 06, 2007 03:41 PM
Tom Plant
WINEormous.com - Murrieta, CA
Ricardo - Right on. I think what others are saying is that  looks like there's a missing image or video at the bottom of your post.
Nov 07, 2007 03:36 AM
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties
Ricardo, I love this post and Aaron Neville. I live my life by your credo. I am a "tell it like is" lady. No other way to go. Nice Post and love the song!
Nov 07, 2007 10:00 PM