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
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