What Buyers and their Agents can do to guarantee to win more contracts

After a bunch of research and trial and error, I believe I've found the secret sauce to winning more purchase contracts.  It is broken down in 2 parts.  The responsibility of the buyer and agent, and the responsibility of the loan officer. Here goes!

What Buyers and their Agents can do to win more contracts...

1. Make a BIG deposit.  We are talking 5% - 10% of the sales price.  You know the saying… money talks… and something else walks!
2. Put in a 7 day financing contingency.  Not many lenders can make that happen (find one that can... they are out there).  The seller will look at this as a VERY STRONG component of your offer. 
3. Close in 30 days or less, preferably 3 weeks.
4. If your loan isn’t a no-money down or max FHA financing, you can waive the appraisal contingency.  This may sound risky or even stupid, but it's not.  There are simple ways to structure a “back-up plan” should the home under-appraise.  This can be done without even changing the rate or payment of the loan.  Low appraisals are all too common with appraisers struggling to “keep up” with the higher sales prices. Waiving the appraisal will vault you to the top of the competing offers and help you get the home for a lower price.
5. Have your loan officer SPEAK to the listing agent… and for heaven’s sake, make sure the loan officer is reachable by phone at night or the weekend when the listing agent calls!  This is a difference-maker.  See Below as to what specifically should be communicated to the listing agent. 

What your loan officer must do to guarantee you win more contracts…

First and foremost, it helps if your loan officer is local, experienced, and has a well-known reputation of getting loans closed on time.  Online lenders, credit unions or big insurance companies with a mortgage arm can hurt your chances of winning the contract. Here is an example of 3 basic things your loan officer must do and communicate to help clients win that contract.

1. Have the loan fully under-written and pre-approved.  A very strong “approval” letter must be used for the offer.  Understand that most lenders do very weak prequalification letters with no pre-underwrite. 

2. Make a personal phone call to the listing agent.   The following should be communicated:

• Confirm having verified all the financial information regarding income and assets.  They will ask.  If a lender can’t speak to this, you will have no chance to get the house in a competitive situation.  Note that this requires the borrower to speak to the loan officer early on in the process and get all their financial docs submitted.
• Communicate if you have processing and underwriting in-house.  This is a very big deal and is the key to being able to act quickly and efficiently.  Most loan officers have these very key components done outside of their branch.  Having all processing and underwriting local was the #1 thing I require for my group.
• Guarantee closing with a $1000 gift card for the seller.  See below, but I feel that your loan officer should put their money where their mouth is and pony up some cash if they don’t perform. Buyers are putting their deposit as risk so I feel the loan officer should have some skin in the game!
• Communicate a back-up plan that will not negatively affect the approval even if the appraisal comes in low!!   This is easily done for conventional loans.  FHA and VA are more difficult, but doable.  We are essentially waiving the appraisal contingency without actually waiving the appraisal. 

3. Follow up letter to the listing agent and seller.  Good follow up is always appreciated.  A simple note to the listing agent and seller goes a long way.  A conversation with a listing agent sometimes can go in one ear and out the other, so you should document your above points in a format that will help them share with the seller.  

Please let me know what you think and if this has helped you.  It has worked for me!   ~Rick Elmendorf