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Lenders not doing thier homework,are your buyers really pre-approved?

By
Real Estate Sales Representative 778503321

      We hear all the time as realtors , do your homework, get your buyers pre-approved before you put them in your cars or show them any houses. While this is advice I truly believe should be taken to heart, just because you get your buyers "pre-approved" does not mean you are in the clear all the way to the closing table. 

       Some lenders really do their homework, but some simply do not. I have had numerous situations happen that are just inexcusable in my eyes. I will explain to you just a couple options of what could happen with "pre-approved" buyers if you don't find a reputable lender that actually does the leg work up front. 

 

       1. I was told my buyers were pre-qualified, not even just pre-approved which is a big difference. I was sent a pre-qualification letter to submit with our offer before we even started looking. We found a house my buyers LOVED , we made an offer and it was accepted. Yay ! Everything is going great, right? So we order the inspection and negotiate repairs. All is well and we are ready for the lender to order the appraisal. The lender then tells us 2 weeks prior to closing that the buyers will not be able to get the loan because he overlooked the fact that the buyer was seen as "self-employed" by the irs and her company. Wouldn't you think this is something that should be checked into UP FRONT?? I would, but who knows, maybe I'm just a little weird like that. 

 

       2. I was told my buyers were pre-approved so I began showing them houses. They told the lender in the beginning that they would be having to do THDA financing so they could have 0 down payment. Lender knew this UP FRONT. We make an offer and it is accepted. Luckily, before my buyers wasted money on an inspection, the lender calls me and says they will not be pre-approved for a THDA loan because they would have to have a higher credit score. Ok, so since the lender knew in the beginning they would be getting a THDA loan, don't you think he should've checked , or known, credit score limits ? 

 

      I always cringe when I hear "Oh,I already have a lender I'm going to work with" from my buyers. I have great relationships with a few lenders that I know will do their homework up front and we will not run in to these issues. If the buyer is bringing their own lender to the table it always makes me uneasy. Who knows if they know what they are doing? The only problems I ever have are with lenders that my buyers bring on their own. 

    Let's face it, even if there is bad news, it is WAY better to hear it up front so nobody wastes anyones time and no buyers get their hopes up. Our lenders need to do a better job of checking everything up front. I think a lot of times lenders put the cart before the horse, just my $.02.

Disclaimer: This is not aimed at all lenders, if you do your homework, this should make you as sick as it does me. Yay, for you for being one of the great ones ! 

 

Check out my website at www.buyfrombianca.com for real estate listings, tips, advice and a completely free first time home buyer book to walk you through the process of buying a home!

 

Comments (1)

Jennifer Barbera
Houston, TX
Real people, Real stories, Real solutions

I love this blog because it is the truth!  I am unsure of the actual percentage, but I know its all too often that I've been asked to "save the day" when a previous lender has not done their due diligence and things that could have been easily remedied become explosions much too late.  Sometimes, things happen that you can not anticipate.  But even so, a good lender will become creative and rework the loan scenario to meet the need of the customer (and the agent, who, in my opinion, is ALSO your customer).  We don't make money or relationships on applications people, we make them on CLOSINGS.  So what's the point?  Tame the beast of up front, there's no other way to go.  Not to mention, this is someone's LIFE here.  Buying a home is extremely important to these folks, how do you sleep at night just saying, oh well I made a mistake?  And that's my 2 cents

Jan 17, 2014 06:11 AM