No matter how long you're in the business of real estate you never stop learning. Partially because the industry never ceases to shift and change itself. Contracts and forms are always being tweaked by attorneys to cover more grey areas. Markets are constantly shifting up and down. New laws are passed by elected officials causing us to be ever ready to adapt.
So I'm going to start a new weekly post about what I learned in Real Estate the previous week. Some posts may be market or area specific. Others may be more personal at times. But overall I thought it would be good for me and others if I were to pass on any knowledge I may have gained throughout the week. I have also been very and inspired to start a weekly wrap up blog post by other fantastic bloggers on here who do weekly wrap ups with what they learned or read here in Active Rain. I thought I would provide a different spin and instead write a post on what I specifically and personally learned in my real estate journey every week.
This week I learned to go over the basics of a transaction even when it's not your job or industry. In any real estate transaction I typically let the lenders, title company, and other agents do their respective jobs without infringing on their way of doing things. Nobody wants to feel like they are being overbearing or hovering over everyone else. I try my best to allow other professionals to take the reigns and perform to the best of their abilities without me breathing down their necks.
I am currently under contract with a buyer who is wrapping up their home purchase this next week. I referred them to a lender that I have worked with before and who has done a good job in closing the deals in the past. However, a few days ago these buyers of mine decided to open a new credit card in anticipation of purchasing some new furnishings for their new home. Now if you're in this industry you just gasped at reading that last sentence. My heart skipped a beat when I heard it too! You are never supposed to make large purchases, deposits, withdrawls, or start new credit accounts during a home purchase! This is lending 101! I normally do cover this with my buyers, but I have worked with this lender before and I suppose felt comfortable that he would educate them as he had done with other referrals I had sent him in the past.
When I spoke with my buyers about it they stated that the lender never sat down and explained any of that to them. So I called the lender who simply told me that he didn't recall whether they specifically had the conversation or not but it was definitely in the initial packet he gave the buyers. What? You don't recall whether you verbally discussed that with them but you are sure it was in the packet you gave them?
Luckily my buyer's enthusiastic but erroneous misstep is not going to cost them their purchase as the lender was able to somehow get around it. But this event taught me that no matter what aspect or phase of the home purchase process you are in, I need to always educate my buyers in all phases and not just rely on others to do their jobs completely. People make mistakes. Business professionals sometimes get things wrong. I get that. I'm not perfect either. Talking to my buyers about important lending issues is normally something I always cover but I allowed myself to reach a certain comfort level with this lender and trusted that he would do his job as thoroughly as I do mine. But as a lender, to not go over the do's and dont's of borrowing and lending with a client is a complete failure and disservice to them. It could have caused them to lose their home.
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