Special offer

Getting an accepted offer is just the beginning ....

By
Real Estate Agent

There are so many stresses on the real estate transaction these days for all parties involved.  We all know what Sellers and Buyers are up against during this downturn.  Even though it may be a "buyers' market" in a lot of places it may not be a "buyers' mortgage market".  

We as real estate professionals now need to add a whole new dimension of counseling to our clients on both sides to prepare them for the snags that are cropping up in getting the transaction to a successful closing.  More and more I am seeing and hearing that transactions are falling apart because they are being delayed on the desks of the lenders. 

When I get a listing I try to educate my seller clients about how the process can go once their home is under contract.  I try to do it in a way that will not panic them but I feel that they need to know up front what could possibly happen once the transaction is in the hands of the mortgage company and the attorneys' office.  They need to know that once it is at that stage that I can't "control" any part of it.  This helps them realize that I am not the only one involved in the transaction, that there are many people involved and that I can at best keep them informed of what is happening or not happening. 

For my buyer clients I strongly counsel them to do everything required of them in a timely manner and I try to anticipate what their mortgage lender may have forgotten to tell them is needed in order to complete the process.  FHA mortgages along with the 203K Streamline Rehab loans are an example ... the contractors need to produce a lot of paperwork and are often reluctant to do so which can hold up the works.  In view of this I prepare my clients to interview their contractors thoroughly before asking them to come in for an estimate of repair and to find out ahead of time if they have the necessary paperwork ready or if they are willing to produce it in a timely manner for the lender.  These loans will not close without such necessary documentation.   Being proactive is better than reactive.

I also try to help my clients understand that with all the job cuts in mortgage business the work load is falling on the remaining people who find their desks piled high with files that they now have to manage.  I think they need to be prepared for more realistic commitment and closing dates.  The trouble is what is realistic today?  There are so many variables that we can't possibly foresee.  I hope that by educating my clients to expect the unexpected we can face each challenge without a meltdown. 

A case in point:  In mid-June, my seller accepted an offer from buyers that are pursuing an FHA 203K Streamline Rehab loan with a closing date of August 28 - two full months seemed reasonable enough so I encouraged her to accept the offer.  Problem is the complete file was on the underwriter's desk for over a month;  the buyers' agent was diligent in her pursuit of keeping us updated.  However, she didn't get a lot of encouraging info other that the file is in the underwriting dept and she would be contacted when there was a clear to close.  The buyer (the one who will be paying fees and points to the lender) could not get anyone to return her calls to see what the delay was.   She finally received a "clear to close" last Wednesday. 

It should have been scheduled to close immediately since all parties, including both attorneys' offices knew the cirucumstances and urgency of getting this to closing.  However, the attorneys now feel that it's not important enough to close until next week, Sept 14 (a scheduling issue - give me a break).   In the mean time, all the parties involved are left hanging.  Fortunately, my seller client is not affected as severely as some would be because she didn't have to sell in order to live somewhere else, but that is an exception to what usually happens.  She could have been left in the lurch if she had to purchase something and was waiting for this closing to make it happen.  The buyers thought they'd be out of their rent by the end of August and now are living in boxes and had to pay another month's rent. 

I'm not saying this is true of all lenders and attorneys but it is happening more and more.  How is this acceptable?  Why are people on the closing end of things so callous to what these people are going through?  The lenders and attorneys are being paid by the clients to get the job done but they often act like you are bothering them when the client wants to legitimately know what is going on with their life.   Buyers or sellers can't just cavilierly show up at a closing - they need to take off from work, babysitters to get, movers to schedule, utilities to turn on and off.   Unfortunately, the real estate agent is often the person they take it out on because we were there from the beginning and somehow they hold us accountable for the nightmare they find themselves going through.  So if I can help ward off some of the anger by educating my clients up front about these possibilities it may be helpful.  

I'm sure many of you are going through the same thing and wonder how you are dealing with these issues. 

Richard Brody
Port Washington Properties - Port Washington, NY

I couldn't agree more. Nowadays, it is MORE important than ever to get a pre-approval (NOT just a pre-qualification), and to be certain that the price offered for a house will comp out.

Sep 09, 2009 02:59 AM
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

On some foreclosed homes, they insist on a pre-qualification within five days.

Sep 09, 2009 03:27 AM
Lori Nodine
Plymouth, CT

It is all about that too, but when everything is in place and it just sits on an underwriter's desk it is very irresponsible to the clients that have hired them to get the job done and very rude when the client wants answers and is denied them.  People are losing out on these transactions or incurring extra costs because someone out of our control chooses to not priortize these loans to bring them to closing.  Should we start using "time is of the essence"  in all our transactions?? 

Sep 09, 2009 04:09 AM
Rick Cignoli
Norcom Mortgage NMLS# 71655 Equal Housing Lender - Avon, CT
Sr. Mortgage Loan Officer

Lori ... Seems to me that you need to work with a direct lender that takes pride providing your clients with the same Courtesy, Competency and Concern that you do.

Rick Cignoli

Envoy Mortgage, Watertown, CT

Dec 09, 2009 08:25 AM