It's a Loan Officer, Not a Serial Killer!

Real Estate Agent with Remerica Integrity, Realtors®, Northville, MI

It's a Loan Officer, Not a Serial Killer!

Scenario #1. You call a real estate agent because you saw a house online and would like more info. Agent describes the house and you get excited, it sounds exactly like what you're looking for. You say, "I gotta see this house! When can we go?" Agent's response, "Have you been in contact with a Loan Officer?"

Scenario #2. You and your spouse have been driving around the city, looking for "for sale" signs in front of houses that you're interested in. This is one of the areas you've always wished you could buy your first house in. House looks great. There's even some young kids playing basketball next door. They seem to be right about the same ages as your kids. Your wife dials the number on the sign. "Hi, this is Eric. How can I help you?" "Um, hi. We were wondering if you could tell us more about the house at 123 Perfect Lane?" After hearing all about the house, you've just gotta see the inside! When you ask, the response is "Do you have a pre-qualification letter from a lender yet?"

Scenario #3. You just got a raise at your job. The lease is just about up on your apartment, and a few of your friends have purchased homes recently. It's your turn. You sign up for lists of homes from a dozen real estate sites. They're all the same lists, but whatever. You thought there might be something special out there and you didn't want to miss it. You find a few that you want to look at. That's when you call your friend, who's been in the business for a while. You tell him that it'll be cool to hang out and look at some homes, maybe get a few beers afterward. Friend agrees and says, "Before we hook up, have you talk to a lender yet? If not, I have a few that I've worked with in the past that I could recommend, because we need to make sure you get pre-approved before we start looking at homes."

See the pattern here?

There's a reason that we want you to talk to a Loan Officer before we go out to look at homes. A few reasons, actually.

  • You need to take a look at your credit history. Lenders have minimum credit scores that need to be met before lending money for a house.
  • You might think that you can afford a certain amount, only to learn you have to look at homes that are a lot lower than you thought. Conversely, maybe you can qualify for more than you thought, and your dream house just got a lot nicer. Looking at homes that you could never qualify for is depressing. Trust me.
  • We run a business. We don't get paid unless you purchase a house. If you can't purchase, we can't waste our time, money or resources. It doesn't make business sense.

Debt to income ratios, time on your job and amount needed are a few more things that they Loan Officer will have to figure out before determining how much, and IF you can qualify for a mortgage loan.

Sometimes it's scary to find out what your credit is, or what you can truly afford. Sometimes it's even better to continue renting for a while to save up more money for that down payment or to pay off a few credit cards. The Loan Officer will help determine the best strategy for you.

Ultimately, a trustworthy Loan Officer is an integral part in the house/condo buying process. They can be an ally. As long as you remember, It's a Loan Officer, Not a Serial Killer!


Re-Blogged 22 times:

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Dan Pinson
International Realty Partners - Phoenix, AZ

Loan Officer aka Reality Check

Mar 12, 2012 06:09 AM #168
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Dawnita, you're welcome.

Dave, let me get this straight. If I don't have a prior commitment, not only should I show up to let someone into a house, but I should have a lender in tow, so we can both talk to the potential home buyer about the process? You also said that we "can't afford to turn away potential business." Potential business, to me, is someone that can actually purchase a house, not someone who wants to "look" at a house. Can they afford this house? Can they qualify for a mortgage for this house? If they're "not yet" at the point of seeing a lender, why would I take the time to show them homes?

Aaron, what do you mean lying? If I ask, and they say yes, I've talked to a lender, the next step is to either get a copy of the pre-approval to me or give me their lenders contact info so I can follow up with them.

Dan, that's perfect.

Mar 12, 2012 09:37 AM #169
Edy Kizaki
eXp Realty - Seattle, WA

Sorry, all of you that won't show a home or meet up with a potential client before popping the Lender question, but I never do that.  In the numerous properties I've sold (top 2% in King Country last year), once there was one girl who ended up not being qualified.  I also bought this girl lunch, before I knew she wasn't qualified.  HORRORS!  I bought a nice person lunch and had a great conversation and gave her some good advice, and didn't get paid for it!!!! However, the other 129 sold homes turned out ok, including multimillion dollar homes.  I guess I'll keep doing what I'm doing. 

Mar 12, 2012 12:22 PM #170
Paddy Deighan JD PhD - Vail, CO
Paddy Deighan J.D. Ph.D

it makes sesne to call a loan officer first, but many seem to ahve not read the common sense memo regarding the purcahse of a home!!

Mar 12, 2012 01:46 PM #171
PRG Real Estate - San Jose, CA
VA Home Loan Specialist - SF Bay Area

Great Catchy Title and even better explanations! Buyer's need to be ready if they are going to need financing.

Mar 12, 2012 02:45 PM #172
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Edy, I also have had plenty of conversations and have bought lunch for people who didn't purchase a home. That's not what I'm saying. Selling 129 homes last year must keep you extremely busy. How could you possibly find the time to run around showing homes to anyone who wanted to see them? I mean, I'm sure you never ask about the pre-approval or a mortgage contact until you're about to write up an offer, right?

Paddy, it's in the top 1 or 2 things to do, for sure.

Jairo, yup. And if they just want to look at homes without being asked about financing, Edy (comment #173) will be happy to show them around and maybe even buy lunch.

Mar 13, 2012 03:46 AM #173
Alan Grizzle

Great Post, I liked it on Facebook and tweeted it as well. So many people want to look at homes and have no clue if they can get a loan or not. 

Mar 13, 2012 04:03 AM #174
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Alan, thanks for all the social media love! I really appreciate it.

Mar 13, 2012 05:19 AM #175
Monique Ahlers
Coldwell Banker Pacesetter Steel REALTORS® - Portland, TX
When it comes to Real Estate, You Need to Speak wi

Eric,  Wonderful post!  As Professionals, in my opinion, it is our job to guide our clients through the process with as much ease as possible.  Contacting a Loan or Mortgage Officer is step one (or if a cash buyer, a letter from their Bank). And yes, it will save my time, however, it saves them time too.  Also, it's nice for them to have the reassurance of a pre-approval so that they can make an offer on whichever home I show them. 

Mar 13, 2012 06:17 AM #176
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Monique, I can still put "contact a mortgage pro" in step 2, right after the initial consultation with a real estate agent.

Mar 13, 2012 07:14 AM #177
Dave Kohl
First In Promotions - Chicago, IL
Real Estate Advertising & Marketing Expert

Eric, I don't expect you to randomly show up with a lender "just in case". An agent taking a call about a property should not bail out the very second the caller says they do not know if they qualify. The idea is (or should be) to learn the caller's motivation. Ask him/her where they are living now, whether or not their current home is on the market yet, and if they could move in within 30 days. Has he/she looked at other homes on this block yet? Working with a Realtor yet?


By that point, you may not need to ask whether or not they have a lender. If, and only if, the caller gives solid answers but either does not have or won't reveal that they have a lender, THEN it's worth your while to pursue having a lender available to them.


Many consumers know "the process", but don't want to let on what they know until or unless they can gauge your level of service.


How do I know this? The agent I was working with showed a multi-family property I was part owner of to an individual that was acting on his own on behalf of family members. He wasn't "qualified" financially but said the others in his family, when combined, were easily qualified. He did not have Realtor at the time of the showing.


Less than 90 days later he and his family purchased this $600,000 property. What he didn't say was that his uncle was a Realtor who made sure that the family members combined to "easily" qualify to make the purchase and who didn't even take his full commission in order to chop a few thousand off the price.


I'm certainly not saying that because it worked out once it will work all the time. But if the agent had taken the "come back with the loan qualification" approach, that property might not have sold for months and months. That buyer also went on to refer a friend to that agent after the transaction.


When a caller gives you the right answers, then it could be worth your while to have a lender present. That caller would know you are dedicated to selling that property, and the lender you "bring" is sure to refer business your way in the future, even if things don't work out.


Those agents who show up and THEN find out the caller doesn't have a lender are the ones my comments are intended for.


Mar 14, 2012 07:09 AM #178
Tina Willoughby
Equity Resources Inc - Saint Cloud, FL
Mortgage Originator

Loved your post.   I am the scary originator who tells you the facts.  I will work with you for months (if needed) and you may have to wait to clear things first.   I usually get the calls after the person found a home and have submitted the bid.  They want the prequal now and need it within the hour. 

Scenario - Me- Mr borrower, there are issues that need to be resolved prior to me issuing the preapproval on the home you just bid on.  Not a problem, we can take care of them and then you will be able to start looking once you clear these items.  Borrower-I'ld rather not wait, what can you do now.  Me-at this time our hands are tied, issues need to be resolved.  Borrower-okay I'll fix things.  Couple of weeks later a call comes from another Realtor - borrower has found a house, need prequal within the hour.  Me-we still have issues we are working on.  Borrower - won't it be done before the home closes?  Me-could be, however we need to resolve issues BEFORE you bid on a home.  Borrower-well I already bid, do what you can do now.  I don't want to wait.   

Had this scenario more times than I would like to say.  First step to someone considering purchasing a new home is to check your finances and get a preapproval in order.  A true "preapproval" is based on credit, income, verification of deposit, employment and money to close.  A "prequal" is only based on credit and what you tell me during application.  Calling prior to bidding keeps you from having to deal with "surprises" and puts you in a better position to bid.  Realtors and sellers love preapprovals, it will also save delays in the loan process.  Your loan will close extremely quick by you being prepared.

If we are working out issues, I'll ask you to clear things prior to bidding.  The reason I suggest you to wait, is not to keep you from your dream.   It is because based on our first meeting - you will not get approved.    I am a professional and I am working to help you buy that house.   I want to get the best deal for you.   I will give you a detailed checklist of what documents are needed.  Things have changed, doesn't matter that you didn't need to verify things in the past - banks need verification now.  The longer it takes to get things in, the longer the loan will take.    This is one of the biggest purchases you will ever make, be prepared.  Even just calling to find out what kind of documents you will need to have gathered up is a plus.

 A big no,no - do NOT make any purchases or add new credit while we are in the loan process (your new car does effect the loan).  Please also, do NOT spend part of the money you had verified earlier for your down payment.  Banks CAN and will require final verification.  Yes, it does matter that your only a couple thousand short for closing and no you can't just put it on your credit card.  Banks will turn down the loan at the last minute, so please once I give the original preapproval - don't make any changes.  Realtor and sellers don't like it. 

Mar 15, 2012 01:13 AM #179
Mary Borth
Bloomington-Normal, IL

I agree that you all have gotten a bad rap! The handful of really good, reliable lenders I work with is priceless and I am so thankful for them.

Mar 15, 2012 07:17 AM #180
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Dave, I don't just hang up on people when they say they do not know if they're qualified. I never said that! I'd be starving to death right now. I do ask questions. Those questions determine 1. if they're working with an agent already 2. if they've already extablished a mortgage relationship with someone or could I have my lender give them a quick call and 3. do we seem a fit.

If it's my listing, like it seemed to be in your 600k example, sure, I might show it. Especially if, after talking about it for a while, the potential buyer says his family can easity afford it. That's far different from someone saying "I have no idea what my credit score even is."

I see what you're saying, but we still need to make sure we're not knowingly wasting our time. Preferrably by talking to them in the beginning.

Tina, I bet you're not that scary. People need to get quality advice, follow said advice and the transactions will be a lot smoother. I agree! Do Not buy anything until AFTER you close!

Mary, I'm not a loan officer. My rap is pretty sweet.

Mar 15, 2012 08:56 AM #181
Charlie Ragonesi - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

I tell people a loan officer is like a priest. he is going to hear youor financial confessions. He has heard them all before. And like a priest he is going to keep the information confidential

Mar 17, 2012 04:29 AM #182
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Charlie, why didn't you tell me that before? I would've used that as the blog title!

Mar 17, 2012 05:46 AM #183
Andrea Pena
Amcap Mortgage, Ltd. - Spring, TX

Very good blog!!!  HELLOOOO PRE-QUAL!!!!  I don't even know why a home buyer wouldn't want to be pre-qualified-it's like taking your wife on a shopping spree, then having your credit card declined!  Big No No!

Agents should take this advice too though.  Time is money in this industry, if you client isn't pre-approved all it does is waste time and GAS!


Jun 14, 2012 07:34 AM #184
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Andrea, thanks for the comments. If everyone did what they were supposed to do, things would move a lot more smoothly.

Jun 14, 2012 09:39 AM #185
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Eric, Really good advice here in your blog. It will head off a lot of disappointment.

Nov 19, 2012 10:00 AM #186
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Debbie, thanks. Wow, you went way back to find this one!

Nov 23, 2012 05:04 AM #187
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