A few weeks ago, we had something wonderful happen…. One of our listings went under agreement for full price AND we found the buyer! The buyers are first-timers and needed to go for 100% financing and some seller contribution. We knew this up front, so they offered over asking in order to make sure that the seller still netted full price. This was all well and good. The home inspection came back pretty good with only a minor issue that was quickly resolved.
I know what you’re thinking… WOW… This sounds too good to be true! Well, you’re right! As with any good real estate story, there’s a twist!
As always, we tried to explain to the buyers that they should use one of our trusted lenders. Unfortunately, they had a “friend” who happened to be a mortgage broker and were intent on using this company. They company is out of state and we had never heard of them, but okay… ultimately the choice is the buyers to make.
So, as always, we put a call into the lender and proceed as usual:
- Give them our names and contact information
- Fax them a copy of the P&S Agreement and a copy of the MLS sheet
- Inform them that the buyers have signed a release (via the P&S) allowing them to talk to us on the buyers loan.
- Ask them who the title company or closing attorney will be
- Give them the important dates of the P&S (loan commitment date & closing date)
Well, every time we tried to call the company, we got their voice mail. It was as though nobody was every actually in their office. I started to become suspicious, so I did a little checking around on line to see if I could find another number to reach them. I found a couple numbers, but one had been disconnected. Luckily, the other went to a lady who worked in their office. She wondered how I had found her cell number. Well, it was listed on the state banking web-site.
Okay, so we start talking and I find out that they generally use a particular attorney for their closings. This attorney is located out of state. I ask her if they would have any objection to using a local title company instead. She tells me that it would depend on their fee schedule. Okay, fair enough. So, I fax her the fee schedule and contact information for our preferred title company and await her reply. I wait……
And I wait….
And I wait….
I call back several times to check on the status of the loan. I tell her I don’t even care about who closes the loan, but that I would like to know how things are going with the loan. Did the appraisal come in all right? Will they be able to meet the commitment date? Will they be able to meet the closing date? Of course all these questions were left on voice mail because no one ever answered the phone, EVER!
So, a few weeks go by and we get notice that the loan was sent to an attorney’s office in Massachusetts, so we get all the information together that they will need in order to get the pay offs, etc. I ask the attorney’s office if they can email me a preliminary HUD (settlement statement) showing their fees. They do this and I find that they charge the buyer $650. This is $150 more than the company that we offered. So, obviously the lender didn’t care how much the buyer had to pay, they just wanted to use their preferred closing agent. Okay, fine. We’ll make the buyer aware of this, but we have bigger fish to fry in that we need to know what the heck is going on with the loan! We have a commitment that is coming due and a closing that is supposed to happen!
We keep telling the buyers that we are not able to get in touch with the lender, but they tell us that the lender is in contact with them, so we figure that they have CHOSEN to keep us in the dark. I even wrote a post about this a local group to see if we were alone in this problem. This isn’t the only lender recently keeping tight-lipped.Well, unfortunately (but not unexpectedly) the lender turned these folks down. They never told us, but told the buyers. Of course, we needed a denial letter and were having one heck of a time getting it. I finally left an irate message at the office and on this one lady’s cell phone stating that we must have the denial letter immediately and that if they were afraid to call me to just fax the dang thing to me. I had it in about 30 minutes!
Okay, so that’s the BAD news. Are you ready for the GOOD news?
The buyers are completely distraught and are now willing to do ANYTHING to get this house. We put a call into our trusty Coldwell Banker Mortgage Advisor and see if he can save the day. He says that he can probably get them done in about a week so that we can still close the same day! I’m sure that you’re thinking… TO GOOD TO BE TRUE! Well, I understand that thinking, but know from experience that this guy is good to his word.
That was last Friday. We are closing today with our preferred title company . We got the loan commitment (including appraisal) this past Wednesday! Everyone’s happy!
We have another one that we are trying to move to our trusty Coldwell Banker Mortgage Advisor right now, but the buyer (through another agency) still seems to be putting trust in his friend, so I’m not sure how that one will turn out.
I told Mike that if he could pull this off… “I’m tellin’ everyone!” – So, that’s what I’m doing!
The moral of this story?
Buyers: Don’t put all your trust in a lender just because your friend works there. Trust your REALTOR to protect your best interest. If you’re unsure, ask for a referral. I’m sure your REALTOR has many past clients that would be happy to vouch for the referral you are receiving.
REALTORS: Don’t be afraid to push your preferred lenders, title companies, inspectors, etc. If you have a Dream Team working hard on your transaction, maybe your next transaction won’t be a Nightmare!
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