I was inspired by a recent post asking if buyer's agents get offended offended if a listing agent calls the buyer's lender to verify information contained in the pre-approval. Personally I think this should be a standard practice for a listing agent.
As we all know, not all lenders are created alike. Some go through great lengths to pre-approve or pre-qualify our buyers. Then there are the others that simply take some information over the phone and issue a letter hoping for the best.
I'm reminded of a transaction a few years ago that the lender issued a pre-approval letter for a property, the contract was written, deposit monies changed hands and the transaction was well on it's way to closing. A few days later the lender called and told us it was never going to happen. Of course we inquired as to why it was never going to happen and the lender replied, "I just pulled her credit and there's no way!" The lender had not even pulled her credit, only taken the potential buyer's word for it.
As a practice, now when receiving an offer contingent on financing I clal the buyer's lender to ask a few questions:
- Did you pull the buyer's credit?
- What type of loan is this?
- Have you verified income with tax returns and W-2s?
- Do you see any potential issues with this closing?
So far this has greatly improved the chances of closing and helped eliminate any issues with mortgages before they even get started.
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