When these lessons thump me over the head, they make an impact. The results are usually a big benefit to my clients, through my lessons of hard knocks I know where NOT to step next time.
Yesterday was a hard knock day. I'm working with a first time buyer relocating to the Denver area from a neighboring state. He's a sweet young man with an excellent job, outstanding credit and money in the bank. To a mortgage banker he is an A+ buyer.
Mr. A+ decided to pick his own mortgage lender. Not following the references of his buyer broker (that's me) but instead walking into his local bank and speaking to the resident mortgage person.
Mistake #1 ~ When dealing with a mortgage broker always get a reference.
Mistake #2 ~ Use local mortgage bankers who are familiar with local laws and standards of practice.
As a Realtor I respect loyalty in my clients and never try to force my will on their decisions. Of course in this case it was not one of loyalty but luck. Luck that is on the part of the mortgage banker. She obtained a client based on nothing more than being in the right place at the right time.
Oh well, I figured what could happen? Mr. A+ was a perfect candidate for a loan. What could go wrong?
Colorado contracts have deadlines for various action items. These dates must be met in a timely manner. If a date is not met on or before the deadline, the buyer could risk losing his earnest money.
Here's the catch. The mortgage broker didn't read the contract. She went on what the laws and practices were in her state. She thought she was doing it right, but she failed to order the appraisal.
I discovered this by accident. After she said her work was done and loan was approved, she mentioned she just was waiting on the appraisal.
The sirens went off in my head. The appraisal is PART of the loan conditions, so if it wasn't done how could the loan be done? DUH!
Luckily for us we discovered it in time.Had we not and the home didn't appraise Mr. A+ may have lost his $4000!
The sad thing is all of this is written in the contract. All she had to do was read it.
In my conversation with her it didn't take long to figure out she had very little experience. So little in fact I bet this was her first rodeo. OUCH!
I harp on out of state lenders all the time. Seldom do they perform like our local lenders who know the ropes and perform like super stars without my supervision.
Today's real estate transaction is more complicated than ever. Things go wrong all the time and we fix them. Knowing what to fix and when is critical. It's nice to be surrounded by capable professionals who work together to make the transaction smooth and seemingly effortless.
My strategy is so simple. When it comes to buying a home follow the voice of experience. Use a mortgage banker you can trust to get the job done and comes recommended by others.
Take advantage of my road rash and avoid having the pain of your own.
(Photo credits to Bill and Jane who know the joys of homeownership and the pain of road rash obtained from one small moment of oops on the road)