Want to know what really causes most nightmares and drama in a real estate deal these days? Sure, negotiating a contract can be rough. Getting past the inspection can be a chore too…..but both parties usually seem to work through it or part ways. What REALLY gets people worked up is when you can’t close on time, and that is usually due to the loan officer.
I had a closing yesterday. All the parties were told we were closing at the end of last week, then the following Monday, then Wednesday, then finally, it happened Thursday. The buyer had packed everything up and moved out of their apartment. They had to pay to store their possessions. They also couldn’t register their kids in Fayette County Public Schools until they had an address here. Their kids didn’t go to school this week. My clients, the sellers, moved out of their house a week early. I was even a little freaked since I didn’t know if something was wrong and they were just trying to buy time. To make matters worse, the seller agreed to pay $3500 in the buyer’s closing costs, but the loan officer only used about $2900 of it. My clients were happy though since the remaining money ended up in their pocket.
Now, I know most loan officers are caught in the middle. They have to collect all the docs and info from the buyer and then present it in a way that looks pretty to the underwriters. They often don’t have any real control over how long it takes the buyer to get them the docs any more than they have control over when an underwriter will get around to dealing with it. But what they should be able to do is see a problem coming, have a back up plan, get an idea of how long it will take, and solve the problem.
Some of them are a bad combination of greedy and lazy. I recently had a doctor client who was getting a special physician’s loan from an out-of-state company. We were having the seller pay the closing costs. I called the loan officer, who told me to ask for 3% of the loan amount. I kind of made her mad because I told her that wasn’t gonna fly with me. She needed to sit down and calculate exactly what it was going to be…..especially since I knew the closing costs and pre-paid items would NOT have exceeded the almost $15k that the 3% would have been. See, if we asked for 3%, she would have used it all. She also didn’t want to give my client a Good Faith Estimate (GFE) until we agreed to that percentage since they now aren’t allowed to make big changes from the estimate. Had we rolled with her plan, she would have had a big budget to work with. She either would have built all that money into her fees or any excess would have ended up in the seller’s pocket. I forgot the exact amount, but she ended up “Waiving” her origination fee….think it was $5-6k that my client saved.
I know a lot of people think the only difference between loan officers is what they charge. Not true. Sometimes the main difference is between one that gets the job done on time and with no drama versus one that pretty much ruins your life for several days right at the exact time you don’t want to deal with one more problem.
Not trying to turn my blog into a commercial here, but I always ask my clients to entertain the idea of talking to a loan officer who has impressed me a lot. Sometimes they do. Sometimes they don’t. Dude’s name is Kris Vanzant with Stockton Mortgage. I met him a couple years ago when my old loan officer got out of the biz. I gave him a shot and now after 20+ loans, I still think he is the best in town. I used him myself when I refi’d my house. I didn’t ask for any special deal nor did he offer me one. I can’t be having people think I recommend him because I get something in return. All I usually get is the same box of chocolate that he probably gives every other realtor at Christmas time. He really knows how to solve problems and stick to a timeline. On a few occasions, he’s done some complicated deals for my clients. He always seems to have multiple back up plans and can quote lending guide lines that I bet most other Loan Officers don’t even know exist. His brother, Jeff Vanzant, owns Clear Title and has done several closings for me. Jeff first got on my radar when I started to notice that he would always have the settlement statement correct and ready for review before the closing. Most of the time, you either get it early and it is wrong, or you walk into the closing with nobody knowing what they owe, how much they are getting, if the termite inspection or home warranty actually made it onto the thing, etc. A good closing is one where there are no errors to correct and no issues to resolve. For Pete’s sake, all you’re really there to do is sign your name and either walk out with a check or keys to a house. Now, I have to disclose that I have become friends with these guys. That just happens when you work together so much.
So, my advice is to use a loan officer you know something about. Ask your realtor, ask friends…..just don’t go with somebody you know nothing about, even if they entice you with a looooow price. Remember the buyer for yesterday’s closing? She lost about $600 in the closing cost fiasco, paid to store her stuff and lost vacation time from taking off work for all the days we didn’t close. If you’re friends with her, I can tell ya, she isn’t going to recommend that person to anybody.