Published by Kartik Subramaniam
As a real estate professional, it’s hard to overstate the importance of having a competent loan officer on your team. Since most real estate purchases involve financing, the person quarterbacking the buyer’s loan can make or break the purchase of the property - and ultimately affect whether or not you get your commission.
Remember - real estate agents don’t get paid for opening escrows, the only thing that matters is closing them.
As a student in our real estate license course, assembling a great team consisting of a reliable escrow officer, title representative and a mortgage professional might seem completely disconnected from your pre license studies or real estate crash course but it’s an important thing to consider nonetheless. This way, once you do obtain your real estate license you can hit the ground running.
So who do you choose as your go-to lender? I made a quick list of some of the things you’ll want to consider for as you choose a lender for your team:
In short, if a lender is going to write up a pre-approval letter for your buyer it’s important to be sure that the transaction is actually going to close. While there are no absolute guarantees, you and your buyer should at least have some confidence that the transaction is actually going to happen with no foreseeable problems regarding the loan.
Lots of lenders today will issue a “DU” approval as well. “DU” stands for
Desktop Underwriter with Fannie Mae Desktop Underwriter is an automated system for mortgage underwriting that determines if a loan meets approval requirements. Lots of listing agents will also want to see an “approved eligible” printout from DU to ensure that the buyer is well qualified.
As a real estate agent you need to have trust in your lender that their pre-approval letter carries weight. At the end of the day, if that pre-approval letter doesn’t translate into an actual funding it will leave the real estate agent and the buyer with a big problem on their hands as the buyer may end up losing their deposit and the real estate agent won’t get paid.
In the end a pre-approval that doesn’t blow up in your face is a bare minimum you should expect from a lender.
There’s nothing worse than a closing that is continuously delayed. It puts the buyer and the seller in precarious positions, forcing them to rearrange schedules, potentially delaying start dates at jobs, and generally giving all parties in the deal heartburn.
To be clear, on occasion there will be delays that are beyond the lender’s control. Perhaps the buyer’s employer is lagging on delivering a Verification of Employment. Maybe the IRS has delays related to a tax transcript. But either way, a lender that has the ability to foresee potential problems related to the loan early on and takes action based on these possible roadblocks is worth their weight in gold.
While it’s unfair to expect a lender to be an expert in all loan types, a lender should have the ability to do more than a home loan for a borrower with a 800 FICO score and twenty percent down.
It’s not unreasonable to expect a good lender to have a wide variety of loan offerings -- conventional loans, programs for first time home buyers, FHA loans, VA loans and more. A lender that has these basic arrows in their quiver will allow the Realtor to get more comfortable with the lender and solidify them as the go-to for new clients.
Most loans have some hair on them. Maybe a borrower has a gap in their employment history. Perhaps there is one 30 day late payment showing up on the credit report from 18 months ago that is bringing down their credit score. Either way, most real estate loans aren’t perfect and they require some level of critical thinking in order to close them on time and with minimal hassle.
Finding a loan originator that knows how to deal with small -and sometimes large - problems is helpful.
Excellent customer service makes dealing with a lender less stressful. What defines good customer service? In the lending and real estate world, this means answering your phone and responding to email, communicating often and keeping tabs on the cadence of the loan. Whether the agent or borrower needs the answer to a simple question or requires serious assistance with a major issue, the lender should have customer service resources available. If the lender isn’t immediately available, the lender should make it clear who should be contacted in their absence.
Above all else, borrowers today value integrity and transparency. Lenders who change terms at the last minute or mislead homebuyers are not to be trusted. Most real estate agents seek out lenders with proven histories of doing right by clients and respecting the financial burdens of those about to make the biggest purchases of their lives.
When a real estate agent recommends a lender to a buyer they are, in essence, vouching for them and there can be reputational risks to the agent if the lender doesn’t perform. Pairing motivated buyers with reliable lenders is an important job of a buyer’s agent. The right partnership will result in a smooth transaction that becomes a win for all parties.
Are you ready to get your real estate license?