4. Final approval means the loan file has been cleared to
close.
If the client has a letter, the Realtor® still might want to
suggest they get a second opinion. Why? If a Realtor® works
with a loan officer regularly and can trust their work, there
is more assurance that the loan can close. Why spend time
and money driving a client around who isn’t ready to make a
purchase?
A second opinion from a local lender assures more success
because of the importance of local knowledge. A loan
officer in another part of the country is not likely to know the
differences between insurance for a home built in 1970 and
one built in 2004, or be aware of Chinese drywall within certain
years, or the difference in price between direct access or fresh
water canals, or Florida laws regarding a spouse’s signature
on the mortgage. The list of potential pitfalls without the local
knowledge goes on and on. Even if buyers insist that their
local big bank “knows” them, a call to a local lender takes
little time and may enlighten the buyers about where they
might receive the best answers and service.
Once the purchase agreement is signed and the loan process
has started, the buyer’s agent can expect to receive regular
updates about the process. The loan officer should provide a
timetable of the loan approval process such as when does the
loan go into processing and underwriting when the appraisal
is ordered. For the purchase of a condominium, find out what
documents the lender requires to review the condominium
association and when it will be reviewed. Because of TRID
requirements, the final approval will need to be completed
within three business days of the closing date.
The Realtor® sets the expectations of the buyer by reviewing
the purchase contract. Any glitches with the loan approval
process can be averted by a properly completed purchase
contract. As the Realtor® prepares the contract, be sure the
names match the buyers’ legal identification because the
purchase agreement, title work, and loan documents must
match exactly at closing. There is a difference between Rick
Jones, Richard Jones, Richard R. Jones, and Richard R. Jones,
Jr., for example. These could be four different people.
Various deadlines are spelled out in terms of days from the
execution of the contract. Escrow deposits are made to the
title agent shown on page one. The closing date is stated on
the bottom of page one of the purchase contract. As a loan
officer, I am amazed at the number of questions I receive from
buyers, such as where to send the escrow check and what is
the closing date. Realtors® who enter a closing date on a
purchase contract with the expectation of moving it up later
are doing a disservice to all the parties involved. The title
agent and the lender work toward that date. Homeowners
insurance is bound for the date of closing. So many people
need to coordinate their efforts toward that date on the
bottom of page one. In Southwest Florida, some buyers
may not be here for closing. Will this transaction be a “mail
away?” If so, the efforts to complete the closing documents
must be moved up by two business days.
The biggest way the Realtor® can assure success of a financed
purchase transaction is by learning how the appraiser must
set their values. Since the Realtors® negotiate the purchase
price, they are the ones looking at the comparable recent
sales. Be ready to justify the choices. Look up the subject
property on the county appraiser’s site (Leepa.org). Is the
property shown in the records as a condominium or single
family home? It isn’t obvious just by its appearance. Was a
permit pulled on any remodeling? If not, the appraiser must
compare the home to the recorded description of the home.
Is the home unusual for the neighborhood? Expand outward
from the neighborhood in the same ways the appraiser is
required to. Look at recent sales going back three months,
not six or nine. Bring your comparables to the appraiser’s
inspection and ask, not demand, the appraiser if he/she
would like to see what was used to establish the purchase
price. Then, have a strategy in mind for an appeal, or how to
renegotiate the price, if the appraisal comes in low.
Remember, lenders want to help the buyers successfully close
on their dream home. Most loan officers are compensated
by full commission just like a Realtor®. Lenders are not the
enemy. They must answer to their investors, the people who
are depositors in their bank, or who own a piece of their
retirement account in mortgage-backed securities. First and
foremost, each loan officer must write good loans or they
won’t last long in the business. Not all lenders have the same
guidelines and processes. As a Realtor®, you don’t need
to understand the whole mortgage process – just develop
working relationships with a few good lenders. That is how
you successfully navigate a smooth financed purchase
transaction.
RPCRA.ORG | NOV/DEC 2017
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