Guest column by Cindy King, for The Bend Bulletin Special Projects
Now more than ever it is imperative that borrowers, sellers and Realtors involved in a financed purchase understand the loan process and how the chosen lender will work in delivering a loan on time.
So many twists and turns happen behind the scenes, and if your lender or banker is not on top of your file, you as the buyer may pay a steep price in missing loan locks, missing closing dates and sometimes even being homeless between occupancies. Sellers? Sadly, being fully prepared with your moving van and home packed and then having a two-week extension … well, I just don’t like thinking about it! You may be living with Uncle Joe until your sale actually closes. When I got into the real estate business in the mid-1990s my mentor, Steve Scott, beat me over the head about what lenders do and what they do not do. Many an office meeting broke down the processes involved with financing, ideas of issues to watch out for and questions to ask throughout the loan process in order to have a solution to a problem even before you need it. A lender is essentially a loan arranger. Your loan arranger is gathering and assembling very important data from you. That person is your main point of contact throughout your financing journey. Always be upfront and honest with your lender. Always
From the time you sign your loan application, your lender sends your file to their processor. Generally mortgage loan processing takes place within five to 20 days from the date of application on the mortgage loan. The processor needs to get their work done before it’s submitted to underwriting. Once in underwriting the mortgage underwriter will then verify what you’ve told your loan officer regarding your salary, debts, savings, etc., and review your file as if it has lice. That fine toothed comb is never finer than at this moment in time.
The processors and underwriters carry the responsibility of verifying your data to help approve your loan; yet they also have the responsibility of protecting the lender by ensuring the loan is safe enough to grant. The entire process now takes anywhere from 45-60 days or longer, depending on your financial situation, job status and other factors.
One of these “other factors” could be your appraisal. Your lender is required per the real estate sales contract to order the appraisal within the time specified for your property inspection. If your lender disagrees with that and says it’s OK to wait until the inspection is done, have them call me. Actually they can’t call me unless I’m an agent that is involved, but that answer is incorrect. They need to get the appraisal order in, and they can always cancel it later should a property inspection cause the deal to go south. Appraisals still aren’t as fast as they used to be, and by the lender delaying putting the order in, you could pay the price. It’s just not worth it.
Surprises can come along at any time. One way to help combat last-minute surprises is to continually follow up with your lender about the loan status. Ask lots of questions! If they are not updating you on a weekly or bi-weekly basis, call them. Ask your lender how the loan processor is doing right now? Do they need anything more from you? If your file has been processed and it’s with the underwriter find out where it stands in underwriting! Do not be shy — this is a big deal. If you get “It’s all good ... no problems!” without any specific details, consider your loan in muddy territory.
Listing brokers have full authority to contact a buyer’s lender and ask about non-confidential loan updates, as does the buyer’s agent. If anyone at any time suspects there may be a delay in closing it is imperative to notify all parties and get that extension in writing. With the new lending rules that brokers and bankers must follow, last-minute extensions can cause one- to two-week delays in closing. Sooner is always better than later. By having all of your information at your fingertips (this is hard for my fun-loving clients who consider filing sheer torture) you are assisting your lender tremendously, ultimately helping everyone move on with their lives in a timely manner (no pun intended, but kind of).
Why does it take so long to get a loan these days? Well, why does it keep snowing?!? It is what it is, and we have to deal with it. We can’t change the weather and we can’t change the loan processes; but all parties to the transaction can be proactive and aware by paying attention to the process.
Knowing the right questions to ask when selecting a real estate agent will help ensure a good partnership and a positive home buying or selling experience.
by Cindy King, for The Bend Bulletin Special Projects
My library is full of real estate journals, magazines, market trends and histories, books about human nature and personality traits, as well as some cat books to balance out my world. Real estate involves a wide breadth of skills and knowledge and when you are at the point of hiring a Realtor® you are faced with some important questions, some of which you may not know to ask. What should I look for? What do I need to ask? Who do I ask? How do I know? Whit- ney Houston isn’t here to sing, but I always like to try.
After more than 20 years in the business (and more to come) here are three of my favorite questions for sellers to ask, as well as some bonus questions from yours truly. I include my questions because the interview is for both of us. You are not hiring me to be my boss; I’m not working for you just to have fun and hang out. By going beyond hiring an agent because they offer professional photography as their main asset, these questions will help you navigate and get to the nitty-gritty of the difference between a professional ball player and some- one dabbling in real estate because they need something to do. Welcome to Real Estate 301.
Question #1: “Ms. Agent, are you full- time and how many deals have you success- fully closed?”
The key phrase here is “full-time.” While some very established, highly skilled agents work part-time and have their network
of clients they have worked with over the years, I really believe that in our extreme- ly competitive market you’re best served by hiring a full-time, knowledgeable agent.
Our real estate forms change every year with constant additions and updates. Many outside issues play a role in a property sale on top of the language in the sales contract. Take the government for example. Have you heard about legal marijuana or any spotted frog regulations over the past 12- 24 months? These rulings and regulations affect certain properties, majorly. In Deschutes County there are more and more instances of changes in rulings that can unfortunately affect properties even after a client’s exhaustive due-diligence was done prior to closing.
Question #2: “Mr. Agent, what is your level of understanding of the language of the listing contract, as well as the sales con- tract your broker requires us to use?”
No different than professional football players do when reviewing their skills and data before/during/after the season, you need an agent who is on top of their game as it relates to the contract and what’s involved. Many moving parts are involved during a sale and no transaction is the same. Your agent is your direct coach when it comes to understanding the contract. Don’t be shy in asking to see their documentation. We all keep records of our continuing education and that is one of the many ways to see what our background and history is.
Question #3: (actually it’s #5 by now): “Mrs. Agent, how will you work with me in marketing my home in getting it sold?”
Your agent should be able to establish a clear and fairly concise plan on what you can expect from them. This is their full- scale marketing proposal, and customizing it to your particular property is important. If you have a unique property then hope- fully the marketing plan is unique to your situation. If it’s a photocopy of outlines from 1998, the meeting is over.
Additionally, I had to add this: always ask for referrals. Referrals come from a third party who has no interest in what hap- pens to your sale; however, they do have an interest in sharing with you their positive experiences with their agent. You can learn a lot from a phone call with a referral.
Now, for the two questions I ask:
Question #1: “How many homes have you sold in the past?”
This way I can get a sense of your experience with real estate. If you have never, ever sold a home before and you are thinking you can go it alone with the world- wide-web guidance; I will want to tuck you under my wing and protect you from the sharks out there. If you’ve sold several homes I know how to guide you with some advanced practices and not overwhelm you with data you don’t need.
Question #2: “What else do you want and/or expect out of your agent?”
By asking this question I can find out how involved you really want to be; if you prefer phone calls to emails; if you need extra time to review documentation (engineers love data ahead of time, right?) when showings are most convenient for you, and I also may find out about any past experiences with agents either good or bad and respond accordingly. Do you want weekly local market updates or do you just want to get away from our winters FOREVER?
The interview is a two-way street and by asking important open-ended questions both parties will get a feel of whether the partnership stands a chance. If you relate and sense you trust this person to help you with one of your biggest assets, you are ready to sign on the dotted line and are on your way to a win-win for everyone.