Why Your Realtor Recommends Certain Mortgage Lenders (And Not Others)
If you are working with a Realtor to buy a home in Tallahassee, then it's likely that she has recommended you work with a certain lender or two.
Equally important, she's probably warned you not to work with a certain type of lender too. Do you want to know why?
First of all, seventy percent of people who will buy a home in Tallahassee this year will borrow the majority of the money they need for the purchase. Unfortunately, most will not consider choosing the lender to be a big deal, and they will treat the loan as an after-thought after they have begun looking at homes.
Because of this, they will be targeted by online lenders who are selling an "easy" process. The promise that you just do an application online and get approved. They say it's the modern way, no need to deal with people, just point, click, and get a bag of money.
Does it work?
Sometimes.
But have you considered your liability when it fails?
What happens when they ask for more paperwork from you at the 11th hour? What happens when they change the loan program on you after getting the application fee from you?
You see, real estate closings often involve hiccups, changes, modifications ... flexibility.
This online mortgage provider will make promises to you, and you will make promises to the home seller (via the real estate contract), so when the former lets you down, you in turn let down the latter.
The home seller can come after you for failing to perform under the terms of the contract, but what can you really do to the online lender? They won't have an iron-clad contract with you to lend you money on a certain date, even though you will have such a document with the home seller.
The bottom line is this ... when there is nobody specifically that you can hold accountable for screwing you over, you are in prime position for the worst to happen.
Why Your Local Realtor Recommendation Matters
Here is something to consider when you are choosing a mortgage lender.
If the lender takes great care of you, they have a happy customer. If the lender lets you down, they have an unhappy customer.
If you are happy, maybe you'll get your next mortgage from them (in what, 15 years?). And if you are unhappy, then you'll not use them for your next mortgage (again ... 15 years from now?). The mortgage business can be a churn and burn business because the sales cycle is so long.
But now consider this.
If your lender was recommended by a real estate company that closes multiple loans per month with that lender, the lender cannot afford to make the Realtor unhappy.
A lender who performs poorly for one of my homebuyers will not get a chance to work with others. So whereas the sales cycle for the homebuyer might be 15 years, the sales cycle for a real estate company is a matter of days.
A local lender cannot afford to screw up on a loan where they have a local Realtor relationship.
You want your lender to care about you as a customer, but the reality is that you really want them to care about how the real estate company views their performance.
Beware Of Online Lenders With No Ties To Tallahassee
Some online mortgage companies spend millions of dollars to capture business all over the world.
If they capture you, they'll likely get you with the promise of an easier process or lower interest rates. They'll claim that having no local office allows them to have lower costs that they can pass on to you. It will sound very tempting.
In all fairness, this might be the way of the future.
But it is not the way of the present.
I'm seeing buyers have to scramble when an online lender drops the ball in the 11th hour, and it is not pretty. It makes for a miserable, high stress process, and that is just not the way it needs to be.
Not sure where to start with the pre-qualification process?
Simply tell us who you are and a trusted local mortgage lender will be in touch to answer all of your questions.
Remember, having no local presence means no local accountability. Ask me who I recommend and I'll tell you. And you'll tell them that I sent you to them. That is foundation of accountability, and it will ensure that you are treated like a king.
Discussion
The problem I have with this post is you are assuming that ALL online lender's are the same. If you are referring specifically to the "big box" lenders and I think we all know who I am Quickeningly referring to here, then you are right. But as a lender based in Kansas City, MO who also so happens to lends in FL, you couldn't be MORE wrong about me as an "online lender". I actually have just as much at stake as a local lender. I want YOUR business as a Realtor Joe. I want to impress you so very much that you can't help but think about recommending me in the future. So when I get a client looking to buy a home in Tallahassee and if you were their Real Estate Agent you are about to get the white glove treatment. I'm HEAVILY invested in you locally Joe. I want to impress you. I want you to say "Holy Smokes... that was an easy process! We closed a week early with lower closing costs and a lower interest rate than my local lender could get!" It is my experience that sometimes (sometimes, not always) a local lender can grow lazy. They can grow complacent with a lack of competition. And please know that I don't earn a PENNY unless I get my clients to the closing table. So I am VERY heavily invested in the success of my purchases closing. No closing, no paycheck for me. And I have a wife, 3 awesome little boys, 2 dogs, 2 cars, a house... etc... it matters to me that I get someone closed, and closed on time.
Just know that as an "online lender"... I'm also a "local lender". I have local clients and referral partners just like you do in Tallahassee. What is important for your client is to do THEIR research.
Thanks! Keep up the blogging... just don't generalize us all. :-)
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