Get on The Right Team When Buying a Home…
Last month I wrote about staying local with service providers, using companies where you could actually talk to a decision maker. Invariably there will be a hiccup or two, or ten during the home purchase/home sale process and having a team that will look out for your best interests and also make sure the sale happens is paramount in real estate.
Last month there was a large corporate owned settlement company that wouldn’t accommodate moving a settlement later in the day on a Friday, because the settlement agent was going on vacation. No regard for the families involved. The sellers were leaving to move to Hawaii that weekend. The buyers had movers lined up for the weekend. However, we found a small local company, Signature Settlements, who saved the day.
This month, I’m sorry to say, the same theme but different results.
I’d rather write about positive and uplifting experiences, and they do happen in Real Estate. However, I think more people need to be made aware of potential headaches that occur during real estate transactions so that they can make better informed decisions. Buying a home is a stressful and serious process, and I think buyers need to do more research when starting the process to ensure that the team they surround themselves with will know how to navigate the hurdles along the way. Will your buyer agent be proactive in conversations with the lender and Settlement Company in ensuring they have proper documentation? Does the lender require that your tax returns, W-2s, and bank statements be submitted before giving you pre-approval to write an offer? What might seem like a pain initially, will – Trust Me – lead to fewer headaches in the long run.
Just last week we had a settlement that went 17 days longer than it was originally scheduled because the lender didn’t do their homework up front. I’m sorry to say that this happens more often than it should! Typically there might be a day or two delay in settlement, which is painful, but when the delay is nearly 3 weeks, that is unacceptable.
You won’t believe this…
So we were on vacation the last week of June visiting Susan’s parents in South Carolina on our annual summer trip to see them. It was a Wednesday, and we were scheduled to settle on Friday so I just sent out a ‘checking-in’ email, as I hadn’t heard of any possible delays. Just a “Hey, just checking in with everyone to make sure that we are fine for Friday?” I sent this to the lender, Settlement Company, and buyer agent fully expecting to hear that all was good.
What I received from the lender instead was, “I’m sorry, I thought that you knew. We aren’t going to be settling Friday. We are still waiting for bank deposits and verification of employment from the buyer. Best case is middle of next week.” Huh? How does the buyer agent or lender not notify the other party in the transaction?
I immediately call the buyer agent. She claims to know nothing of a possible delay and said that she hasn’t spoken to her client in over 2 weeks.
Imagine that… the largest purchase that you are going to make and the “professional” (I use that term lightly) hasn’t spoken to you in the 2 weeks leading up to your settlement! Is that someone you want on your side, guiding you through one of the most stressful and exciting transactions of your life?
My next call is to the lender…
“Dude, really? I find out 2 days before settlement about a delay and who knows if I would have known if I didn’t email everyone… My seller has already moved out. This HAS to settle Friday.”
I get a stammering loan officer on the other end, explaining that he still needed documentation from the purchaser.
Unacceptable… He had had this file for 56 days by this time. How do you not request this basic documentation earlier? And on top of that how do you not inform every one of the delay before families have moved?
Having been in business for 13 years and worked with hundreds of lenders as a listing agent and a handful for my buyers, I have NEVER seen a timeline that puts settlement TWELVE days after submitting the loan to underwriting to settle!
But you know what? When the lender is in a different state, and his underwriter is in California and his closing department is not local, this is what you get. The buyer probably saved $100 in fees, but is that worth the headache?
Back to the ‘Story.’
So on Monday, I check with the lender again… Oh no, we are not settling on Wednesday, now maybe Friday.
But guess what? Wednesday is the first day of July. And anyone that has owned a home knows what happens on the first of the month. The next mortgage payment is due. And because my seller had an FHA loan on his home, when the payoff of his mortgage is ordered for his sale there is going to be another month of interest that he has to pay on his loan. So not only has my seller moved, he had to pay another mortgage payment. Now his interest payoff is higher, he has to pay another month of HOA dues, and he has to keep insurance, electric, and gas service on at this house.
He is distraught. He is convinced that this buyer will not get the loan, as the lender is not instilling confidence in anyone.
Every other day I’m checking with the lender for updates… (Mind you, this should be the buyer agent’s job, but that is a separate story.) And every other day, there seems to be something else that the lender is requesting from the buyer. Then a week later, the lender says he needs to have the appraiser change the wording on a section in the appraisal.
It is literally one thing after another with this lender.
Two weeks go by and I’m having my doubts if this is going to settle. The buyer and seller have signed 3 settlement extensions by this time. My seller is at his wits end and says he won’t sign another extension.
Miraculously, we FINALLY get the ok from the lender that he has drained the buyer of every last drip of financial blood, requested every possible document, and he has the clear to close the loan.
Settlement happens on July 13th, a full 17 days after settlement was originally scheduled.
Had the lender done his homework upfront and requested the proper documentation from the buyer, this NEVER would have happened.