There is NOTHING worse than taking your clients to 20 showings, putting in 10 offers, finally getting one accepted…and then the deal falls through or closing is pushed back. Thankfully, it doesn’t happen often.
While it is absolutely the lender’s job to get the deal done, sometimes people need to hear things more than once. And as Realtors, you have credibility with your clients. You have great power to influence them. Please use that power to help make your buyer into a successful borrower!
- Be transparent on their pre-approval application: lenders ask questions that can feel intrusive. We’re not being nosy; we want to be sure your client’s pre-approval is solid. Nothing worse, for everyone, than surprises when we get to the live loan.
- Avoid new debt, including leases…or even applications: Saving 10% at Home Depot or Victoria’s Secret is not worth the extra hassle that may occur. And adding debts will affect the buyer’s Debt-to-Income (DTI) ratio which is key to approving their mortgage loan. Buy the new furniture AFTER close. And new leases for cars or furniture count!
- Protect their down payment fund: We’re pre-approving your client with their current situation. Any changes, like spending down their down payment, is a potential deal-breaker. Increasing their savings is awesome…and their lender will appreciate it.
- And don’t move the money around: Moving money between accounts will likely cause extra paperwork and headaches, especially between banks/credit unions.
- Don’t “invest” the down payment: I’m working on a transaction in which the buyer moved his money to cryptocurrency so he could grow it. Not a great idea. He lost 20% of his money, on which the pre-approval was based. Luckily, we’re still making it work.
- Stay at their jobs: any change in income/employment is guaranteed to create at least a little scrutiny. Any changes in their financial situation should be run past their lender first.
- Provide documents quickly: Lenders really aren’t trying to make things difficult. If we’re asking for the tax returns, more recent paystubs or a Profit and Loss statement, it’s because we are following ever-changing rules.
- Respond promptly: Much of the communication will be by email so they should check it regularly (at least daily). Remind them to keep in touch with their lender and respond promptly to any request, especially signing the Initial Disclosures and, most importantly, the Closing Disclosure.
All of us – Realtor, client and lender – want a smooth transaction and to get the deal done. Supporting each other makes that happen.
Thanks for your help!