This topic is thrown around in our industry almost on a daily basis. Bankers and brokers love to walk into your office and claim to close a loan “faster than EVERYONE else… 10 days… promise…” and then 143 days later the appraisal still hasn’t been scheduled.. Why? Three words no one likes in a real estate transaction. No extensions granted. The real estate market is forcing everyone to step their game up in order to survive. I hope to shed some light on the loan process and what separates a good relationship from a great one! Realtor and lender have to create a symbiotic partnership for everyone to get to the table on time.
It is vital that as a realtor, you are prepping your clients as you do your initial needs assessment. One of the most important things to go over with your clients is to not just talk to a bank but to get ALL of the vital information over to them prior to finding a place. The banker should already be explaining this urgency to your client but when you are BOTH relaying the same message, it’s magic. Clients have a lot going on with uprooting their whole life. Sometimes they just need to be reminded! Lenders need to give the entire list of documents needed to the client at initial prequalification. Just having a pay stub and a W2 is not sufficient.
Monday, Day 1- Contract Acceptance
This is where it all starts. Once you have signatures on the contract your loan officer can get to work. What I always say to my referral partners is get me the contract back same day, especially if we need a quick closing. Sometimes this involves driving to go pick things up. We’re closing in 10 days!
Realtor Best Practice: Ask the sellers side who the sellers attorney is. Sometimes it’s not on the contract and your lender needs this right away. What I have found works best is just kicking open the door of communication on Day 1. I call the sellers attorney and make sure title gets ordered right away as we are closing in 10 days!
Lender Best Practice: The very next phone call by the lender needs to be to the sellers elected Title Company. We need the exact fees the buyer is being charged! Some lenders will guess at this. 1. It’s unethical to do this since the client will not know their real charges at closing 2. It will actually stall the loan process. If fees are off, the loan will have to be redisclosed and you have lost vital time.
Special note on Condo’s- Condo docs will always be needed and unless the loan is going to be with a portfolio lender so will a condo questionnaire. These need to be ordered Day 1. The sellers agent should have the docs already, if not, now’s the time to get on it! I have found when the buyer’s agent requests the docs for this from the seller’s agent, it comes back 10 times faster.
Tuesday, Day 2-Package Receipt
Package should have gone out overnight day 1 or an appointment was set to meet and review the terms of their new loan with the lender the next day. This is vital because an appraisal cannot be ordered until you have signed an acknowledgment to do so. The appraisal is the real time killer. This is what holds files back.
Realtor Best Practice- Communication is the key. Especially, if you do not have a relationship with this lender, confirm the package went out. When is the appraisal going to be ordered? (Ask to be informed when its scheduled.)
Lender Best practice- Once you have the signed package, order the appraisal on a rush. You then call the sellers agent and let them know someone is going to be calling them for scheduling. Ask politely if it can be scheduled ASAP as we are closing in 10 days. I always ask them to reach out if they have not heard from an appraiser within 24 hours of that call.
Wednesday, Day 3- Ordering and Follow Up
Lender should have all vitals needed/ordered condo docs, condo questionnaire, insurance, verifications of employment, tax transcripts, credit supplements, SSN verification, flood certs and any fraud guard ordered.
Lender Best Practice- Update your realtor and clients with an email. Let them know we are on track and what the time frames look like. This is vital because if there is something they can help with ie. Appraisal scheduling or condo docs, now’s the time to tell them! Make sure to follow up with the seller’s agent and confirm the appraisal was scheduled if you have not heard from them by midafternoon. Call the AMC and ask they call and schedule while you are on the phone.
Thursday, Day 4- Problem-Solving
Lender, today is the day to tie up loose ends. If you are missing anything, it is time to get on the phone. Tell people you NEED it today as we are closing. By now your appraisal should be scheduled and you should have a time frame for it coming back. If title was ordered Monday, you should have it back by now. Communicate with everyone even if it’s just to say were on track.
Tim Brigham is a seasoned veteran of the mortgage industry with over 12 years experience in residential financing. He has been recognized for being a top producer and his skill with pipeline management. He currently runs the successful Chicago LPO office for Evolve Bank and trust in addition to being one of the highest volume originator’s in the company. An avid perfectionist, he is always eager to teach and help others be the best they can be.