Misconceptions and misunderstandings

Real estate agents and lenders have a common goal – to put buyers in homes. But they sit on different sides of the financing process, and misunderstandings about their respective roles can derail that process.

Regulations established in the wake of the housing market crash have made it harder for people to qualify for loans, slowing the process for the consumer as the bad loans that contributed to the problems are cycled out. Paperwork and incomes have to match, and agents may not always understand what is holding up a transaction.

Managing expectations is crucial on both sides. No matter how competent the lender or the agent, if communication is lacking, the process can fall apart.

“I can move things pretty quickly, but it all comes down to communication,” Vlamis says. “But there is a learning curve. When the Dodd-Frank bill took effect, it blindsided a lot of people. That’s why it’s important to communicate early and let people know what’s expected.”

That disconnect likely comes from misunderstandings on both sides regarding what the other’s job really entails. Outsiders looking in may see only the “high-profile” aspects of an agent’s job, such as open houses and events, missing the less obvious, tactical details of selling homes that agents must master. Rather than acknowledge the hard work agents put into scheduling showings, working with inspectors and getting a home ready to sell, Vlamis further suggests some lenders may think that agents are focused on parties or sponsorships, rather than the nitty-gritty details of closing deals.

“They think that agents rely mostly on referral-based business,” Vlamis says.

David Kasprisin, branch manager at Wintrust Mortgage, claims a lot of issues arise due to regulations and restrictions imposed on the lending industry. Though they were implemented to protect consumers, he says, the regulations have developed into an overly complex and rigid system that requires everything to fit within a defined box. This box is made smaller by some lenders through their underwriting and compliance standards. Touching the side of the box results in getting zapped with significant financial penalties.

“Everyone involved gets extra nervous when you get close to the side of this box that we have all been put in,” Kasprisin says. “Because we are not giant organizations, Wintrust and other correspondent lenders can usually navigate through the box with a little more ease because they are not so big. But you can usually be assured that any last-minute document request is the result of someone thinking we are too close to the side of the box.”

Building trust

Bob Safranski, a broker with @properties in West Town, attributes misunderstandings on the part of agents to a lack of awareness of the loan officer’s role during the transaction process.

“I do not have those issues when I’m working with lenders I know,” Safranski says. “However, when lenders and agents do not know each other, I think there can be a lack of professional trust.”

Safranski believes it helps to work with vetted, trusted professionals — people he has worked with before and can vouch for. Insight into how the other side works helps to break down barriers that might otherwise arise and smoothes the process for all parties involved.

He also likes to get personally involved in the loan process, noting that many agents do not understand how loans get priced.

“I help the agents vet the lender,” he says. “I help them ask the right questions, and I’m in communication with the lender.”

Safranski often works with Jeff Slater, executive vice president and senior vice president of mortgage lending at 1st Advantage Mortgage. Slater believes in building a trusting business relationship through constant communication from start to finish, keeping everyone involved and informed throughout the financing process. When he starts working with an agent, he sends out an email and a packet that clearly describe the whole process, so that everyone entering into the transaction is on the same page.

“I approach the entire process as a full-teamwork effort,” Slater says, emphasizing that 1st Advantage Mortgage prefers to do repeat-work with agents again and again.