Bad Loan Officer Kills ANOTHER Deal

On the standard residential real estate sale side of life there are two things that will kill a deal. One is a bad property inspector. Hear me out, every home is flawed to some degree. I have absolute respect for the home inspector who does the job well and leaves no crack un-documented.

What I do not have tolerance for is the home inspector who tells their client (be it buyer or seller) that every documented item on the list, no matter the severity of the issue, must be addressed in order for the property to be fit for sale. But, this is an issue I will expound upon at a later date. Today, let me share my thoughts on the second deal killer.

To err is human. What was omitted from that great saying was that those with the highest propensity to err are mortgage brokers.

I really don't know where to begin this rant. I realize that mortgage brokers get paid according to their production volume. What I don't understand is, if they cannot get a deal to close, how they get paid at all? And, why is it that there are so many of them? Most importantly, why are so many buyers suckered into working with these mortgage brokers that have a very public track record of closing no better than 1 in 10 deals that they have "pre-approval letters" for?

I have full confidence that if a mortgage broker tells me that "we can get this deal closed in 2-weeks" my poor listing client has no chance at all that this buyer will be able to qualify for a loan. It has to be some kind of secret code phrase for bad lenders. Every time, without fail, when I have heard these words uttered to me by a mortgage broker one day before our scheduled closing (here comes another secret code phrase) "the underwriter is having trouble with the appraisal". Never mind that the property has been intentionally undervalued with the intention of attaining a "quick" sale.

The real question, though, is why do I allow my sellers to go through this heart ache? I am honest with my clients. I let them know that when a buyer puts an offer on their home for 110% of list price and my sellers still manage to only see a net offer of 82% that something might be a little off and that this loan package might not come together. (Even though I have been told by the mortgage broker, "Close in 30 days? Hah! We'll get this deal closed by the end of next week.)

But, my poor sellers see a contract offer and with it a light at the end of the tunnel. It's so hard for them to turn away even the slimmest of chances. That is until the day of closing and we are sitting at the title company wondering why the lender hasn't arrived yet. And, by the way, didn't they say the loan figures were coming over the fax...3 hours ago? Hey, why am I getting a "this number has been disconnected" message when I call your mortgage brokers mobile number?