Be A Better Agent

HOW TO GUIDE YOUR CLIENT WHEN CHOOSING A LENDER

Posted on 06/04/2021 by Jamie Nevers

Most buyers think of the lending aspect of a real estate transaction as a necessary evil. The truth is, they’re not wrong. The other perspective, however, is that a loan is a financial tool that 50% of the transaction relies upon. It is incredibly important that your client choose a lender that is going to facilitate your greatest ability to negotiate on their behalf and protect them through the process, all the way up to the moment of closing. It is our experience that clients should make a value decision on the lender they are going to work with, not one based on lowest cost or familiarity. 

1. BOTH YOU & YOUR BUYER ARE THE LENDER’S “CLIENTS”

Lenders that we refer our clients to actually have 2 clients in the transaction. As the referring agent, we actually have a lot more at stake than just the buyer’s loan. We refer business to them and they have committed to be a partner of ours. They continue to deliver an incredible experience to our clients and we continue to refer business to them. We represent a sizable amount per year to a loan officer and all we ask in return is for our buyer to be blown away by their service. 

2. AVAILABILITY AND COMMUNICATION

A great lender will be available on evenings and weekends to make a phone call to the listing agent when we are submitting an offer. That strengthens the buyer’s offer and impresses the listing agent to encourage the seller to take their offer because of the strength of the lender. The lender should communicate the process, their systems and their commitment to communication and service.

3. PRE-APPROVAL

A great lender will provide your buyer with an actual approval on their loan prior to going under contract on a home. This profoundly strengthens their offer and puts them in a position to negotiate on price because of the additional strength of them as a buyer. 

4. QUICK AND EARLY APPROVAL

A great lender will get your  buyer’s loan approved quickly, not putting earnest money at risk. A bad lender will take their loan application and all of their documentation and will oftentimes not actually start working on the loan until only a couple weeks before closing. Your buyer has already spent money on inspections and appraisals, dates and deadlines are quickly approaching and they are minimized in their ability to negotiate potentially other important terms if their position is weakened by poor lending. 

5. FUNDING

A great lender will close and fund their own loans. We want to be working with someone who is directly responsible for ensuring the money is at the closing table at the time of closing. A buyer in the state of Colorado is in default if they show up at closing and the money has not arrived. That is the lender’s responsibility and a lot of lenders don’t know or don’t care. 

6. KNOWLEDGE

 A great lender understands the Colorado real estate contract, the importance of the dates and deadlines, and owns responsibility for ensuring expeditious ordering, receipt and review of appraisals and other documentation in a timely manner to ensure your buyer’s continued compliance with the terms  agreed  upon in the contract. Most lenders could care less and only think their job is to get them to the closing table regardless of the manner in which they do so. 

7. EDUCATION OF OPTIONS

A great lender is going to explain all the financing options and the return on investment analysis associated with those options, not only of loan types, but closing costs options, interest rate options and term options. All of these are important because a loan on real estate is a financial tool to help build wealth consistent with personal goals and objectives. 

8. EXPERIENCE

Your buyer chose to work with you because you are exceptional at what you do through your understanding of their needs, the defining of a roadmap, how well you work together, the ways you’re going to educate them and negotiate on their behalf, and how you hold their interests first and manage the transactions with your team in such a way that they don’t have to worry. We want them to choose a lender for the same reasons, not for a .125% interest rate, or $500 in closing costs. We can’t control the quality of their experience if we don’t have influence on the lender with which they work.

Advising a client when choosing a lender is one of many challenging conversations that we are faced with as real estate agents, but hopefully this guide can provide you with the framework for having a conversation with your client that leaves them feeling confident that you have the knowledge and expertise to do so, and that you have their best interests in mind. For more  on how to help guide your client or for more information on joining the CHR team, contact us today!