Why do Realtors Prefer Local Lenders?
September 25th , 2014
It may seem like a flash of the blindingly obvious, but for loan originators who focus on building purchase business in their local markets, INSIDE MORTGAGE FINANCE recently commissioned a national survey of real estate agents, and found that Realtors express a clear preference for local lenders over call centers.
What Are Some of the Reasons Realtors Prefer Local Lenders?
Fewer Delayed Closings.
According to the survey, delayed closings are much more common when the buyer is not using a lender with a local office. Realtors get very nervous when it begins to look like the closing may be delayed because the lender has not obtained a final approval from underwriting. While that might also occur occasionally with the local lender, turn time to get you to closing is much faster – same day even!
When a home sale occurs, there is a lot on the line for the seller, buyer and agent. I’ve never heard anyone in the transaction say they like surprises, and they especially don't like having to deal with a contact person in a faraway city that doesn't rely on the Realtor for their business and is in no way beholden to the Realtor for the current transaction. It is almost impossible for a Realtor in this situation to get a straight answer from anyone in authority at the out-of-town mortgage center. And if there is a problem at the closing table after office hours, there is no one the Realtor can call to get the problem resolved. A local lender will get up from the dinner table to take their call!
Experience with Local Lending Laws and preferences.
You know your state's laws as they apply to mortgage lending. According to the Realtors who were surveyed, call center companies that loan in all 50 states make more mistakes that can lead to delays or worse. How can they be proficient at what the local title company requires or who to call if there is a quick decision to be made? The Inside Mortgage Finance survey (conducted by Campbell Research) was apparently focused only on call center lenders, but many of the complaints voiced by Realtors about the call centers also apply to the nationwide megabanks. In this day of heavy regula-tion, a Realtor may be hesitant to say anything negative about a big box lender to a buyer. They don't want to appear to be trying to influence the client as to their choice of lender, and ultimately they're afraid of losing the client altogether. In many cases, the Buyer has already gotten "preapproved" online by the call center or the big bank before they even approach a Realtor. From the Realtor's point of view, it's hard to un-ring that bell. But, having a great lender relationship with a local company, might also impress the borrow-er when the deal is saved! We do this all the time and when it comes down to it, its service over rate every time. That internet lender just can’t compete with a face to face meeting and a handshake at closing!
Keeping it local – Beach Community Mortgage!
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By Pam Woodall