Use a local lender!!

It’s bad enough that agents have to battle the constant friction we receive from the media to “justify our fees” but there are bigger problems in the Northern Illinois market that agents here deal with on a constant basis……Out of area lenders!  

Now before you fly off your handle and start warming up your fingers to tell me how great of a lender you are, please let me elaborate.  Yes, there are several out of area lenders that are not only reputable but reliable however, everyone in the business knows that a miracle piece of paper that says pre-approval is worth about as much as the paper it’s printed on.  I’ve seen more and more buyers that come in with a letter from Joe’s Mortgage, which is over 600 miles away from me, saying everything is good as gold only to see everything fall apart after a couple extensions were already granted.  And what good is earnest money when the buyer receives their check back 99% of the time anyway because they couldn’t reach the “mortgage contingency”??  That irritates the hell out of me but that’s a whole different rant.  

This has prompted me to start requiring buyers that are making offers on my clients properties to get a “pre-approval” from one of our local lenders.  Granted, they don’t have to use our local lender but at least this will give me a clearer picture as to how qualified this buyer is, which only benefits my client even more.  My local lenders are people that I have lunch with, people that I see at the grocery store, people that I trust.  And heck, if this buyer decides to use my local lenders loan package, they SHOW UP AT THE CLOSING!  

This exact issue was a topic at a recent general membership meeting though my board.  It was an obvious hot topic because the crowd was double in size compared to the regular monthly meetings and I know they weren’t there for the coffee cake.  Our board is actually considering putting in a clause right into the contract that stipulates a pre-approval from a local lender.  Now this was a GREAT discussion!  We had people debating on both sides with passion!!!  ”I’m not going to offend my potential buyer with this crap”…….”Your not doing any justice for your seller by NOT doing it”….. “This is borderline steering!!” …… “This is doing our job as agents!” Oh…it was priceless.  I wish I had a video camera.