It’s not unreasonable for any one of us to have certain expectations of licensed professionals. Most often our expectations are based on something we have heard from someone or an advertisement we have seen but did not contain all the facts. We come to expect a certain standard when requesting a specific service, but more often than not, these expectations are not met.
Often times we walk in to a doctor’s office for our 10:15 am appointment only to find ourselves still sitting in a waiting room at 11:35 but yet when we finally get a chance to see the doctor he/she only has ten minutes to spend with us as that was the allotted scheduled time for one issue we called about. If you want to talk about another problem you have, then you have to schedule another appointment which could be six weeks out. Most doctors have hundreds of patients and some outstanding doctors may have over a thousand.
The average Realtor is lucky to have one buyer per month, good realtors consistently have two to three and outstanding realtors most often have more than three a month. A realtor who handles more transactions per month is more aware and is more in-tune with all the changes in the real estate industry than a realtor handling four to six transactions per year.
The same is similar of the loan originator. A good loan originator will have 4 to 6 loans per month while an outstanding loan originator will have over ten. If we take a look at lenders, most good lenders run through 1-300 hundred loans a month while some of the larger lenders run over a thousand of loans per month.
If we start looking at a mortgage loan and the number of conditions a good loan has when the approval is released from the underwriter, you should be looking at 10 to 20 conditions. Some tougher loans commonly see 30 to 50 conditions in order to get it to the closing table.
Now if you’re still following along, lenders only have so many underwriters and most often they hire based on their average monthly production. Reviewing conditions is not a matter of “OK, I have it, we’re good” it is more a matter of proving what they have is accurate and authentic. A file with 50 conditions could tie up an underwriter for a couple of hours. Now throw a few hundred files in front of ten to fifteen underwriters at just one lender and let’s think about how quickly you are going to work on getting your requested paperwork in to your loan originator.
So let’s hop on back to the Realtor who may only work with one buyer a month. They may not be in tune to current market conditions and the fast changing rules and regulations in the mortgage industry. Never mind have a real clue as to the entire process. The first mistake they make is not properly pre-qualifying you, the buyer, or helping you prepare for the whole process. They write your offer (purchase and sales agreement) with a closing time that may have been reasonable four years ago but is no longer realistic today. Chances are they do not understand the difference between a pre-qualification, pre-approval, approval with conditions and a loan commitment.
The commitment date in the purchase and sales agreement is when the buyers finance contingency is at its end and the buyer’s earnest deposit money is now at risk if the lender does not fund (close) on the loan. These realtors who set the commitment dates in the contract greater than 7 to 10 days prior to closing do not understand the mortgage loan process and how this works. A lender under the ability to repay rule has certain requirements which they must meet but cannot do these things greater than 10 days prior to closing. So how can a true loan commitment be written?
When a realtor writes these dates in the purchase and sales agreement they set expectations that cannot be met for both buyer and seller. When inexperienced or non-productive realtors who are starving for a pay check tend to write messy contracts this adds a great deal of unnecessary stress to an already stressful process.
Now, take the common real estate industry practice of setting all the contract closing dates for the end of the month, on top of overburdened underwriters and loan processors, title companies stacking appoints one on top of another, and borrowers thinking they have plenty of time before closing to get their paperwork in. Not understanding that every part of this process has a waiting line causes delays on ever part of the process leaving both buyer and seller with full moving vans parked on the side of the road.
Whatever the case may be or how irritated we get while waiting, I haven’t known anyone personally who has called the AMA or state officials to complain about the waiting time at a doctor’s office.