I wonder how a Seattle Realtor must feel when his buyer breathlessly tells him this: "And I'm pre-approved with a great mortgage broker I found online! IN California".
Does the Realtor fake-smile while secretly knowing he will soon be SLEEPLESS IN SEATTLE? Does he attempt to refer the client to a local mortgage professional instead? Or is it best to shut up and buck up... because after all, you shouldn't interfere with the client's choice of mortgage broker?
And if real estate really is LOCAL, what is the allure of taking the "LOCAL" part out of the financing end of the transaction, anyway? Is it because we are trained to believe that EVERYTHING is cheaper/better/ smarter if bought online from some distant location?
Just because the Internet makes it possible to do business in another state does not mean it is better. Getting a mortgage is more than AN EXCHANGE OF DOCUMENTS.
You see, there are distinct advantages when the buying of real estate and the financing real estate are handled as one big ball of wax. When Realtor and mortgage professional are acting on behalf of the client like a finely oiled machine, the client has the best chance of a smooth, successful close.
It isn't impossible to have a finely oiled transaction with a far flung mortgage broker. But it's more difficult. And who doesn't need every possible advantage in this market?
Here are the TOP TEN reasons that THINKING LOCAL will work in your favor when choosing a mortgage professional:
1. TEAMWORK: It is far easier for your Realtor and mortgage professional to bond when they work in the same market, and are familiar with how business is conducted in their neck of the woods. This is huge.
2. UNDERSTANDING VALUES: It is an advantage for your mortgage broker to know and understand LOCAL property values. Why? She orders the appraisal from the appraiser, and will be the one discussing appraiser conditions and valuation with the lender.
3. LOCAL TESTIMONIALS You can read testimonials online. Or you can call up someone in your area that has actually used the local mortgage broker and get a direct referral.
- 4. MORTGAGE COMPANY IS A PLACE IN YOUR COMMUNITY, NOT A WEB ADDRESS: You can drive into the parking lot and go into the building. You can look around and get a feel for who they are and how they conduct business. It is nice to know you are supporting a local company, and nice to know who they are.
5. MORTGAGE BROKER IS A FACE AND A NEIGHBOR, NOT JUST AN E MAIL ADDRESS: E-mail has its place. But it will not replace sitting down and have the freedom to ask questions, and crunch numbers with a real live human being.
6. ABILITY TO HAND CARRY DOCUMENTS AND PROVIDE WET SIGNATURES: In the brave new world of fully documented loans, LOTS of documentation is required. More than you want to fax. More than you want to e-mail. More than you want to scan. Snail mail? Please.
7. MORTGAGE BROKER WILL BE AT THE CLOSING TABLE: Everytime I tell someone I will be there when they sign the final docs I can hear a little sigh of relief. You may not ask a single question, or you may ask 20 questions. But you won't leave the closing table without understanding how your new mortgage works with your mortgage broker there.
8. MORTGAGE BROKER WILL BE THERE AFTER THE LOAN CLOSES: You can't invite the online company to your house warming, or expect to call them up regarding changes in the local real estate market, and how this impacts your mortgage.
9. MORTGAGE BROKER HAS A VESTED INTEREST IN DOING A GOOD JOB NOT ONLY FOR YOU, BUT FOR THE REALTOR AS WELL: Mortgage brokers get business from Realtors. The mortgage broker that is local is interested in impressing the Realtor so he can maintain his ability to get future business from that Realtor. This works in your favor.
10. LOCAL KNOWLEDGE OF APPRAISERS, TITLE COMPANIES, INSURANCE AGENTS, INSPECTORS AND CONTRACTORS: What if lender requires flood insurance? Your mortgage broker knows who to call. What if out of area lender selects an appraiser that is not familiar with the area where you are buying your home? Every mortgage person has a stable full of vendors that are needed to quickly solve problems as they arise.
You can take the loan out of the neighborhood. But you can't take the neighborhood out of the loan.
Written by J. J. Guilbault, Mortgage Lending Expert Based Out of the San Francisco Bay Area