Hawaii Randy's Real Estate Opinions: June 2008

Ever heard that phrase or something similar?  Some agents pick the company they work for partially based on the number of meetings they have. I remember when working in Corporate America that phrase was tossed about freely.

I worked for a Fortune 500 company that would pull you in off the street for a meeting and then drain you of all your positive energy.  I got in a huge argument with management when I said I was not going to attend future meetings.  I told them they were taking take me out of the right frame of mind right before visiting key clients.  In the end, I attended the meetings and they changed their management style.

So back to the title of this blog.  Yesterday I was sitting in our Monday morning sales meeting and began to feel a little nausea.  I was sure it wasn't because of the meeting.  As the meeting went on I felt worse and worse.  At the conclusion of the meeting I ran into the restroom and found no relief.  I quickly figured out what was happening, it was a kidney stone.

I scooped up my laptop and ran out the door for home in a hurry.  On the way out I told WooHoo Sally (Celeste Cheeseman) I thought I was passing a kidney stone and was going home.  For the next two and a half hours I went through the cycle of pain and nausea.  From a couple of previous episodes I knew what to expect.  My personal home remedy that seems to work is to get in the shower as hot as I can stand it and run it on my back and side and then soak in the hot tub.  In between I answered the phone and scheduled appointments.

After a couple hours (it seemed like a month) my wife called and then I suddenly felt it.  Sorry honey gotta go!  It passed, Thank God! How can something so tiny cause so much pain?  A couple hours later I was on the road and back to normal. 

The next time someone tells me that sales meetings remind them of passing kidney stones; I can honestly say they do for me.

I thought I revisit this issue again, since it comes up so often in the course of doing business.

I frequently get asked about using a funding lender vs. a mortgage broker vs. an online lender.

I have some very strong opinions on the topic and have never been shy about it and why I have the opinions I have.

Randy's Rules:

• I strongly recommend using a funding lender whenever possible.
• I strongly recommend in using a local lender.
• I strongly recommend using an experienced agent and not a rookie.

I know there are some really great mortgage brokers out there.  I am sure there are some really good online lenders and out of state mortgage folks.  There may even be a rookie or two that will do a better than average job.  My experience has been that they are the exception to the rule.

Almost every bad mortgage story I have, involves a broker or an out of state lender. 

We are speaking about the most expensive purchase they may ever make.  It is not amateur night. 

A mortgage broker:

• A pre-approval is only an opinion from someone other than the folks who will ultimately approve they loan. 
• In most cases they charge higher fees than the banks
• Their agents are paid a commission based on how much they can run up your bill.
• Many times the Good Faith Estimate and the actual loan do not resemble each other.
• If there is a problem with the loan, you may not find out until very late in the process.

Out of State Lender:

• They do not know our contracts.
• They are unfamiliar with our laws and customs.
• They will not be there at the signing table to explain what you are signing.
• They will also never see you again.  Not much accountability here.

When using a local funding lender:

• You are dealing with the folks who will be approving the loan. 
• You have an loan officer who knows the laws, customs and contracts. 
• You have the ability to see them face to face and have them present at the closing table.
• They do business with your REALTOR® and have a vested interest in keeping both you and your agent happy.
• They tend to charge lower fees than most brokers.
• The loan letter they submit is much higher respected by sellers and their agent.
• If there is a problem they can have the underwriter review it up front.  This will give you time to address concerns and save time and energy if they can not do the loan.

My experience has been the folks that quote the lowest rate rarely come in with it at closing.  The local funding lenders are all extremely competitive.  The biggest difference is the loan officer.  Great loan officers find you the best deals and provide the best service.