You Get What You Pay For
I received a call from an out-of-area realtor mid-morning. The phone connection was broken and static, but his enthusiasm was real: "I have a really good offer on your listing!" he said. "I will send it over now."
"Fantastic!" I replied. "I will take a look at it and get back to you with any questions or concerns." I paused to ask the question I always do: "Are your clients pre-approved for a loan or will they be paying cash for the home?"
"No. A loan. They are pre-approved, and I will send the information with the offer."
"Sounds good." Then we hung up.
A while later I received the offer. Only it had the wrong date on the purchase agreement...one from weeks earlier. What I knew by this was the offer form he used to write up on my listing had probably been used several times before and the information changed. He'd just forgotten to look at the date. So, I called him and asked him to please redo the offer because I couldn't present it as it was. "Looks like your clients have been making a few offers, huh?" I said.
"I'm very sorry. That was an old form. I will get the new one to you soon." He sounded rushed. Speaking quickly and too loudly from his Bluetooth connected car phone.
The redo delayed us a day, but, oh, well.
The paperwork looked good. I had the name of the loan officer from the bank. Amy. As I usually do, I called her for information about the clients and their pre-approval. Very confidently, Amy assured me that the buyers were solid and their loan would take only thirty days (or fewer) to fund.
My client accepted the offer and we proceeded to escrow. We also arranged the termite inspection, I appeared at the home inspection (without the other realtor...whom, I might add, I never met), and I met the appraiser at the home. All seemed to be going smoothly. I was talking to Amy on a regular basis and trying to make contact with the overly busy realtor. Seems like he was always in his car showing clients homes all over.
In California, the appraisal contingency must be removed by the seventeenth day after the opening of escrow; the loan contingency by the twenty-first day, with a two day grace period. As those days approached, I contacted the realtor for the buyer. The appraisal was perfect. How was the loan going? He checked with Amy. So did I. By all accounts we were moving along great!
Then I got a call from the realtor. "Hi, Miss Kay. We need to move the loan contingency a few days. My clients have to go to Los Angeles to get paperwork they need."
"Is this part of the conditions on the loan?" I asked. Sometimes that happens before final loan approval. The bank will need a few more things.
"Um...no..." he stuttered. "I think it's for approval."
The twenty-one days were up by then. There was no loan approval. My client was set to close on his new home concurrently with the close of escrow on the listing.
Of course, I called Amy. She hedged. Said they needed another week. My client was rightfully upset but didn't want to start over with another buyer if he didn't have to. "I will set up a per diem for each day they are late. What would be fair considering your mortgage payment?" We settled on $400 a day.
The buyers balked. That was a lot of money! "Yes, I said. It is. And that is how much my client is losing each day you don't close on the home."
It was decided I should talk to Amy, who, in writing, promised to pay the per diem herself. That seemed odd. You know that sinking feeling in the pit of your stomach that tells you there is something horribly wrong but no one is leveling with you? That's what I had. "Amy, when can you assure me the loan contingency will be removed? We are set to close next week."
"Oh. We will be okay. I just need a few more days." I really wanted to drive to LA and go to her office and have a sit-down. The other realtor was MIA...It was me and Amy and the bank.
We were to close on a Friday. On the Wednesday before, there was still no loan contingency removal, there was per diem backed up to the tune of several thousand dollars, and my client was panicking. Amy had no answers. So, I called up the bank corporate offices in Newport Beach and asked to speak with the VP in charge. I told her my story. Told her about Amy and the per diem. Asked for her help since we were set to close. She assured me she'd check on it and call me back.
A couple of hours later, now close to dinner time, my phone rang. "Hope you are sitting down, Kay," the banker said.
That sinking feeling again. I sat.
"The buyers don't even have loan approval yet. Amy has barely begun the process. I have all the information they gave her and I will work on this tonight and tomorrow and call you back when I have something to tell you....I'm so sorry."
These are the nights when realtors don't sleep. Our clients are counting on us to complete the sale with as little trauma as possible. The buyer's realtor wasn't answering his phone by this time. Neither was Amy. But their buyers really wanted the home and had no idea how bad the service was on their side. The next day the buyers were contacting me and the bank directly. Per diem was an issue. Conditions were an issue. Shoot! Loan approval was still an issue! They needed to put the loan in only one name as there were credit issues with one of the buyers. Things that should have already been resolved still hung there like dead moss on a tree.
The bank VP was awesome! She took over the loan process from Amy, got the buyers into LA for the condition requirements, and called me late the next afternoon. "Okay, do you have some time to work with me on this loan, Kay? I need a record of all your emails to Amy, and I need to see the email in which she promised to pay the per diem...and I'm having a glass of wine while we do this, by the way," she said with a chuckle. Late night resolutions had become her happy hour. I poured one, too, and we got to work.
It took us a couple of hours to get all we needed together so that the bank took the hit for the per diem. The VP had all she needed to remove contingencies and fund the loan the next day. We were working against the clock and for my seller's upleg home. Those sellers were out of patience with him. And he was calling me every hour to inquire about our progress.
Early the next morning, the VP was back on the phone with me. Escrow papers were signed the night before, and the loan was to be funded in time for title to record by two o'clock that afternoon. The funder was sitting right next to her. They were giving me the play-by-play and I was reporting to my seller that it was all going to be all right. And it was. Whew.
Here's the thing I discovered in the process. The buyer's realtor was giving back over half of his commission to the buyers. It was the way he worked with his clients. What happens, at least in this case, is the realtor, who's made the same deal with all his clients, is too busy and disinterested to do much but send the same purchase agreement form around to however many homes his clients make offers on. Then he's done. That's literally all he did. I did all the rest. His buyers saw the home without him; he didn't even show them the home and never stepped foot inside of it. He was chosen because he gave them back most of his fee. And that's the kind of job he did for them. Substandard. They almost lost the home they really loved, and they would have if the bank hadn't ended up supplying per diem. And his buyers called to thank me. "We wouldn't have this home without you."
My seller breathed a sigh of relief and closed on his new home. I got a bottle of wine and loaf of my fresh-baked bread and headed to Newport Beach. I couldn't wait to meet the extraordinary woman who made the close of escrow happen overnight. We had a celebration in her offices and I met the funder and the underwriter and thanked them profusely as we all inhaled and cheered. I actually recommend the Newport Bank to my clients as an option for a mortgage loan because of the integrity with which they took responsibility and made the sale happen.
Bottom Line: If you find a realtor who is selling his/her services to you based upon the fact that you will get a concession on his commission at the close of escrow, beware! Someone will be doing the work that realtor is defaulting on. It might just work out, like it did for his buyers. But chances are, the realtor on the other side will not go the extra mile. Why should he or she? And realtors...let's go with our guts. I should have gone to the Newport Bank earlier. Shared my fears. We would have been a little bit ahead of the game that way.
"Fantastic!" I replied. "I will take a look at it and get back to you with any questions or concerns." I paused to ask the question I always do: "Are your clients pre-approved for a loan or will they be paying cash for the home?"
"No. A loan. They are pre-approved, and I will send the information with the offer."
"Sounds good." Then we hung up.
A while later I received the offer. Only it had the wrong date on the purchase agreement...one from weeks earlier. What I knew by this was the offer form he used to write up on my listing had probably been used several times before and the information changed. He'd just forgotten to look at the date. So, I called him and asked him to please redo the offer because I couldn't present it as it was. "Looks like your clients have been making a few offers, huh?" I said.
"I'm very sorry. That was an old form. I will get the new one to you soon." He sounded rushed. Speaking quickly and too loudly from his Bluetooth connected car phone.
The redo delayed us a day, but, oh, well.
The paperwork looked good. I had the name of the loan officer from the bank. Amy. As I usually do, I called her for information about the clients and their pre-approval. Very confidently, Amy assured me that the buyers were solid and their loan would take only thirty days (or fewer) to fund.
My client accepted the offer and we proceeded to escrow. We also arranged the termite inspection, I appeared at the home inspection (without the other realtor...whom, I might add, I never met), and I met the appraiser at the home. All seemed to be going smoothly. I was talking to Amy on a regular basis and trying to make contact with the overly busy realtor. Seems like he was always in his car showing clients homes all over.
In California, the appraisal contingency must be removed by the seventeenth day after the opening of escrow; the loan contingency by the twenty-first day, with a two day grace period. As those days approached, I contacted the realtor for the buyer. The appraisal was perfect. How was the loan going? He checked with Amy. So did I. By all accounts we were moving along great!
Then I got a call from the realtor. "Hi, Miss Kay. We need to move the loan contingency a few days. My clients have to go to Los Angeles to get paperwork they need."
"Is this part of the conditions on the loan?" I asked. Sometimes that happens before final loan approval. The bank will need a few more things.
"Um...no..." he stuttered. "I think it's for approval."
The twenty-one days were up by then. There was no loan approval. My client was set to close on his new home concurrently with the close of escrow on the listing.
Of course, I called Amy. She hedged. Said they needed another week. My client was rightfully upset but didn't want to start over with another buyer if he didn't have to. "I will set up a per diem for each day they are late. What would be fair considering your mortgage payment?" We settled on $400 a day.
The buyers balked. That was a lot of money! "Yes, I said. It is. And that is how much my client is losing each day you don't close on the home."
It was decided I should talk to Amy, who, in writing, promised to pay the per diem herself. That seemed odd. You know that sinking feeling in the pit of your stomach that tells you there is something horribly wrong but no one is leveling with you? That's what I had. "Amy, when can you assure me the loan contingency will be removed? We are set to close next week."
"Oh. We will be okay. I just need a few more days." I really wanted to drive to LA and go to her office and have a sit-down. The other realtor was MIA...It was me and Amy and the bank.
We were to close on a Friday. On the Wednesday before, there was still no loan contingency removal, there was per diem backed up to the tune of several thousand dollars, and my client was panicking. Amy had no answers. So, I called up the bank corporate offices in Newport Beach and asked to speak with the VP in charge. I told her my story. Told her about Amy and the per diem. Asked for her help since we were set to close. She assured me she'd check on it and call me back.
A couple of hours later, now close to dinner time, my phone rang. "Hope you are sitting down, Kay," the banker said.
That sinking feeling again. I sat.
"The buyers don't even have loan approval yet. Amy has barely begun the process. I have all the information they gave her and I will work on this tonight and tomorrow and call you back when I have something to tell you....I'm so sorry."
These are the nights when realtors don't sleep. Our clients are counting on us to complete the sale with as little trauma as possible. The buyer's realtor wasn't answering his phone by this time. Neither was Amy. But their buyers really wanted the home and had no idea how bad the service was on their side. The next day the buyers were contacting me and the bank directly. Per diem was an issue. Conditions were an issue. Shoot! Loan approval was still an issue! They needed to put the loan in only one name as there were credit issues with one of the buyers. Things that should have already been resolved still hung there like dead moss on a tree.
The bank VP was awesome! She took over the loan process from Amy, got the buyers into LA for the condition requirements, and called me late the next afternoon. "Okay, do you have some time to work with me on this loan, Kay? I need a record of all your emails to Amy, and I need to see the email in which she promised to pay the per diem...and I'm having a glass of wine while we do this, by the way," she said with a chuckle. Late night resolutions had become her happy hour. I poured one, too, and we got to work.
It took us a couple of hours to get all we needed together so that the bank took the hit for the per diem. The VP had all she needed to remove contingencies and fund the loan the next day. We were working against the clock and for my seller's upleg home. Those sellers were out of patience with him. And he was calling me every hour to inquire about our progress.
Early the next morning, the VP was back on the phone with me. Escrow papers were signed the night before, and the loan was to be funded in time for title to record by two o'clock that afternoon. The funder was sitting right next to her. They were giving me the play-by-play and I was reporting to my seller that it was all going to be all right. And it was. Whew.
Here's the thing I discovered in the process. The buyer's realtor was giving back over half of his commission to the buyers. It was the way he worked with his clients. What happens, at least in this case, is the realtor, who's made the same deal with all his clients, is too busy and disinterested to do much but send the same purchase agreement form around to however many homes his clients make offers on. Then he's done. That's literally all he did. I did all the rest. His buyers saw the home without him; he didn't even show them the home and never stepped foot inside of it. He was chosen because he gave them back most of his fee. And that's the kind of job he did for them. Substandard. They almost lost the home they really loved, and they would have if the bank hadn't ended up supplying per diem. And his buyers called to thank me. "We wouldn't have this home without you."
My seller breathed a sigh of relief and closed on his new home. I got a bottle of wine and loaf of my fresh-baked bread and headed to Newport Beach. I couldn't wait to meet the extraordinary woman who made the close of escrow happen overnight. We had a celebration in her offices and I met the funder and the underwriter and thanked them profusely as we all inhaled and cheered. I actually recommend the Newport Bank to my clients as an option for a mortgage loan because of the integrity with which they took responsibility and made the sale happen.
Bottom Line: If you find a realtor who is selling his/her services to you based upon the fact that you will get a concession on his commission at the close of escrow, beware! Someone will be doing the work that realtor is defaulting on. It might just work out, like it did for his buyers. But chances are, the realtor on the other side will not go the extra mile. Why should he or she? And realtors...let's go with our guts. I should have gone to the Newport Bank earlier. Shared my fears. We would have been a little bit ahead of the game that way.
Comments
Post a Comment