Preventing Fallout: 5 Questions Every Agent Should Ask (Part V)

This is the final post in a series designed to help agents prevent fallout that can occur when you work with an unknown lender. Part I was aimed at down payment. Part II was all about income. Part III focused on credit, and Part IV on pre-approval. Today we’ll find out who our client is working with.

Normally, you look to your lender for confirmation that it’s okay to start spending time and effort on this buyer. But when the client arrives pre-qualified by someone you don’t know, don’t assume the best. Take these steps to protect your transaction.

Question #5: Who is the lender?

Ah, the final question. You should know who is messing around in your sandbox. Is the client working with a friend or family member, perhaps someone part-time or new to the business? As business slows, recently minted loan officers have scurried back to their day jobs while still trying to grab a loan here and there. Part-time lenders cannot possibly stay current on the important changes that are rapidly occurring in the industry. You don’t want to be in a transaction with that person.

I’ve seen desperate lenders charge enough to make their next three mortgage payments off a single client—even when that client was a friend. The client may not discover this until she sees the HUD 1. An agent recently brought me a client who was being charged $18k in loan fees. She only found out because the lender wanted to increase the purchase price enough to cover the necessary seller credit. I was able to secure a lower rate and $3500 in total fees.

Is it an Internet lender? Those people are poorly paid, and it isn’t because your client is saving money. They tend to be less experienced and have little incentive to work hard. Communication can be spotty. Most importantly, they feel no accountability to you since this is a transaction and not a relationship.

Newer agents seem more reluctant to grill the prospect on these questions. But if you ask your peers to share their horror stories, you’ll have plenty of ammunition to help explain to the prospect why you need to know. In the end, tough clients respect tough agents. I believe that we establish our credibility and position in the relationship by the questions we ask early in the conversation.

So be bold, be confident. Go for it!

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