The quality difference between individual lenders, like any profession, has always been wide spread as has the spread between different banks/lending institutions. As the market becomes more and more heated and closing dates become shorter, who you choose to work with as your lender has a greater impact on your success as a buyer than it used to.
We understand that often times the bottom line when selecting a lender is cost. And though this makes a lot of sense, it is important to understand all aspects of the purchase transaction so you can make a better more well informed decision that considers costs and other important factors.
A true story of two lenders:
Both stories are similar where a heated market with multiple offers caused the need for a quick close.
In blue is the story of our sellers selling a condo in Belltown that received multiple offers and sold within the first week above asking price. These buyers even put 25% down.
In orange is the story of our buyers who purchased a home with 10 offers, also selling way above list price. These buyers put 20% down.
Our Seller’s reach mutual acceptance on 6/18
Our Buyer’s reach mutual acceptance on 6/25
The Lender on our seller’s deal is out of state in California
Our Buyer’s chose to work with our local Seattle recommended lender team (which was part of the reason they were selected as the winning offer out of 10, according to the listing agent)
Our Seller’s deal was set to close on 7/8/15 (3 week closing)
Our Buyer’s deal was set to close on 7/15/15 (3 week closing)
Both lenders let us know that things were moving along and the deals would close on time
On our Seller’s deal, the loan docs arrived to Escrow 1 day AFTER our original closing date
Our Buyer’s loan docs arrived to Escrow 3 business days before closing
On our Seller’s deal, the buyers had to sign just hours after their loan docs arrived on a rush
Our Buyers were able to thoroughly review their Settlement Statement and sign at a time convenient for them
On our Seller’s deal, we had to extend closing twice and the Buyer had to pay a per diem fee to the seller for every day after the original closing date it took them to close
Our Seller’s deal closed 1 week (5 business days late) on 7/15/15
Our Buyer’s deal closed on time on 7/15/15!
The moral of the story:
Sometimes using a lender that gives you a better “deal” on loan costs ends up costing you just as much or more monetarily (at $100-$200 a day, that adds up fast) and in stress, last minute “fire-drills” and rushing around. Also, the buyer on the delayed deal became quite frustrated with the lender and had a much more unpleasant and stressful transaction. Our buyers were happy and calm throughout their smooth loan process. Their lender is even hosting the pizza and beer at their housewarming party 🙂 And selecting a local lender can also be the deciding factor in your offer being selected in a multiple offer situation. These are all factors to consider when choosing a lender.
By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.