Why Your Lender & Realtor Matters on Offers
If you didn’t read the 1st 2 parts about FAQs on Lenders & Mortages, start here:
A well-written offer is more than just purchase price and gives the Seller assurance you are serious and can move quickly.
When I’m presenting an offer, I am selling you as the Buyer + myself + the lender who combined, as a strong team who communicates, understands the process, has discussed & set realistic expectations, can move quickly, and ultimately get the deal closed. If 1 part of this team is weak, then it can be the reason your offer is not accepted due to the risk of the deal falling apart.
When you’re writing offers, this is like the Bachelor/Bachelorette. You want to get the Final Rose! Are you presenting your best side or are you already being demanding before you get an offer accepted? Details on a property don’t matter if you can’t get your offer accepted and into escrow.
Escrow can be short, intense timelines where most of the action occurs in the first 7-10 days with ordering appraisals, submitting your package to underwriting, scheduling inspections. If your team hasn’t set the Buyers expectations nor is willing to move fast in the first 2 weeks, the odds of hitting short contingency timelines or closing on time starts to look less likely.
In CA, every single day counts including holidays & weekends. So in a 15 or even 30 day escrow, you only have so many business days. Lenders, escrow, title, county and many contractors do not work on weekends.
No one wants to work with a Realtor or Lender that doesn’t communicate. Every Listing Agent (LA) has received offers where the Buyers Agent (I’ll use BA, but also known as the Selling Agent) NEVER called the LA to ask what terms the Seller wants. They just email over an offer.
What is the process/timing of reviewing offers? Do they plan to multiple counter? Will they 100% stick to a deadline or respond possibly sooner. Do they have other offers? What other color can the LA offer?
How clean is your offer written? Did the BA follow offer instructions? As a LA I do not want to counter on 15 technical items because the BA didn’t bother to read Offer Instructions. Errors are made on offers, but not 15. Did the BA listen to the feedback from the LA on what the Seller wants? If either the BA nor Buyer took any of it into account, and the Seller receives multiple offers, they may opt to work with a Buyer that wrote an offer that clearly did listen. No one wants to work with a difficult Buyer
Does your agent overshare details about you? I have a straight forward communication style where I do not omit details / hide things from clients. But I do NOT overshare with the other side about price, your motivation, etc. I don’t share anything that can be used against you. What is your agent’s negotiation style?
As the LA, when I call your Lender when vetting offers, and your LO doesn’t know who you are, what you’re buying, or I have to call a 1-800 number and random people call me back each time we play phone tag, this isn’t going to go well. If they have not looked at your full financial package, do not know what you are buying, these are all red flags.
I received an offer once on a 2 unit, VA Buyer, but the Buyer’s lender did NOT do VA 2-4 unit lending. Even if the Buyer didn’t know to ask, did the BA not double check? When I’m representing the Buyer, I always talk to the Buyer’s lender if I don’t know them and vet them the way a LA would
Can your Lender close fast? In order to compete against cash, you may need to close as fast as 15 days or sub 21 days. This may be especially important when the property is vacant, the Seller needs to close on this property so they can buy their next home and they have already identified the next property OR are already in escrow on a contingent offer
Most deals are going to fall apart either right away- the Buyer rushed to write an offer and gets cold feet, or after inspections or the Appraisal. This is why a good LA will want to know if you’re an experienced Buyers, have you been looking for a while, or has the BA explained the norms in your market/set expectations on reasonable asks? Are you prepared as a Buyer to do work- no home is perfect, there will always be work needed after close, even in new construction.
Shorter contingency timelines for your investigations and your Appraisal contingency give the Seller confidence that you as the Buyer are prepared to move quickly, and you can negotiate these items/concessions if needed. If both parties can’t come together, then cancel and move on so the Seller can get the house back on the market.
Your LO should be willing or tell you about ordering Appraisals on a rush, how quickly they come back and then get reviewed and signed off on by underwriting
The LO/lender aka investor can underwrite your loan quickly. If they run into issues, everyone wants to know ASAP. This can be things like difficulty verifying IRS transcripts, the lender needing more documentation about a development, HOA violations or litigation. Or worse, they find something that means they won’t do the loan. You as the Buyer want a LO who has a Plan B if needed and hopefully the Seller will allow you to stay in the deal/ extend timelines.
The buck stops with the Lender, if your Lender will not fund your loan, your deal is dead in the water. In some cases, you have removed all contingencies and now your EMD (Earnest Money Deposit) aka Initial Deposit is on the line if you can’t close with another Lender