Tuesday, April 23, 2013

Which Comes First, the REALTOR or the Loan Officer?

It is often debated, the philosophical question, “which came first, the chicken or the egg?” There are many ways to address that question. (Though my preferred way is to show a lolcat photo of a cat in a chicken hat and avoid the discussion all together.) But really there is no definitive answer.

When buying a house, there is a much less philosophical but equally confusing dilemma, "Which comes first, the loan officer or the REALTOR®?" Both professionals are equally important in purchasing a home but who should a home buyer contact first?

As a REALTOR® I would prefer for a buyer to contact me first. Whether you are a first time buyer or have a property to sell, contacting an agent is an important first step.

If you have a home to sell, the loan officer will need to know an approximate value of the home you will be selling. Of course, you and the mortgage professional can guesstimate. But if the estimated sales price of your current home does not reflect a realistic selling price, you may find yourself short of funds for a down payment.

But even a home buyer without a house to sell could find it easier to contact an agent first. Recently, I was called by a first time buyer who was preapproved with her bank for a first home. She explained that she was going to be buying with a conventional mortgage and showed me the letter from her lender. Something just didn’t seem right so I had her run the numbers with a different mortgage professional that I know who has years of experience. It was a good thing she did. The first loan officer discounted a dispute on my client’s credit report and her limited credit history. She would have never been able to obtain a conventional mortgage. If she had written an offer using the original preapproval letter, her earnest money could have been put at risk if she didn’t qualify for the mortgage.

Home buyers do not always know where to find a good loan officer or what questions to ask to determine the experience level he/she has. As an experienced real estate agent, I have a list of  high quality mortgage professionals I have worked with previously. Experience can prevent most situations from becoming big headaches down the road.

The bottom line is, start with someone you can trust. If you find a real estate agent you trust first, then ask for a referral to an experienced, professional loan officer. Conversely, if you know a high quality mortgage professional that you trust and want to work with, start there. Most REALTORS®, myself included, will work with any loan officer that represents their client in a professional manner. The key is to get preapproved before starting to look for a home. Knowing what you qualify for, down payment required and an estimated monthly payment, will ease the stress when you start viewing properties. It’s hard to write an offer, if you do not know what you can afford!

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