On the heels of our first-ever Agent Appreciation month, Inman is leaping into February with our Residential Finance theme month. Join us as we investigate how buying and selling a home is changing, from companies backing consumers in new ways to integrated services that handle the entire transaction.
Inspired daily by the takeaways learned in the field, top producer Cara Ameer has 18 years under her belt with licenses in both Florida and California. A self-proclaimed fitness fanatic, she loves working out, finds cleaning and organizing relaxing and can’t say no to strawberries.
Besides the home inspection, the mortgage loan process can be one of the most stressful elements in a real estate transaction. There are a ton of moving parts, and the buyers feel like they have to give just about everything but their blood type as part of the approval process.
Mortgage lenders swarm the real estate industry, and competition for business is fierce.
Many mortgage lenders will promise the sun, the moon and the stars just to get an agent’s referral. False expectations and missed deadlines often happen, which leads to an immense amount of frustration and embarrassment from the agent who generated the referral in the first place.
When the loan process gets derailed, it can set off an entire contagion of events that create a tremendous amount of stress for all involved. Here are eight things mortgage lenders do that frustrate agents:
1. Badgering for business
Although networking and follow-up with agents on some level is to be expected, when it comes to building relationships, there is a fine line between respectfully staying in touch and bombarding agents with phone calls, emails and texts.
Agents receive hundreds of solicitation emails each day, most of which are from people and companies that they never asked to be solicited from in the first place.
Then there are the endless phone calls constantly trying to sell an agent something. Mortgage lenders should be respectful of this and ask the agent’s permission first. Constant contact in this case is not a good thing.
Adding one more spam email to agents’ inboxes just creates more work. Agents already receive multiple mortgage market commentaries and rate updates. Adding one more is not going to tip the feather in a particular lender’s favor over another.
Ditto for numerous attempts to connect on social media, especially from lenders who aren’t in the same geographic area or have never met the agent.
Soliciting an agent on a weekly or monthly basis with repeated attempts to connect is not the way to go. If lenders are reaching out and agents are not returning the call, that says it all.
2. Over-promising and under-delivering
Real estate is a business built on relationships, and there is nothing worse than a lender promising something that they cannot deliver. Vendors who do this will quickly be deleted from the agent’s contact list.
Lenders will often promise that they can do just about any type of loan, and they claim they can close in a ridiculously quick time frame, like 10 or 15 days, with no explanation of the caveats required to make that happen or the fine print involved.
Unfortunately, agents often learn this at crunch time, and that loan that needed to close in two weeks actually takes four, which jeopardizes the deal.
As for specializing in all the loan programs? The agent later learns the mortgage lender doesn’t specialize in a particular kind of loan but has quietly referred it to a colleague who’s with a different company entirely. All of a sudden, someone else is contacting the agent and his or her buyer without explanation.
Lenders, please be upfront with agents about what you can and cannot do. If you do not offer a particular loan program, then just say you don’t rather than trying to place it with someone else while trying to make it look as if they are on your team.
When it comes to lending time frames, do not tell an agent what they want to hear; tell them what they need to hear. Don’t try to stretch to close something in two weeks if you know you don’t have the bandwidth with your processes to make it happen.
3. Taking and not giving
Constantly asking agents for their referrals gets old. There is no faster way to wear out the welcome mat than expecting an agent to feed the mortgage lender’s pipeline without a mutually beneficial arrangement.
Real estate is not a one-way business, and agents are constantly being solicited for their referrals with no offer in return from many of the vendors who love to ride the real estate referral train.
It’s not an agent’s responsibility to feed a lender’s pipeline or anyone else’s for that matter. Mortgage lenders should try giving, in the form of being a resource for agents, helping them develop their business and working to achieve mutually agreeable goals for buyers and sellers — before asking for referrals.
4. Being reactive rather than proactive
Agents want to know if there are any potential red flags early on in the loan process. Lenders should let agents know about any roadblocks that could threaten the transaction as soon as they pop up, rather than three days before closing.
Lenders should anticipate, prepare and troubleshoot as much on the front end and advise all parties of any issues as soon as they identify something that everyone should be made aware of.
5. Going radio silent
Ever met a mortgage lender who’s all about earning your business, hyping up his or her abilities — and then suddenly goes silent after you finally give up a buyer referral?
Sometimes the lender doesn’t return the buyers’ calls promptly when they reach out, which results in the agent having to get involved.
Getting updates is beyond difficult, and the agent has to chase the lender constantly for information. Every communication is reactive rather than proactive, and often an assistant communicates with the agent instead of the lender himself, who has basically handed off the file and is on to the next one.
Conveniently, the agent hears from the lender right before closing “checking in” with no clue that the agent has felt totally blown off all this time.
6. Being confusing
The loan process can befuddle all involved — including the real estate agent. Buyers are often confused and frustrated as to why they are being asked for so many documents after they’ve submitted everything and then some.
Although agents might generally have an idea of their buyers’ financial situations without getting into the weeds, they understand that issues can arise when a lender digs deeper.
However, agents might not know what the specific issues are that need clarification and additional documentation. Confused buyers often reach out to their agent, who might not be aware of the big picture and is now spinning wheels trying to run interference between the buyers and lender. It’s a lot of needless back-and-forth and wasted effort.
Clearly communicating the process, outlining the steps involved and explaining who will be contacting the buyers to request information and documentation is key. Keeping agents in the loop is also critical so they can stay connected to what is happening and help facilitate the process with the buyer as needed.
7. Dancing in the dark
All of the above frustration points often result in being kept in the dark, which is extremely stressful for both the agent and customer. This becomes particularly relevant when the lender is not able to meet the closing date in a timely manner.
One excuse after another is often given by the lender, and Monday turns into Friday with little progress made. The file seems to be stuck in underwriting forever, without much explanation as to why, and then it seems to take forever to obtain the clear to close.
Because the lender is not communicating, the agent has to reach out multiple times a day to try to find out what is going on and get the closing agent involved as well.
8. Lumping all agents into one group
It always amazes me how so many lenders who want to partner with agents take little to no time to learn about them, their marketing strategies, their individual businesses and what is important to them.
They tend to put all agents in a box and solicit them en masse, only focusing on what is in it for them rather than what could be mutually beneficial for the agent.
Very few lenders actually customize their reach based on an individual agent and what they are working to accomplish as well. There is a fine line between a mortgage lender trying to grab onto a successful agent’s pipeline rather than working synergistically to develop a mutually beneficial partnership. Clearly the latter is preferred by agents across the board.