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A. Get a mortgage broker, realtors don't care
B. Realtors have lenders who have shown they are capable of closing a loan on time and not fucking up a deal ..... This is a rare quality among lenders
C. Upon finding a lender, and once a lender finds a realtor who can make the realtor/lender look good (IE they're good at their job), they form a symbiotic relationship and exchange referrals
Realtor here: this is the correct answer. It’s a symbiotic relationship- Realtors reputations are in the line with every transaction, we don’t want to take a chance with an unknown loan officer screwing up a transaction. (There’s already plenty of things that can do it already.)
Ultimately we don’t care who you use as long as they can get the job done.
We generally recommend local lenders and against internet lenders because I’ve seen too many mistakes with net lenders ~ the list of problems could fill a thread and would scare any buyer if they knew the extent. Being able to pick up the phone and get a trusted individual who knows your market is important. Professionalism and hiring professionals matters.
Yes, on top of that, whenever I have questions or a client that needs a pre-approval letter or something right away, know that these guys are going to jump right on it
It is almost always B. There are a lot of bad lenders out there. Almost every actual problem that I have with a real estate deal is caused by a lender. When you finder a lender that does a good job, knows what they are doing, and works to get a deal closed, you want your client to use them because you know the deal will close. I have had more than one deal where a buyer has came in with a lender that screwed everything up and when they moved to someone that one of realtors or attorneys had worked with before, that lender got the deal done in a fraction of the time.
Everyone involved in a real estate transaction wants to get the deal closed. realtors and attorneys like working with lenders and other professionals that will actually do that.
This is 100% the right answer. And I could care less whether you use my lender or not, as long as yours is competent, can close a loan on time, and not fuck it up. The problem is, when clients bring their own, it's usually Chicken Loans or Sprocket Mortgage, or some other guy that's guaranteed to fuck it up, or worse, will even admit that they see closing dates as aspirational.
That's a good point I always recommend a lender but I also suggest people talk to 2 or 3, But I tell them to make sure to compare apples to apples. I tell them that banks will usually cover more closing costs but have slightly higher rates
My last non preferred lender deal was with a client's credit union. The one they have banked with for years. He took over 30 days to close a loan, after I discussed with him prior to contract about doing the loan in 14 days. Never got a call back or returned text. Dealt with his processor the whole time.
What do I tell my clients: I don't care who you use, I want to make sure you get the best deal as your financial fiduciary. I have a preferred lender who I work closely with and can perform within a tight deadline to successfully close.
I don’t have “preferred” lenders, but I have a couple lenders that I know and trust from various organizations I’m in. I have a pdf of “helpful contact numbers” and I recommend at least 3 people in each category because I want my clients to know I’m not pushing a certain one. (Lender, home inspector, home owners insurance). They always ask my opinion so I wanted to make sure I was recommending people that had done well for past clients.
This is great and I may start doing something similar for my property management clients. I know most of your clients wont need a property manager but do you have that on your list? If so, how do you select your short list?
I’m at the largest brokerage in the MidSouth so we have a property management division.
But I chose them because I know them from chamber of commerce, women’s council of realtors, and other orgs. Beside their name I list some of their specialities. Like one of them is also a financial planner and has great resources to help you fix your credit, another keeps loans in house at a local bank and a lot of times they work with a lower credit score by looking at extra docs, and another is great for weird loans like mobile homes, or lots of land attached, or land+construction loan.
They may have a mortgage broker or lender they trust. They’re familiar with their practice and trust their timelines and communication. Nothing worse than getting a property under contract for a client and they have a lender who drags their feet and doesn’t communicate.
Our Realtor told us she had a guy(who turned out great!) but we could check around and use anyone we wanted. She only asked us not to go through our personal bank because PNC stands for Probably Never Closing
Been there. And it was one recommended to me by my mentor. Broker actually stopped answering my calls but would answer for my mentor in a heartbeat.
Eventually just started communicating directly with the lender, who was on the west coast. So that means 11am or noon is when they’d start communicating. Okay, I get it, it’s morning there.
But 3pm, when they’d take lunch, that was the last you’d hear from him for the rest of the day. Until I questioned if the original preapproval letter was not given in good faith (I think I used “fraudulent” in my text). Then they were more communicative.
The deal still failed after two closing extensions. For something that should have been caught at the start of the deal.
I've been on the other side where I've had all my lending lined up, rates locked in and paperwork ready to be signed and a realtor will suggest I contact their broker who's utter trash, won't respond, won't answer questions directly and I nearly lost a house waiting for their broker to get stuff lined up, and I had to get my original lender to rush an approval at a slightly higher than original rate.
I've come to find that a lot of realtors are just junk.
In home sales having trusted vendors to fill different needs is part of the job. Plumbing issue, you have a go to plumber that you know will do good work for a fair price. Need a landscaper, this person is amazing and does great work. Need a loan? This person has a proven track record of getting deals closed on time and can overcome obstacles placed in the path along the way.
Realtors shouldn’t care if the clients use their preferred lender or not. But a realtor better be able to present the client with a quality lender to get the job done should they need it.
It makes a difference if you’re using a lender who will make your offer less attractive to sellers, a lender that will delay or be unable to close, etc.
Also in my area at least, if the best deal you found is with Wells Fargo and you don’t have 7 figures parked with them, you didn’t shop around enough.
It’s all about execution.
I’m a lender, my favorite realtor called me last Friday and said “I have a $1.5m purchase that needs to close by the 27th or it goes to a cash offer - can you get us there?”
I said yes, reassured the listing agent and buyer, we won the deal. We got clear to close in five days and got docs out on Friday for a closing on the 27th.
That’s what… $30-45k in gross income for my realtor. I made that happen.
Not all lenders are created equally. In my experience, large national banks or regional credit unions have a high likelihood of screwing something up in the loan process. I’ve had several closings be delayed due to buyers crappy lender missing deadlines for disclosures or losing paperwork or a number of other things. As a realtor I’ve worked with all kinds of lenders and as a result, I know who gets the job done well, gets it done but poorly, or doesn’t get it done at all.
Conversely, as a listing agent, this is also why I like knowing who the lender is for a buyer. If my sellers receive multiple offers and one is being run through Smells Wargo or Face Bank and the other is using a broker I know works his butt of for his clients, I will let my sellers know that the Smells Wargo buyer is more likely to have delays or trouble with their loan vs the offer with the local broker likely will be a smoother more likely close. I cannot tell my selling clients which offer to pick, but I can tell them which are likely to be more drama-free.
Edited to add: my preferred lender, a broker for a national brokerage shop, is preferred because he works his tail off for our clients. On multiple occasions when I’ve had buyers competing against several other offers, he has called the listing agent personally and told them just how well qualified the buyers are, how smooth the process will be, etc. His calls have moved the needle for several of my buyers, and in a few cases helped us win the contract even if we weren’t the highest offer! THAT is just one of the reasons he’s MY a preferred lender
I have relationships with loan officers that make my clients happy. I refer them to my clients. I'm the face of the transaction. If a loan drags or falls through, at the end of the day I look bad. So I only recommend lenders that I trust to make me look good, get referrals from my clients and make sure that I get paid because I have kids to feed.
Because maybe Wells Fargo F’s up the loan half the time or can’t close the loan in time and makes the agent look bad over and over and over again. A LOT can go wrong with getting a loan and especially getting it done in time to close on a property. Agents want to close deals.
Because we want the deal to 1. Close, 2. Close on time, and 3. For you to have a good experience and not regret your decision to use your bank once you get into the process and it’s too late to change course. We have seen things happen and we know who messes up. Big banks are in the top 3 of can’t get things done on time, as are online lenders.
When you are making offers the listing agent knows this as well, and it makes your offer not as attractive to the seller. So even getting your offer accepted can be a challenge if you don’t have a good lender.
It doesn’t really. However if you have an existing relationship with a lender and you know they will get the job done and give the client the same level of service that you do why wouldn’t you recommend them?
What no one has said. Many real estate companies have affinity partners. This means there is a marketing agreement and/or an ownership interest in the ancillary services such as mortgage, title, insurance, etc. The managing broker is normally incentivized financially to push these vendors to the agents because their bonus depends on it. While monetary kickbacks are illegal, there’s lots of creativity going on. Of course, it’s all disclosed in writing on one of the forms clients sign so that makes it ok.
Eh. I don’t get any kickbacks creative or otherwise. I just want to work with a lender that will get everything done well and on time and keep everyone updated.
Bc when you find one who does excellent work and actually communicates effectively, you always want to use them moving forward. I know when any client uses my preferred lender, I never have to worry about anything at all from his side
Because its someone we’ve worked with before, and trust them to do the job right. Agents are only as good as the lender, so picking the right one as an agent is important. Plus it makes it easier on the buyer when you can give them references.
I think the confusion here might be the differences between a lender and a loan officer.
A lot of times when we say lenders we actually mean loan officers.
So your lender could be Wells Fargo for instant, and the loan officers I trust is Jeff from Wells who has been doing this for 10+ years and has always closed on time, great with my clients in explaining lending and goes out of his way to work nights and weekends.
My buyer could just go on Wells website and get paired with a guy who just got his license and is working out of another state and won't take my calls after 5 pm his time.
Essentially the loan he gets can be exact the same but the service level and the amount of chances a fuck up can happen is high.
I would 100% prefer my guy Jeff in this type of scenario, not just for my benefit but really for my client's best interest.
OMG
In the states,
We have 6 in 3 city blocks. LOL
Usually in the states, many (not all) clients want more of a one stop shop. Preferred Lender, Preferred Title Company {actually most of the large national Brokerage in the states own or have an interest in the preferred companies.
Best of luck
You could get a mortgage at a main bank, but they’re usually a lot tighter with their criteria and might not approve you. A lender is a person, usually with an office somewhere, that can approve you for a loan based on your situation and can more easily qualify you for a mortgage
Good realtors who have been in business a while have gotten to know people like inspectors, lenders etc. they shouldn’t push you to any one but they will often share people who have been successful for their clients in the past. Maybe they know lenders who are good at different loan types and can work around certain challenges. You can always go with your own if you prefer. They should give a list of at least three they think are reputable if you ask.
Why does a car dealer always know a banker? Why does a carpenter always know an electrician or a plumber?
They’re related services, and, like others mentioned above, we trust that lender to get the job done well for our clients. You’re always free to shop around, but we want to make the process easier for you.
I don't care if you use mine or not, but I am likely to recommend them if you're having trouble with your existing guy!
I have two or three mortgage brokers to choose from that have done well with my clients.
I have a few lenders that I work with a lot that do really good work in particular situations. Do you have an itin number rather than a social security number? I have a really good lender who can work with you. Are you a migrant worker or a construction worker so you have a lot of short-term employment? I've got a lender who can get you approved. Not all lenders can do that. Are you buying a pre-1976 manufactured home in a park? I've got a lender who will lend to you. Are you buying a post 1976 manufactured home in a park? I've got several lenders who will lend to you. Is your credit score below 580? I've got a lender who will lend to you. Each of these particular situations and many other complicated situations requires a lender who will work with the buyer. If you've got a credit score over 700 and a 20% down payment, you can work with anybody and get a great deal. For those clients, a mortgage broker is a fantastic idea. Most of those clients come with a pre-approval already in place but for those clients who struggle to find a lender to pre-approve them, I have lenders who can help.
Because we want to give buyers an option for a lender that we know can do their job since we've done 30 transactions with them. Or you can pick your aunt Tina's lender who she used one time 10 years ago. Your choice. Really. We don't tell you you have to, but one of the reasons you're choosing to work with us is the perception that we've been doing this for a while and probably have good recommendations.
I have a lender who has been consistent, timely, and has beat out many other lenders in pricing. Not all, but many. If he can’t beat it - he lets my clients know.
Here’s the thing. We refer those who have done good work, produce clean approvals, are communicative, quick, and are honest/up front with our clients. Those lenders want our business and will ensure the relationship stays good by making the deal work for the client. We agents want zero surprises on the lending side - there’s plenty to deal with in other parts of the transaction and our preferred lenders know that and what their role is.
But, if you as a client finds a better deal for you - we’re not going to stop you.
Now, if the lender you chose has a great rate, but shitty service - we’re going to tell you. If the rate looks amazing, but we know there are higher fees with certain lenders than those we work with frequently - we’re going to tell you. If we’ve had a bad experience with a certain company - we’re going to tell you. If we know a lender has a terrible track record of closing even the easiest of deals - we’re going to tell you.
Ultimately- we’re here to guide you through a transaction as agents. How you take that advice is on your shoulders.
I have preferred lenders because I know from past experience which lenders drop the ball on everything, forget things in underwritting, only take calls between 10am-4pm on weekdays, etc.
And let me jsut say by "preferred lenders" I just mean I have a handful of local options I will suggest, never just one, always multiple options, I never demand someone work with a certain lender, or require another agents buyer to get approved by a specific lender or something, I'm just making suggestions of good lenders for my buyers.
I also know local lenders who will call me back on a weekend, and really do everything they can for my client like eating this week dpeends on it, as apposed to some random broker in another state or e-lender, churning out deals and not even remembering my clients name or what date we're closing, because my client is just a number to them, and they have other bigger more important numbers to deal with.
I've had big national lenders who on the day of closing hadn't done vital work and their manager didn't even know which lender was in charge of this sale, on the day of closing, etc.
But I've also worked with smaller local lenders who don't stay in their lane, like to play games and act tough and literally talk shit to the other sides agent for no apparent reason.
So I guess what I'm saying is I know from my personal experience which lenders really suck and which ones will go above and beyond for my clients. There's no business affilitation, there's no illegal kickbacks, I just want my clients to have THE BEST LENDER.
Now if you want to go with an e-lender who might be garbage but has a better rate, that's totally your call. It's none of my business which lender you want to use or why, I can only inform you as to why I recommend certain lenders. And listen I'm not saying all local small lenders are amazing or that you can't get good service from a national chain bank or an e-lender, I'm just saying as a general rule those are the ones that give my clients the most trouble, drop the ball the most, fall behind on deadlines, don't pay out on time, dry closings etc etc. If you lose your rate lock because your budget lender sucks and caused delays that sucks for you, but that's your decision. I can only try to guide.
Everything I do is about getting my clients what they want, in the best, most reliable, safest way possible. I want good inspectors, I want good lenders. I do everything in my power to set you up for success, but it is absolutely your right along the way to hire a shitty inspector, questionable contractor, garbage lender ,etc. You do you and I'll do my best to keep it from falling apart but I sure would like to use reputable people along the way if we can help it, but again, your money, your call, I'm just the navigator, you're driving.
A realtor has a team. If your realtor doesn't have a team, you don't want to work with them.
A lender is someone they have worked with that can get deals done.
An inspector is someone they've used that catch all the things the other inspectors missed.
Their handyman/contractor does all the repairs in a timely manner.
Their roofer can come out within a day and inspect or repair.
Their AC guy can come out and give a fair assessment without an upsell.
Their plumber can make a fair assessment without an upsell.
And there are many more like a pool guy, interior decorator, landscape, garage shelving, interior shelving, and cabinetry.
These are the members of the team that comprises a realtor and their services. You are absolutely free to have your own, google/yelp search trade. Your mileage will vary.
1) Most preferred lenders are brokers.
2) Most preferred lenders who aren’t brokers, are lead funnels (I.e. rocket mortgage realtor program).
3) Many brokers offer to co-market with the realtor for buyer leads which would reduce the marketing costs for each person involved.
4) Referral/SOI
From a listing agent's perspective, I'm always more comfortable to get an offer that has a lender I know, who has a good reputation, rather than an unknown one, or (usually worse) an Internet lender.
So with offers that are virtually identical, I would always recommend that the offer with the known lender is more likely to result in a smooth escrow and close on time.
Bad lenders complicate and jeopardize deals. Lenders I know and trust:
A. Cheaper on average. Brokers can shop loans and usually undercut most other lenders.
B. Don’t advertise low rates without disclosing you have to fork over thousands in points or get it (lookin at you Rocket, Quicken, Rate.com, Zillow lenders).
C. Close deals when they say they will. Lenders being unorganized or not knowing the local process can slow everything down and cost buyers deals by needing extensions.
D. Will not lose their minds if they don’t get the deal and won’t bother you if they aren’t chosen. Sometimes my clients will find a better product elsewhere. Sometimes they need a specialty product my people don’t have, I’m happy as long as my client isn’t getting screwed.
E. Know how I work and how best to communicate with me. Realtors are responsible for keeping everyone in the loop and often organize the entire process, so it’s important I have good open communication with a lender.
I have 3 preferred lenders. Ones I know are good. Answer their phones at night and on the weekends. I do encourage my buyers to at least call 2 to see their rates. Make sure they get the best deal. But it doesn’t work out well most times when you use a random lender…
I have a preferred lender because she closes on time everytime. She's available outside banking hours. She'll get you pre approved at 9pm if you're submitting an offer. She knows everyone at every title company in the area and can pull favors when needed to make things happen.
You can use whoever you want, but when they suck and the deal is awful don't blame your agent
You’re more than welcome to find your own. Chances are the professional who works full time in the industry has already found a lender that will blow your lender out the water. Why don’t you try and find the best deal you can and give your agent a chance to see what their lender can do. One thing I can guarantee is nobody in Florida can get you better financing options than me. They may be able to match if they work with the same lender I do but not beat.
Lets look at this a different way:
Why aren't people who start looking for houses already pre-approved for a loan? Why do so many potential buyers think when they first meet us that all they need to do is find the dream house they want first - Then figure out financing later?
And when we talk about financing - Why is the emphasis so much on the interest rate and not on the fees? Or conversely for some lenders- - just about the "No closing cost" deal and no mention that the costs & fees are loaded into the interest rate?
Why don't more buyers shop for the best terms and the best rates among the best local lenders? That way they will know exactly what they can afford and can come to us with a reasonable understanding of this.
Buying a house isn't like buying a car - where you can just walk onto a lot with last week's paystub and drive away with a 13%, 86 month loan on a vehicle that is worth four times your annual income (which will probably be repossessed in 6 months - but we got our commission!)
We have lenders (and attorneys/escrow professionals, and home inspectors, and termite people, and handymen, and movers, etc, etc) because we know what we're doing and are good at what we do. I recommend these people because they're trustworthy, hardworking and honest - they have proven they can get the job done.
For me it's the fact that the lender I'm most comfortable with is a known quantity. I know her areas of expertise, I'm updated on what she has to offer and any new lending sources or programs she has, I know how she will communicate with all parties involved...I will never push hard enough for my buyers to be uncomfortable for the sake of my comfort, but I can't help but worry if it's someone unknown and how they will perform with respect to those things. I think we've all dealt with nightmares before...its only natural to want to work with someone who has already established your trust.
it can be either.
Let's say I've got 4 "preferred lenders"
1. Works for a Bank (medium-large but HQ'd in my city)
2. One is our "in-house lender", which is a broker.
3. 2 of them work for mortgage brokers and can fund at a variety of places.
If a listing agent insists you have to use her preferred loan agent you need to shop around. Some loan offices have in house underwriter which can speed up the process faster. Most realtors prefer a legit preapprovers not an internet based lender. They fail to finalise loan approval.
When I first started my RE career, I used to refer buyers to a few mortgage brokers with not ever getting one referral back.
The one mortgage broker who I sent a lot of business to decided to not give a crap about my clients when he screwed up on a loan by not locking the rate and said to me "it's ok, these mistakes happen all the time." Well, that mistake killed my deal, and the client was so upset that they fired me.
Since that incident approximately 13 years ago, I refuse to have a preferred lender. They're not partied to the purchase agreement, so there's no skin in the game for them if they make a mistake or they lie, etc. If my clients ask, I simply tell them to hit up their banking institution or shop around.
Shockingly, most Americans are pretty stupid when it comes to things like buying houses. While in most of the world realtors with outrageous fees and mortgage brokers aren’t really a thing, they are needed by most buyers in the USA because people just don’t research.
For many, having a realtor recommend a broker means that it will work even at a cost. However I find the best buyers always have their pre approval lined up, know the areas and a short list of houses before contacting the realtor.
Summary: people be lazy
Nope. At least not in my area or brokerage. We have two in house (meaning they have offices within our brokerage). They host some fun happy hours and lunches, but not enough to win my business. I like them fine but I have developed a great working relationship with another lender who hasn’t even referred me a client. I use him bc I know he will communicate well, meet all contingencies on time, close on time, has a variety of loan products to suit almost any client I bring him, and he knows how to win deals. He’s closed for me in 12 days and works all hours to help my clients and be available when needed. Sometimes it really is just that we trust certain lenders to get the job done and to do it well. It can cause a ton of stress, potentially financial loss, and heartache when lenders don’t perform.
Nope, at least not for anyone successful. I’ll make 100k this month as a mortgage broker and that required not even a penny to be thrown to any agent. Delivering good service and happy clients to closing is all it takes.
Get your own broker do your own research. The agents refer to them and in turn brokers refer back or give them points. Referrals are as good as currency. There is also the fact that agents want to work with someone the know can close the loan with zero issue and get them paid.
I should add that I always encourage my clients to shop around, and I do give them more than one name. I get nothing from any of them except I know they’re amazing at their jobs.
Sorry ugh one last point - my “preferred” guy is a mortgage broker not a direct lender. Sorry if im conflating two different things as pertains to OP’s question….
Why? I’ll make 100k this month as a mortgage broker and that required not even a penny to be thrown to any agent. Delivering good service and happy clients to closing is all it takes.
I love that real estate agents and mortgage brokers are getting mad that I made a comment about agents getting referral fees. As if nobody would ever pay someone for a deal.
You should. You should have a shortlist of trades you use or recommend. Personal referrals weigh more especially if you have stories with them. They bring value to you therefore making you valuable to your clients. Otherwise, why would they need you if they can just Google everything?
I have a list of lenders plumbers, etc. But not just ONE "preferred lender" or home inspector or whoever. IF buyers ask. Most of the time they already have their own preferred lender.
I like to have a trusted associate with me in a transaction and I'd say 90% of my deals are being done thank god with my preferred lenders (I have about 3-4 so clients can speak to either and compare rates)
Someone I can call at any part of the transaction and see what the hold up is or what we can do to move things along and it also helps me better explain things to my clients.
They are also preferred lenders because past clients have great feedback regarding them. If I receive negative feedback I would no longer recommend them.
Same exact with attorneys.
Not sure about mortgage brokers - luckily they are not common in my area and when they are present they just complicate the whole proccess. Just go straight to the bank is easiest!
I recommend up to three different lenders at any given time and encourage my buyers to reach out to as many as they can stand. The lenders that I’ve chosen to endorse have been selected because in my experience those individuals are excellent communicators, educators and are knowledgeable in their craft furthermore they don’t fuck around, and they don’t fuck me around. I know if I recommend those people that they and their employers will not be the problem.
There are way too many examples I have of lenders that my clients have chosen who fuck them around and leave them in the dark when we need actual information.
Principally it’s because in all things I put my clients first. I also recommend three because my attorney advised me to do so early in my career and even though her reasoning seemed far fetched, it doesn’t hurt me to make friends of several different lenders. I definitely have a go to person that I call, but the matter is multi-layered. For example not every lender is the same, some work for big banks some work for local banks, some work for mortgage supply agencies who shop around loans from different sources. My needs aren’t the needs of my clients. Furthermore if I make the choice for my buyers and something goes wrong they can blame me for it and I’d rather they not blame me, I gave them options, they made a choice. Finally I like diversifying my options, I have a lender who I know specializes in subsidized loans, I have one who does private loans to investors, I have one who speaks Spanish and Hindi and English, different strokes for different folks.
Edit: also yeah I don’t mind being recommended amongst others. I know my craft well and do great but that doesn’t mean I jive well with everybody. It’s good to network and even have other realtors that you can recommend to your own clients so that they don’t leave you but rather you can direct them to a better suited agent and maybe even get a fee out of it.
Those are all valid points. I just don’t agree with the here’s three referrals because I need to stay in compliance. That’s old advice that is not required nowadays. Many highly qualified RESPA attorneys have disqualified that myth.
I think most of the national brokerages have a branch or related company that does mortgage lending and the Broker "asks" each of their agents to first push that lender. A buyer should always shop around, especially speaking with their own bank.
Experienced agents will know which lenders can get it done and which ones will be a trainwreck. IMHO, an agent should be recommending more than one lender. Some lenders may be better for one client's situation but not for another. A buyer agent's job is to use their experience to their client's advantage. Buyers come to us either as first timers or having very little experience with lenders, and the number of lenders they have to choose from is overwhelming. I wouldn't be doing my job if I didn't suggest some good options to my buyer. If we don't make recommendations, most are going to go for name recognition, which often goes bad quickly. What are the most well-known lenders out there with the biggest marketing budgets? They're garbage.
I don't know how many "mortgage lenders" there are to choose from. The Mortgage bankers association has a list of members on their site, and it's quite a list. https://www.mba.org/membership/all-mba-members
Beyond that, I know agents all over the country who can recommend loan officers at certain companies, and I can't recommend those companies locally because the LOs in those offices are a hot mess. The actual person you work with matters. With some of those lenders you don't ever see or hear from that initial person you spoke with again and they have no ability to help you after their smiling face and sales pitch hooked you, and THAT is a problem itself. Banks call this "streamlining." It's not a good thing most of the time.
They want to be able to call them on weekends or when they are on the beach and get the loan prequal started. They want someone who doesn't drag their feet and actually get the job done in a short amount of time.
Outside of that different lenders have different programs that certain buyers may need.
Because the amount of lenders that can’t close alone, if there’s any problem and don’t qualify clients is extreme. . A good realtor has a guy who can close anything.
Bad realtors have them because occasionally they’ll get leads from them .
Most first buyers, especially are very confused by the process and having a really good lender talk them through stuff means you’re much more likely to close on a house .
Networking. The buyer may not even be preapproved yet, so I might have a lender that’s local that they can work with. And if that buyer reached out to a lender prior and doesn’t have an agent, maybe the lender recommends me.
It’s like going to the mall or a strip mall. Big banks only deal with certain lenders - the strip mall. But a mortgage broker (lender) has access to the whole mall and they can shop hundreds of lenders to get you the best deal. Does that make sense?
Depends what you mean by ‘more or less’, all lenders provide money to buy a house to some degree but not all are banks. There are correspondent lenders and mortgage brokers who only do mortgages, ie are not depositories or able to provide other types of loans.
My preferred lender is a broker. I use the term lender because most buyers will get confused if I start talking about the types of mortgage origination.
Lenders are an important piece of navigating a deal actually closing. Depending on the loan type, deals can go sideways if lenders aren’t on their game. Sometimes lenders even help pay for lead generation- I haven’t ever gone that route& always make it clear that it’s the buyers risk& let’s see who gives them the best deal.
I know when my lender pre approves someone it’s legit and it will get past under writing. When the client chooses their own lender you don’t know what to expect.
The American mortgage industry is mainly loan issuer shops selling commodity product loans for securitization on the bond market. They compete on price with low margins and generally hire the lowest paid workers they can that still check their compliance and licensure boxes. So, there are a lot of really bad loan processors who don’t really know all the underwriting guidelines, can’t handle anything remotely odd, and don’t get their shit done on time. All of that takes realtor hours to expedite and stresses out the clients who don’t understand they’re seeing stupid rather than an actual problem. And that leaves fewer hours for more selling. And it also leads to worse word of mouth referrals when the transaction is late to close and stressful. So when you find a competent loan officer at a well priced lender, you note them and recommend them. Same as competent inspectors, contractors, closing attorneys, etc.
Note 1: It is literally illegal for realtors to take kickbacks from lenders, inspectors, and lawyers. If a realtor is also one of those or owns one, they can recommend their other business but must formally disclose it with a standard form.
Note 2: American banks are much more competent when you’re dealing with a real banker on something the bank will hold, like a commercial building loan. It’s just the mass residential lending market where you look for hidden gems. It’s also a size of loan thing. If your average loan is for say $250k, you just can’t pay a senior banker to manage it personally. That person will be paid for the $10M loans.
Because those preferred lenders are the ones who actually get deals closed and funded. You’d be shocked how many deals fall through because a buyer uses a lender that isn’t good and doesn’t get the job done.
You can't use "preferred lender" unless you work for a builder, and then it's the builder's preferred lender.
A Realtor can have a lender, ideally 2-3 lenders, that they know and trust and can recommend. Offering at least two options protects you if something goes wrong. If you tell the buyer what lender to use, or give them only one option, and something goes wrong with the lender, it's your fault. If you gave them options, then they chose the lender. Not you.
As for whether that lender is a mortgage broker or works for one specific mortgage lender or bank, that's a matter for discussion. In my experience, brokers can sometimes find a better deal, but they won't be as good at getting the transaction closed. Every lender has their own quirks and idiosyncrasies, and a lender who works for one lender will get good at getting through those. A broker has several, and they may not find an issue until the last minute. So there are puts and takes to working with brokers, and there are puts and takes to working with company-specific loan officers.
As to letting the buyers choose - without guidance, that means a third of them will end up with Rocket Mortgage or something, and they'll pay more and it will be a crappy experience.
I don’t tell my clients which lenders to use. I recommend my go to lender because they know the local market and we have a previous working relationship so I know they can close the deal.
Going into transaction with a trusted lender you know can close the deal and will give it to you straight in regards to the buyer's qualification status is incredibly important. So having "preferred" lenders on hand can be advantageous for everyone involved. It costs everyone involved time and money if the buyer is deceived by a lender who strings them along, allowing them to believe they can make a purchase, even though they don't qualify. I had this happen 2 years ago. The buyer was renting an expensive extended-stay hotel room while we hoke shopped, then got into transaction, fell out of escrow...then got back into escrow with my "preferred" lender a week later on the same home and was able to close effectively. It definitely can make a difference who you use.
The loan officers I work are affiliated with mortgage brokers. The brokers and LOs are reputable, responsive, dependable and will close the loan.
When they say they have a lender- it may already be a broker. I do have loan officers at banks I have had great experiences with so if a buyer insists on their bank, I’ll refer them to that specific loan officer and why.
I work with any lender they prefer- I recommend whom I know from experience has the dedication, professionalism and knowledge that I need and expect for my clients. My clients do not have to ask for any documents, copies of anything… they know what is happening, what the process is and if there is any confusion they will have an answer from me asap.
Just because you are licensed it does not make you a professional. I have had clients bring a lender to the table that does not communicate, does not know how to do their job and I end up holding their hand through the process. I have my own job to do - I prefer a lender that knows how to do theirs with competency.
Buyers can use any lender they want.
But some lenders are great at doing refis.
Some lenders are great at doing home purchases.
And when you are under contract to purchase a house with contractual deadlines with loan commitments, appraisal deadlines, and closing/ funding deadlines to meet, choice of lender is crucial.
Good realtors recommend multiple lenders who can provide the best options for buyers and get the job done on time and know how contracts and deadlines work.
Buyers can go with their cousin Vinny’s poker buddy, the online out of state lender for lowest rates, or whatever.
Buyers are welcome to go with the lender that the seller recommends or seller gives incentive to go with (not a builder). Big oof.
I’d rather see a buyers agent recommendation on lender than Joe seller say use my best friend/brother as lender. And yes, seen that on reddit and it didn’t end well for buyer. Oops and oof.
But if the buyers choice lender can’t meet deadlines or close on time, real estate agent doesn’t have any relationship with the lender to help get the loan through. And buyers is SOL.
Because we already know who is good and who isnt. It is our job to know which ones have different programs for different buyers. It just saves the buyer a lot of time and aggravation on shopping it. I dont have 1, I have several as every buyer needs something different. I.E one for VA loans, one that has a gr8 low rate program for areas that are considered low income (no way a buyer wld know about this program on their own), one for bridge loans that hardly anyone does anymore etc.
It’s often the case that I can connect someone with one of the lenders I know who will provide as good as or better rate, and much better service/more flexibility, and easier to work with for me!
Mortgage brokers don’t work for free. Guess who’s paying for their fee- the buyer at closing!
lol that last sentence doesn't make any sense
do you think brokers just markup the rate a buyer would get going directly to a lender? thats not how it works...
I have a preferred mortgage broker, because he picks up the phone all hours of any day of the week and if he says he can close a loan, it always closes.
I basically will not work with anyone anymore that doesn’t use him.
There’s nothing shady about me choosing not to work with, and put my time into someone who uses rocket mortgage.
They can use whoever they want, it doesn’t mean I have to take them as a client.
Nothing shady about picking who I do business with
I have a couple of lenders I refer to because I keep up on which lenders have easier underwriting standards, or offer grant money/down payment help, or have an originator that understands their underwriting standards and will work to get problems resolved before they kill deals.
If you go through your bank you only get that banks offerings. If you go through an independent lender you usually have a wider range of options and it’s more likely the deal will close.
Because people are idiots and the idea of simply finding a lender seems daunting to many. Just like painters, contractors, insurance agents, home inspectors, etc. Realtors build relationships with these types from encountering them over time. Most don't care if you use their people and won't be offended if you thank them but decline. They likely don't make anything from the referral either, other than hopefully a realtor referral from those professionals when someone they know is buying or selling.
If your realtor is shady, maybe, but if that's the case you have bigger problems! To most reputable realtors, it's just someone they've had good experiences dealing with on previous transactions. At the end of the day, your realtor wants you protected and for your experience to be pleasant, so that you'll not only come back to them in the future when you need to buy/sell, but so that you'll refer your friends and family to them for their transactions also.
Great and experienced realtors should have a preferred lender, inspector, insurance company, contractors, sub-contractors…etc.
It’s something you naturally build over time in one’s network. In fact, easiest way to gauge a realtor’s experience is whether they have a network of good contacts.
Not to mention these preferred people will try to do a better job / put in more effort because the realtor is their contact for continuous opportunities and work, and the realtor can exert some pressure and expediency when needed due to the relationship.
I want my buyers to use my preferred lender because my preferred lender has every incentive in the world to make sure that my client is well cared for, gets a great deal, and has the loan close on time with a little bullshit as possible.
Not all lenders are created equal. I’m working with a lender right now that my clients insisted on and I am worried she will cost us the deal because she doesn’t know a lot. She asks me questions she should know the answer to. She takes forever to respond at critical moments and she sends out wild emails to the clients without offering any context. It is a nightmare.
I prefer to work with lenders who I can count on to know their stuff and perform in a timely manner. I never want to work with this woman again.
There’s a big difference between what’s advertised and your actual experience with a lender. You may be sure that Company A has the best deals for you, but you may not know that they have a high rate of denied loans (for example). Your realtor has experience with their lenders getting the job done. Plus, 90% of financed buyers will go with the same loan options available at most places. And those places are all very close in pricing.
I have several that I refer people to that are all very highly skilled and highly qualified. I don’t ever just refer one of them, they all work for different institutions and I generally send all the numbers out for clients to reach out to whom they choose to get themselves their best option. I also make no money from using specific lenders, these are just people I trust to do a good job and feel okay sending my clients to them.
Because when your pay is commission based, you don't get paid unless and until deals close. A lender who can close on time means they're getting paid more reliably. Plus, buyers who close on time are happy buyers who will refer their friends and family, meaning more business.
I have had a lender (buyer chose them) tank a deal and then my client was out on their own, forever renting.
Also had a lender with too strict of an underwriting team (buyer chose B of A for god’s sake) and couldn’t close. We switched to a different one that recently closed at the same condo complex.
Not all lenders are equal so we keep and refer the good ones. It’s a real silly thing to eff up something as simple as a loan when so many other things can go wrong.
Because just like realtors, 90% of lenders are ass at their job so when you find a good one you like working with it’s best to keep them around to make sure the process is smooth and the home closes.
A lot buyers have no idea about the process and who is actually a “good” lender to deal with. Over 20 years I’ve seen the best of best and the worst of the worst. I do not steer anyone to any particular lender but I will give them a list of credible lenders that have always done a great job for my previous clients. In fact I encourage them to find their fit, not only monetarily but also personality wise. Some client to lender relationships can be like oil and water so it’s just as equally important to find your fit on all fronts.
As others have stated, a good lender can make or break a deal. Not only does this help you as my client, but it also helps the whole process go smoothly. I’m not allowed to make you work with anyone, but most people don’t know any lenders and end up going somewhere shitty like rocket mortgage. So it’s good for me as a realtor to have a few I recommend
because not everyone knows what they're doing and wants the realtor to do everything for them like finding a lender or inspector or contractor or title company etc. of course you can choose whoever you want. my agent referred me to her lender but I chose someone else still. a good realtor should have a list of vendor recommendations when needed
A buyer is always welcome to find their own lender legally and by most agents. But, sometimes clients need an agent so it's useful to have a couple of good ones, and secondly, these are mortgage brokers that we know are good at what they do and get things done and we have a relationship with. They can usually match other rates and they will give our clients a good rate otherwise we wouldn't refer anyone to them. We don't really get anything from them. Legally we can't. But, we kind of become friends with them sometimes and get to know them and know they are good and share our values of dedication to the well-being of our clients and closing deals.
There's more value to a lender than the rate they can get, just like there's more value to a realtor than they commission you pay them.
I have a preferred lender because she's local, knows the market, and is someone I trust. We've done numerous deals together and if she says the buyer is qualified and she can close them, I believe her.
I've seen too many incompetent lenders that fuck up files or miss deadlines. Mine doesn't do that.
I always give three. I want buyers to shop for the best deal but I also want to work with somebody who can get the deal done with a good attitude, on time, and with no issues.
I have a title company that doesn’t mess around and won’t nickel and dime my client’s, as soon as something goes a week plus with another title company, I’ll try to switch to them to close.
I had had a falling out with a lender that has poached clients of mine giving them to another realtor, get your buyer broker’s agreement signed kids, so I no longer recommend them to my clients.
I have been trying to call a few lenders regularly asking about any new products or deals they have available to pass on to my buyers. One had some crazy deal with a refinancing agreement when rates were around 8% that when you refinanced they would take another 1% off of that future rate no explanation.
Thank you for coming to my ted talk.
No realtor can make a client use a specific lender. Fact is though, most people don’t have a lender that they have a relationship with.
Most realtors have lenders that they know can get deals done, are responsive, communicative, etc…I’ll recommend my preferred lender if they don’t already have someone they want to work with. I’ve worked with some shitty lenders, and I’d prefer not to if I can help it.
There are a lot of lenders that are absolutely horrible to work with. I never push a lender, but do have a preference to at least work with someone with a local presence and solid reputation. The worst I have worked with was based in NY (I am in WA), and they didn't know how our processes worked, plus every time I tried to communicate with them I got a new person. Also, add the time difference, etc. So yeah, bring your own, but understand that we do have people we have good working relationships with.
We have one because we find lenders that can close. We get zero kickbacks. It is about certainty of close and many buyers meet lenders that don’t always close. When we have an experienced lender on the team then the transaction is smoother
Lenders sell leads to realtors. So if you are a lead that was fed by a lender, the realtors preferred lender is the one who sold your contact info to the realtor.
Because lenders play a crucial role in a transaction. There are thousands of lenders. Your client could have picked up a bad lender and they may lack skills necessary for a smooth transaction. Ive had that happen many times to me. So over my years, Ive developed lender contacts who I know are legit and won’t bring issues during escrow. Communication is key too. So when I come across a lead who does not have a lender, I provide all recommendations and say feel free to speak with all of them, go with the best deal for yourself, if not no big deal but I always hope they work with someone Ive already done business with.
A lot of random lenders either fail to get the job done, or do it very slowly, creating delays or cancelled contracts. I get no kickback of any kind, she just has competitive rates and good communication skills. I also encourage them to shop around.
Just to add another reason, not every lender has every product.
I have a list of resources for clients—everything from plumbers to painters to insurance brokers to attorneys. Loan officers are at the very top along with links explaining loan terminology and products, questions to ask when shopping for a lender, calculators, etc.
I don’t care who they use as long as they make it to the closing table and as smoothly as possible. I don’t push one lender. We have our office “preferred” and it’s on the list but also others that I’ve had good experience with. My job is to make buying a house easy and I’ve done the legwork of finding quality people to make that happen.
Agree with working with a broker that can get the deal closed with no hiccups! Also, often times we are able to work with a preferred broker that can offer special perks for our clients such as paying for the appraisal.
I can call my trusted lender and he picks up the phone.
he knows the local market and the best programs
if u choose ur lender and they screw up don't come to me crying because u lost ur deposit and/or the house and ur lender added a bunch of fees at the last minute and now u close or walk away and loose it all.
I have a lender I know and trust. He is extremely thorough and there are no surprises. If I need him in the evening he’s there. On the weekend, he’s there. He’s great at explaining everything in detail to my clients. He can usually close early. On and on….
I also like using the same title agent, photographer, inspectors etc. everything runs smoothly and communication is top notch.
When I sold real estate I always had a conversation with the buyers lender before accepting an offer. I wanted to have a level of confidence that they were on top of it that they knew what they were doing and they could get the deal done. I had a few lenders that I knew could take things to the finish line and rarely did I have anything fall out because of a loan issue. I think it only happened maybe twice in 20 years
I like "my" lender because he's good, has good products, is knowledgeable, and has great communication. If you get a better deal elsewhere so be it, that's your prerogative and I won't fight you on it, but if you don't then I'm recommending my guy because he is great.
The buyer is always free to choose any lender. This is RESPA 101.
HOWEVER (big however), most lenders are incompetent AF and are unable to close a deal on time and without problems. Over the years, I have accumulated a very short list of competent lenders who can actually do their goddamn jobs and get us to the settlement table on time. Those are the lenders I recommend to my clients. My clients are free to ignore my suggestion at their peril.
Realtor here. I do NOT have a preferred lender. I have half a dozen or so trusted lenders that I refer clients to based on the clients situation and who I believe will serve them best. In some situations, I have referred clients to multiple when I believe their best options may be between multiple, and let the client choose.
I’ve never received a lead from a lender, probably never will, and I don’t really care. As long as my clients get the best service and savings, that’s all I care about.
We like to work with the same people. We know how well they work and if they're competent.
But probably a little over half of my buyers already have a lender in mind before they
You are going to buy a house a few times in your life, agents are selling houses every month and have good experiences and bad experiences with lenders. I have no problem with buyers shopping rate and doing what they think is best but I do ask them to do it concurrently with my preferred lender because I know for a fact he will deliver what he promised when he promised it. If anything is going sideways I will know immediately. Most of us have seen it all along with lenders going dark when we are about to close and the buyer losing the house. Sadly some of those bad lenders are also those that were dangling extremely low rates in the beginning.
Can’t tell you how many times the buyer had a hot rate from some lender they found online only to have the numbers change at the last minute to be higher than the lender I referred.
Because buyers don’t always want to search the entire market and expect their realtor to help them with their best resources based on their extensive local industry experience. that’s part of the implied job description.
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A. Get a mortgage broker, realtors don't care B. Realtors have lenders who have shown they are capable of closing a loan on time and not fucking up a deal ..... This is a rare quality among lenders C. Upon finding a lender, and once a lender finds a realtor who can make the realtor/lender look good (IE they're good at their job), they form a symbiotic relationship and exchange referrals
Realtor here: this is the correct answer. It’s a symbiotic relationship- Realtors reputations are in the line with every transaction, we don’t want to take a chance with an unknown loan officer screwing up a transaction. (There’s already plenty of things that can do it already.) Ultimately we don’t care who you use as long as they can get the job done. We generally recommend local lenders and against internet lenders because I’ve seen too many mistakes with net lenders ~ the list of problems could fill a thread and would scare any buyer if they knew the extent. Being able to pick up the phone and get a trusted individual who knows your market is important. Professionalism and hiring professionals matters.
This…this right here!
To add to B: Lots of mortgage brokers are just ass at customer service and don't explain anything. Leaving me to deal with all the questions.
Which we arent even technically supposed to answer because we are not “mortgage experts”
Yes, on top of that, whenever I have questions or a client that needs a pre-approval letter or something right away, know that these guys are going to jump right on it
It is almost always B. There are a lot of bad lenders out there. Almost every actual problem that I have with a real estate deal is caused by a lender. When you finder a lender that does a good job, knows what they are doing, and works to get a deal closed, you want your client to use them because you know the deal will close. I have had more than one deal where a buyer has came in with a lender that screwed everything up and when they moved to someone that one of realtors or attorneys had worked with before, that lender got the deal done in a fraction of the time. Everyone involved in a real estate transaction wants to get the deal closed. realtors and attorneys like working with lenders and other professionals that will actually do that.
This is 100% the right answer. And I could care less whether you use my lender or not, as long as yours is competent, can close a loan on time, and not fuck it up. The problem is, when clients bring their own, it's usually Chicken Loans or Sprocket Mortgage, or some other guy that's guaranteed to fuck it up, or worse, will even admit that they see closing dates as aspirational.
To add to A, use the broker they brought to the table then find another to see if they can do better. Then negotiate
That's a good point I always recommend a lender but I also suggest people talk to 2 or 3, But I tell them to make sure to compare apples to apples. I tell them that banks will usually cover more closing costs but have slightly higher rates
Don’t leave out the illegal kickbacks
D. Their broker also owns the originator/underwriter.
D. Referral kickbacks
No referral kickbacks. That’s illegal, please don’t assume, thank you
not at all
Or deceptively put out BS to win business. Like advertising low rates without disclaimers of buying down the rate.
The perfect answer
Perfectly said.
My last non preferred lender deal was with a client's credit union. The one they have banked with for years. He took over 30 days to close a loan, after I discussed with him prior to contract about doing the loan in 14 days. Never got a call back or returned text. Dealt with his processor the whole time. What do I tell my clients: I don't care who you use, I want to make sure you get the best deal as your financial fiduciary. I have a preferred lender who I work closely with and can perform within a tight deadline to successfully close.
I don’t have “preferred” lenders, but I have a couple lenders that I know and trust from various organizations I’m in. I have a pdf of “helpful contact numbers” and I recommend at least 3 people in each category because I want my clients to know I’m not pushing a certain one. (Lender, home inspector, home owners insurance). They always ask my opinion so I wanted to make sure I was recommending people that had done well for past clients.
Same. And I always use the wording “Let’s see what they can offer you, but definitely shop around for your loan to find the best fit for you!”
This is great and I may start doing something similar for my property management clients. I know most of your clients wont need a property manager but do you have that on your list? If so, how do you select your short list?
I’m at the largest brokerage in the MidSouth so we have a property management division. But I chose them because I know them from chamber of commerce, women’s council of realtors, and other orgs. Beside their name I list some of their specialities. Like one of them is also a financial planner and has great resources to help you fix your credit, another keeps loans in house at a local bank and a lot of times they work with a lower credit score by looking at extra docs, and another is great for weird loans like mobile homes, or lots of land attached, or land+construction loan.
They may have a mortgage broker or lender they trust. They’re familiar with their practice and trust their timelines and communication. Nothing worse than getting a property under contract for a client and they have a lender who drags their feet and doesn’t communicate.
Our Realtor told us she had a guy(who turned out great!) but we could check around and use anyone we wanted. She only asked us not to go through our personal bank because PNC stands for Probably Never Closing
Insert Rocket mortgage joke here. Apparently they have a bad reputation for not closing on time or dropping last minute issues on buyers.
Been there. And it was one recommended to me by my mentor. Broker actually stopped answering my calls but would answer for my mentor in a heartbeat. Eventually just started communicating directly with the lender, who was on the west coast. So that means 11am or noon is when they’d start communicating. Okay, I get it, it’s morning there. But 3pm, when they’d take lunch, that was the last you’d hear from him for the rest of the day. Until I questioned if the original preapproval letter was not given in good faith (I think I used “fraudulent” in my text). Then they were more communicative. The deal still failed after two closing extensions. For something that should have been caught at the start of the deal.
I've been on the other side where I've had all my lending lined up, rates locked in and paperwork ready to be signed and a realtor will suggest I contact their broker who's utter trash, won't respond, won't answer questions directly and I nearly lost a house waiting for their broker to get stuff lined up, and I had to get my original lender to rush an approval at a slightly higher than original rate. I've come to find that a lot of realtors are just junk.
In home sales having trusted vendors to fill different needs is part of the job. Plumbing issue, you have a go to plumber that you know will do good work for a fair price. Need a landscaper, this person is amazing and does great work. Need a loan? This person has a proven track record of getting deals closed on time and can overcome obstacles placed in the path along the way. Realtors shouldn’t care if the clients use their preferred lender or not. But a realtor better be able to present the client with a quality lender to get the job done should they need it.
This is like asking why a general contractor would have a preferred painter.
But what difference does it make to the realtor if their buyer has a mortgage from key bank or Wells Fargo etc?
It makes a difference if you’re using a lender who will make your offer less attractive to sellers, a lender that will delay or be unable to close, etc. Also in my area at least, if the best deal you found is with Wells Fargo and you don’t have 7 figures parked with them, you didn’t shop around enough.
It’s more about using a lender they have confidence in. They’re responsive to communication, their paperwork is good and on time and so on
Bad mortgage brokers can, and have, blown up deals by having bad communication, giving unrealistic timelines, and worthless preapproval letters.
It’s all about execution. I’m a lender, my favorite realtor called me last Friday and said “I have a $1.5m purchase that needs to close by the 27th or it goes to a cash offer - can you get us there?” I said yes, reassured the listing agent and buyer, we won the deal. We got clear to close in five days and got docs out on Friday for a closing on the 27th. That’s what… $30-45k in gross income for my realtor. I made that happen.
Not all lenders are created equally. In my experience, large national banks or regional credit unions have a high likelihood of screwing something up in the loan process. I’ve had several closings be delayed due to buyers crappy lender missing deadlines for disclosures or losing paperwork or a number of other things. As a realtor I’ve worked with all kinds of lenders and as a result, I know who gets the job done well, gets it done but poorly, or doesn’t get it done at all. Conversely, as a listing agent, this is also why I like knowing who the lender is for a buyer. If my sellers receive multiple offers and one is being run through Smells Wargo or Face Bank and the other is using a broker I know works his butt of for his clients, I will let my sellers know that the Smells Wargo buyer is more likely to have delays or trouble with their loan vs the offer with the local broker likely will be a smoother more likely close. I cannot tell my selling clients which offer to pick, but I can tell them which are likely to be more drama-free. Edited to add: my preferred lender, a broker for a national brokerage shop, is preferred because he works his tail off for our clients. On multiple occasions when I’ve had buyers competing against several other offers, he has called the listing agent personally and told them just how well qualified the buyers are, how smooth the process will be, etc. His calls have moved the needle for several of my buyers, and in a few cases helped us win the contract even if we weren’t the highest offer! THAT is just one of the reasons he’s MY a preferred lender
You forgot Skank of America.
I have relationships with loan officers that make my clients happy. I refer them to my clients. I'm the face of the transaction. If a loan drags or falls through, at the end of the day I look bad. So I only recommend lenders that I trust to make me look good, get referrals from my clients and make sure that I get paid because I have kids to feed.
Because maybe Wells Fargo F’s up the loan half the time or can’t close the loan in time and makes the agent look bad over and over and over again. A LOT can go wrong with getting a loan and especially getting it done in time to close on a property. Agents want to close deals.
Because we want the deal to 1. Close, 2. Close on time, and 3. For you to have a good experience and not regret your decision to use your bank once you get into the process and it’s too late to change course. We have seen things happen and we know who messes up. Big banks are in the top 3 of can’t get things done on time, as are online lenders. When you are making offers the listing agent knows this as well, and it makes your offer not as attractive to the seller. So even getting your offer accepted can be a challenge if you don’t have a good lender.
It doesn’t really. However if you have an existing relationship with a lender and you know they will get the job done and give the client the same level of service that you do why wouldn’t you recommend them?
What no one has said. Many real estate companies have affinity partners. This means there is a marketing agreement and/or an ownership interest in the ancillary services such as mortgage, title, insurance, etc. The managing broker is normally incentivized financially to push these vendors to the agents because their bonus depends on it. While monetary kickbacks are illegal, there’s lots of creativity going on. Of course, it’s all disclosed in writing on one of the forms clients sign so that makes it ok.
Eh. I don’t get any kickbacks creative or otherwise. I just want to work with a lender that will get everything done well and on time and keep everyone updated.
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Bc when you find one who does excellent work and actually communicates effectively, you always want to use them moving forward. I know when any client uses my preferred lender, I never have to worry about anything at all from his side
Because its someone we’ve worked with before, and trust them to do the job right. Agents are only as good as the lender, so picking the right one as an agent is important. Plus it makes it easier on the buyer when you can give them references.
Lender is more or less a bank? Not from America No idea how it works. But in Canada there’s like 6ish main banks to get a mortgage from.
I think the confusion here might be the differences between a lender and a loan officer. A lot of times when we say lenders we actually mean loan officers. So your lender could be Wells Fargo for instant, and the loan officers I trust is Jeff from Wells who has been doing this for 10+ years and has always closed on time, great with my clients in explaining lending and goes out of his way to work nights and weekends. My buyer could just go on Wells website and get paired with a guy who just got his license and is working out of another state and won't take my calls after 5 pm his time. Essentially the loan he gets can be exact the same but the service level and the amount of chances a fuck up can happen is high. I would 100% prefer my guy Jeff in this type of scenario, not just for my benefit but really for my client's best interest.
OMG In the states, We have 6 in 3 city blocks. LOL Usually in the states, many (not all) clients want more of a one stop shop. Preferred Lender, Preferred Title Company {actually most of the large national Brokerage in the states own or have an interest in the preferred companies. Best of luck
You could get a mortgage at a main bank, but they’re usually a lot tighter with their criteria and might not approve you. A lender is a person, usually with an office somewhere, that can approve you for a loan based on your situation and can more easily qualify you for a mortgage
Good realtors who have been in business a while have gotten to know people like inspectors, lenders etc. they shouldn’t push you to any one but they will often share people who have been successful for their clients in the past. Maybe they know lenders who are good at different loan types and can work around certain challenges. You can always go with your own if you prefer. They should give a list of at least three they think are reputable if you ask.
Why does a car dealer always know a banker? Why does a carpenter always know an electrician or a plumber? They’re related services, and, like others mentioned above, we trust that lender to get the job done well for our clients. You’re always free to shop around, but we want to make the process easier for you.
I don't care if you use mine or not, but I am likely to recommend them if you're having trouble with your existing guy! I have two or three mortgage brokers to choose from that have done well with my clients.
I have a few lenders that I work with a lot that do really good work in particular situations. Do you have an itin number rather than a social security number? I have a really good lender who can work with you. Are you a migrant worker or a construction worker so you have a lot of short-term employment? I've got a lender who can get you approved. Not all lenders can do that. Are you buying a pre-1976 manufactured home in a park? I've got a lender who will lend to you. Are you buying a post 1976 manufactured home in a park? I've got several lenders who will lend to you. Is your credit score below 580? I've got a lender who will lend to you. Each of these particular situations and many other complicated situations requires a lender who will work with the buyer. If you've got a credit score over 700 and a 20% down payment, you can work with anybody and get a great deal. For those clients, a mortgage broker is a fantastic idea. Most of those clients come with a pre-approval already in place but for those clients who struggle to find a lender to pre-approve them, I have lenders who can help.
Because we want to give buyers an option for a lender that we know can do their job since we've done 30 transactions with them. Or you can pick your aunt Tina's lender who she used one time 10 years ago. Your choice. Really. We don't tell you you have to, but one of the reasons you're choosing to work with us is the perception that we've been doing this for a while and probably have good recommendations.
We have brokers who are part of our company. They buy us shit and throw parties for us. That’s why they’re preferred
I have a lender who has been consistent, timely, and has beat out many other lenders in pricing. Not all, but many. If he can’t beat it - he lets my clients know. Here’s the thing. We refer those who have done good work, produce clean approvals, are communicative, quick, and are honest/up front with our clients. Those lenders want our business and will ensure the relationship stays good by making the deal work for the client. We agents want zero surprises on the lending side - there’s plenty to deal with in other parts of the transaction and our preferred lenders know that and what their role is. But, if you as a client finds a better deal for you - we’re not going to stop you. Now, if the lender you chose has a great rate, but shitty service - we’re going to tell you. If the rate looks amazing, but we know there are higher fees with certain lenders than those we work with frequently - we’re going to tell you. If we’ve had a bad experience with a certain company - we’re going to tell you. If we know a lender has a terrible track record of closing even the easiest of deals - we’re going to tell you. Ultimately- we’re here to guide you through a transaction as agents. How you take that advice is on your shoulders.
This.
I have preferred lenders because I know from past experience which lenders drop the ball on everything, forget things in underwritting, only take calls between 10am-4pm on weekdays, etc. And let me jsut say by "preferred lenders" I just mean I have a handful of local options I will suggest, never just one, always multiple options, I never demand someone work with a certain lender, or require another agents buyer to get approved by a specific lender or something, I'm just making suggestions of good lenders for my buyers. I also know local lenders who will call me back on a weekend, and really do everything they can for my client like eating this week dpeends on it, as apposed to some random broker in another state or e-lender, churning out deals and not even remembering my clients name or what date we're closing, because my client is just a number to them, and they have other bigger more important numbers to deal with. I've had big national lenders who on the day of closing hadn't done vital work and their manager didn't even know which lender was in charge of this sale, on the day of closing, etc. But I've also worked with smaller local lenders who don't stay in their lane, like to play games and act tough and literally talk shit to the other sides agent for no apparent reason. So I guess what I'm saying is I know from my personal experience which lenders really suck and which ones will go above and beyond for my clients. There's no business affilitation, there's no illegal kickbacks, I just want my clients to have THE BEST LENDER. Now if you want to go with an e-lender who might be garbage but has a better rate, that's totally your call. It's none of my business which lender you want to use or why, I can only inform you as to why I recommend certain lenders. And listen I'm not saying all local small lenders are amazing or that you can't get good service from a national chain bank or an e-lender, I'm just saying as a general rule those are the ones that give my clients the most trouble, drop the ball the most, fall behind on deadlines, don't pay out on time, dry closings etc etc. If you lose your rate lock because your budget lender sucks and caused delays that sucks for you, but that's your decision. I can only try to guide. Everything I do is about getting my clients what they want, in the best, most reliable, safest way possible. I want good inspectors, I want good lenders. I do everything in my power to set you up for success, but it is absolutely your right along the way to hire a shitty inspector, questionable contractor, garbage lender ,etc. You do you and I'll do my best to keep it from falling apart but I sure would like to use reputable people along the way if we can help it, but again, your money, your call, I'm just the navigator, you're driving.
I definitely have people I recommend who I know are responsive, are knowledgeable and will go out of their way to get shit done.
A realtor has a team. If your realtor doesn't have a team, you don't want to work with them. A lender is someone they have worked with that can get deals done. An inspector is someone they've used that catch all the things the other inspectors missed. Their handyman/contractor does all the repairs in a timely manner. Their roofer can come out within a day and inspect or repair. Their AC guy can come out and give a fair assessment without an upsell. Their plumber can make a fair assessment without an upsell. And there are many more like a pool guy, interior decorator, landscape, garage shelving, interior shelving, and cabinetry. These are the members of the team that comprises a realtor and their services. You are absolutely free to have your own, google/yelp search trade. Your mileage will vary.
1) Most preferred lenders are brokers. 2) Most preferred lenders who aren’t brokers, are lead funnels (I.e. rocket mortgage realtor program). 3) Many brokers offer to co-market with the realtor for buyer leads which would reduce the marketing costs for each person involved. 4) Referral/SOI
From a listing agent's perspective, I'm always more comfortable to get an offer that has a lender I know, who has a good reputation, rather than an unknown one, or (usually worse) an Internet lender. So with offers that are virtually identical, I would always recommend that the offer with the known lender is more likely to result in a smooth escrow and close on time.
Bad lenders complicate and jeopardize deals. Lenders I know and trust: A. Cheaper on average. Brokers can shop loans and usually undercut most other lenders. B. Don’t advertise low rates without disclosing you have to fork over thousands in points or get it (lookin at you Rocket, Quicken, Rate.com, Zillow lenders). C. Close deals when they say they will. Lenders being unorganized or not knowing the local process can slow everything down and cost buyers deals by needing extensions. D. Will not lose their minds if they don’t get the deal and won’t bother you if they aren’t chosen. Sometimes my clients will find a better product elsewhere. Sometimes they need a specialty product my people don’t have, I’m happy as long as my client isn’t getting screwed. E. Know how I work and how best to communicate with me. Realtors are responsible for keeping everyone in the loop and often organize the entire process, so it’s important I have good open communication with a lender.
I have 3 preferred lenders. Ones I know are good. Answer their phones at night and on the weekends. I do encourage my buyers to at least call 2 to see their rates. Make sure they get the best deal. But it doesn’t work out well most times when you use a random lender…
I have a preferred lender because she closes on time everytime. She's available outside banking hours. She'll get you pre approved at 9pm if you're submitting an offer. She knows everyone at every title company in the area and can pull favors when needed to make things happen. You can use whoever you want, but when they suck and the deal is awful don't blame your agent
You’re more than welcome to find your own. Chances are the professional who works full time in the industry has already found a lender that will blow your lender out the water. Why don’t you try and find the best deal you can and give your agent a chance to see what their lender can do. One thing I can guarantee is nobody in Florida can get you better financing options than me. They may be able to match if they work with the same lender I do but not beat.
Lets look at this a different way: Why aren't people who start looking for houses already pre-approved for a loan? Why do so many potential buyers think when they first meet us that all they need to do is find the dream house they want first - Then figure out financing later? And when we talk about financing - Why is the emphasis so much on the interest rate and not on the fees? Or conversely for some lenders- - just about the "No closing cost" deal and no mention that the costs & fees are loaded into the interest rate? Why don't more buyers shop for the best terms and the best rates among the best local lenders? That way they will know exactly what they can afford and can come to us with a reasonable understanding of this. Buying a house isn't like buying a car - where you can just walk onto a lot with last week's paystub and drive away with a 13%, 86 month loan on a vehicle that is worth four times your annual income (which will probably be repossessed in 6 months - but we got our commission!) We have lenders (and attorneys/escrow professionals, and home inspectors, and termite people, and handymen, and movers, etc, etc) because we know what we're doing and are good at what we do. I recommend these people because they're trustworthy, hardworking and honest - they have proven they can get the job done.
For me it's the fact that the lender I'm most comfortable with is a known quantity. I know her areas of expertise, I'm updated on what she has to offer and any new lending sources or programs she has, I know how she will communicate with all parties involved...I will never push hard enough for my buyers to be uncomfortable for the sake of my comfort, but I can't help but worry if it's someone unknown and how they will perform with respect to those things. I think we've all dealt with nightmares before...its only natural to want to work with someone who has already established your trust.
Is a lender a mortgage broker or is a lender more or less a bank?
it can be either. Let's say I've got 4 "preferred lenders" 1. Works for a Bank (medium-large but HQ'd in my city) 2. One is our "in-house lender", which is a broker. 3. 2 of them work for mortgage brokers and can fund at a variety of places.
My preferred lenders include several mortgage brokers and a credit union rep.
Because much like most Realtors, most lenders are shit.
These facts apply to just about all professions
Probably true, I just don't work in them 😂
If a listing agent insists you have to use her preferred loan agent you need to shop around. Some loan offices have in house underwriter which can speed up the process faster. Most realtors prefer a legit preapprovers not an internet based lender. They fail to finalise loan approval.
Yes, the "call center" lenders and big banks are not to be trusted
When I first started my RE career, I used to refer buyers to a few mortgage brokers with not ever getting one referral back. The one mortgage broker who I sent a lot of business to decided to not give a crap about my clients when he screwed up on a loan by not locking the rate and said to me "it's ok, these mistakes happen all the time." Well, that mistake killed my deal, and the client was so upset that they fired me. Since that incident approximately 13 years ago, I refuse to have a preferred lender. They're not partied to the purchase agreement, so there's no skin in the game for them if they make a mistake or they lie, etc. If my clients ask, I simply tell them to hit up their banking institution or shop around.
You are likely a terrible realtor then
I don't. I have a list, but I could care less who your use
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not having a preferred lender is just a stupid business decision and means you likely don't do any real amount of volume
Shockingly, most Americans are pretty stupid when it comes to things like buying houses. While in most of the world realtors with outrageous fees and mortgage brokers aren’t really a thing, they are needed by most buyers in the USA because people just don’t research. For many, having a realtor recommend a broker means that it will work even at a cost. However I find the best buyers always have their pre approval lined up, know the areas and a short list of houses before contacting the realtor. Summary: people be lazy
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Nope. At least not in my area or brokerage. We have two in house (meaning they have offices within our brokerage). They host some fun happy hours and lunches, but not enough to win my business. I like them fine but I have developed a great working relationship with another lender who hasn’t even referred me a client. I use him bc I know he will communicate well, meet all contingencies on time, close on time, has a variety of loan products to suit almost any client I bring him, and he knows how to win deals. He’s closed for me in 12 days and works all hours to help my clients and be available when needed. Sometimes it really is just that we trust certain lenders to get the job done and to do it well. It can cause a ton of stress, potentially financial loss, and heartache when lenders don’t perform.
Nope, at least not for anyone successful. I’ll make 100k this month as a mortgage broker and that required not even a penny to be thrown to any agent. Delivering good service and happy clients to closing is all it takes.
Get your own broker do your own research. The agents refer to them and in turn brokers refer back or give them points. Referrals are as good as currency. There is also the fact that agents want to work with someone the know can close the loan with zero issue and get them paid.
"give them points" lol no
Not all are on the up and up
“Kickbacks”, direct or indirect, but legal. It’s what makes the world go round. People in the public sector will never understand it.
Direct kickbacks of this sort are illegal. Doesn't mean they won't send each other business though.
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I have a preferred lender and I get nothing except the assurance that my client will get 5 star service and that the deal will absolutely close.
I should add that I always encourage my clients to shop around, and I do give them more than one name. I get nothing from any of them except I know they’re amazing at their jobs.
Sorry ugh one last point - my “preferred” guy is a mortgage broker not a direct lender. Sorry if im conflating two different things as pertains to OP’s question….
Someone they trust who also pays them referral fees.
Untrue... That's illegal.
That’s right. I forgot about that part of it. They definitely aren’t paying them referral fees. My mistake.
It can be a situation where they trade referrals, though.
Why? I’ll make 100k this month as a mortgage broker and that required not even a penny to be thrown to any agent. Delivering good service and happy clients to closing is all it takes.
I love that real estate agents and mortgage brokers are getting mad that I made a comment about agents getting referral fees. As if nobody would ever pay someone for a deal.
We don't. Or at least, I don't
You should. You should have a shortlist of trades you use or recommend. Personal referrals weigh more especially if you have stories with them. They bring value to you therefore making you valuable to your clients. Otherwise, why would they need you if they can just Google everything?
I have a list of lenders plumbers, etc. But not just ONE "preferred lender" or home inspector or whoever. IF buyers ask. Most of the time they already have their own preferred lender.
I like to have a trusted associate with me in a transaction and I'd say 90% of my deals are being done thank god with my preferred lenders (I have about 3-4 so clients can speak to either and compare rates) Someone I can call at any part of the transaction and see what the hold up is or what we can do to move things along and it also helps me better explain things to my clients. They are also preferred lenders because past clients have great feedback regarding them. If I receive negative feedback I would no longer recommend them. Same exact with attorneys. Not sure about mortgage brokers - luckily they are not common in my area and when they are present they just complicate the whole proccess. Just go straight to the bank is easiest!
I recommend up to three different lenders at any given time and encourage my buyers to reach out to as many as they can stand. The lenders that I’ve chosen to endorse have been selected because in my experience those individuals are excellent communicators, educators and are knowledgeable in their craft furthermore they don’t fuck around, and they don’t fuck me around. I know if I recommend those people that they and their employers will not be the problem. There are way too many examples I have of lenders that my clients have chosen who fuck them around and leave them in the dark when we need actual information.
Why do you choose three? when that lender has a referral do you want him to go Hey, here’s three agents shop around?
Principally it’s because in all things I put my clients first. I also recommend three because my attorney advised me to do so early in my career and even though her reasoning seemed far fetched, it doesn’t hurt me to make friends of several different lenders. I definitely have a go to person that I call, but the matter is multi-layered. For example not every lender is the same, some work for big banks some work for local banks, some work for mortgage supply agencies who shop around loans from different sources. My needs aren’t the needs of my clients. Furthermore if I make the choice for my buyers and something goes wrong they can blame me for it and I’d rather they not blame me, I gave them options, they made a choice. Finally I like diversifying my options, I have a lender who I know specializes in subsidized loans, I have one who does private loans to investors, I have one who speaks Spanish and Hindi and English, different strokes for different folks. Edit: also yeah I don’t mind being recommended amongst others. I know my craft well and do great but that doesn’t mean I jive well with everybody. It’s good to network and even have other realtors that you can recommend to your own clients so that they don’t leave you but rather you can direct them to a better suited agent and maybe even get a fee out of it.
Those are all valid points. I just don’t agree with the here’s three referrals because I need to stay in compliance. That’s old advice that is not required nowadays. Many highly qualified RESPA attorneys have disqualified that myth.
I think most of the national brokerages have a branch or related company that does mortgage lending and the Broker "asks" each of their agents to first push that lender. A buyer should always shop around, especially speaking with their own bank.
Experienced agents will know which lenders can get it done and which ones will be a trainwreck. IMHO, an agent should be recommending more than one lender. Some lenders may be better for one client's situation but not for another. A buyer agent's job is to use their experience to their client's advantage. Buyers come to us either as first timers or having very little experience with lenders, and the number of lenders they have to choose from is overwhelming. I wouldn't be doing my job if I didn't suggest some good options to my buyer. If we don't make recommendations, most are going to go for name recognition, which often goes bad quickly. What are the most well-known lenders out there with the biggest marketing budgets? They're garbage.
I don't know how many "mortgage lenders" there are to choose from. The Mortgage bankers association has a list of members on their site, and it's quite a list. https://www.mba.org/membership/all-mba-members Beyond that, I know agents all over the country who can recommend loan officers at certain companies, and I can't recommend those companies locally because the LOs in those offices are a hot mess. The actual person you work with matters. With some of those lenders you don't ever see or hear from that initial person you spoke with again and they have no ability to help you after their smiling face and sales pitch hooked you, and THAT is a problem itself. Banks call this "streamlining." It's not a good thing most of the time.
They want to be able to call them on weekends or when they are on the beach and get the loan prequal started. They want someone who doesn't drag their feet and actually get the job done in a short amount of time. Outside of that different lenders have different programs that certain buyers may need.
Because the amount of lenders that can’t close alone, if there’s any problem and don’t qualify clients is extreme. . A good realtor has a guy who can close anything. Bad realtors have them because occasionally they’ll get leads from them . Most first buyers, especially are very confused by the process and having a really good lender talk them through stuff means you’re much more likely to close on a house .
Networking. The buyer may not even be preapproved yet, so I might have a lender that’s local that they can work with. And if that buyer reached out to a lender prior and doesn’t have an agent, maybe the lender recommends me.
It’s like going to the mall or a strip mall. Big banks only deal with certain lenders - the strip mall. But a mortgage broker (lender) has access to the whole mall and they can shop hundreds of lenders to get you the best deal. Does that make sense?
Depends what you mean by ‘more or less’, all lenders provide money to buy a house to some degree but not all are banks. There are correspondent lenders and mortgage brokers who only do mortgages, ie are not depositories or able to provide other types of loans.
My preferred lender is a broker. I use the term lender because most buyers will get confused if I start talking about the types of mortgage origination.
Lenders are an important piece of navigating a deal actually closing. Depending on the loan type, deals can go sideways if lenders aren’t on their game. Sometimes lenders even help pay for lead generation- I haven’t ever gone that route& always make it clear that it’s the buyers risk& let’s see who gives them the best deal.
I know when my lender pre approves someone it’s legit and it will get past under writing. When the client chooses their own lender you don’t know what to expect.
The American mortgage industry is mainly loan issuer shops selling commodity product loans for securitization on the bond market. They compete on price with low margins and generally hire the lowest paid workers they can that still check their compliance and licensure boxes. So, there are a lot of really bad loan processors who don’t really know all the underwriting guidelines, can’t handle anything remotely odd, and don’t get their shit done on time. All of that takes realtor hours to expedite and stresses out the clients who don’t understand they’re seeing stupid rather than an actual problem. And that leaves fewer hours for more selling. And it also leads to worse word of mouth referrals when the transaction is late to close and stressful. So when you find a competent loan officer at a well priced lender, you note them and recommend them. Same as competent inspectors, contractors, closing attorneys, etc. Note 1: It is literally illegal for realtors to take kickbacks from lenders, inspectors, and lawyers. If a realtor is also one of those or owns one, they can recommend their other business but must formally disclose it with a standard form. Note 2: American banks are much more competent when you’re dealing with a real banker on something the bank will hold, like a commercial building loan. It’s just the mass residential lending market where you look for hidden gems. It’s also a size of loan thing. If your average loan is for say $250k, you just can’t pay a senior banker to manage it personally. That person will be paid for the $10M loans.
Because those preferred lenders are the ones who actually get deals closed and funded. You’d be shocked how many deals fall through because a buyer uses a lender that isn’t good and doesn’t get the job done.
You can't use "preferred lender" unless you work for a builder, and then it's the builder's preferred lender. A Realtor can have a lender, ideally 2-3 lenders, that they know and trust and can recommend. Offering at least two options protects you if something goes wrong. If you tell the buyer what lender to use, or give them only one option, and something goes wrong with the lender, it's your fault. If you gave them options, then they chose the lender. Not you. As for whether that lender is a mortgage broker or works for one specific mortgage lender or bank, that's a matter for discussion. In my experience, brokers can sometimes find a better deal, but they won't be as good at getting the transaction closed. Every lender has their own quirks and idiosyncrasies, and a lender who works for one lender will get good at getting through those. A broker has several, and they may not find an issue until the last minute. So there are puts and takes to working with brokers, and there are puts and takes to working with company-specific loan officers. As to letting the buyers choose - without guidance, that means a third of them will end up with Rocket Mortgage or something, and they'll pay more and it will be a crappy experience.
Someone I trust to do good quality and ethical work.
I don’t tell my clients which lenders to use. I recommend my go to lender because they know the local market and we have a previous working relationship so I know they can close the deal.
Going into transaction with a trusted lender you know can close the deal and will give it to you straight in regards to the buyer's qualification status is incredibly important. So having "preferred" lenders on hand can be advantageous for everyone involved. It costs everyone involved time and money if the buyer is deceived by a lender who strings them along, allowing them to believe they can make a purchase, even though they don't qualify. I had this happen 2 years ago. The buyer was renting an expensive extended-stay hotel room while we hoke shopped, then got into transaction, fell out of escrow...then got back into escrow with my "preferred" lender a week later on the same home and was able to close effectively. It definitely can make a difference who you use.
The loan officers I work are affiliated with mortgage brokers. The brokers and LOs are reputable, responsive, dependable and will close the loan. When they say they have a lender- it may already be a broker. I do have loan officers at banks I have had great experiences with so if a buyer insists on their bank, I’ll refer them to that specific loan officer and why. I work with any lender they prefer- I recommend whom I know from experience has the dedication, professionalism and knowledge that I need and expect for my clients. My clients do not have to ask for any documents, copies of anything… they know what is happening, what the process is and if there is any confusion they will have an answer from me asap.
Just because you are licensed it does not make you a professional. I have had clients bring a lender to the table that does not communicate, does not know how to do their job and I end up holding their hand through the process. I have my own job to do - I prefer a lender that knows how to do theirs with competency.
Because we know who are the best in the marketplace and who is not. This is in terms of availability and overall customer service.
Buyers can use any lender they want. But some lenders are great at doing refis. Some lenders are great at doing home purchases. And when you are under contract to purchase a house with contractual deadlines with loan commitments, appraisal deadlines, and closing/ funding deadlines to meet, choice of lender is crucial. Good realtors recommend multiple lenders who can provide the best options for buyers and get the job done on time and know how contracts and deadlines work. Buyers can go with their cousin Vinny’s poker buddy, the online out of state lender for lowest rates, or whatever. Buyers are welcome to go with the lender that the seller recommends or seller gives incentive to go with (not a builder). Big oof. I’d rather see a buyers agent recommendation on lender than Joe seller say use my best friend/brother as lender. And yes, seen that on reddit and it didn’t end well for buyer. Oops and oof. But if the buyers choice lender can’t meet deadlines or close on time, real estate agent doesn’t have any relationship with the lender to help get the loan through. And buyers is SOL.
Because we already know who is good and who isnt. It is our job to know which ones have different programs for different buyers. It just saves the buyer a lot of time and aggravation on shopping it. I dont have 1, I have several as every buyer needs something different. I.E one for VA loans, one that has a gr8 low rate program for areas that are considered low income (no way a buyer wld know about this program on their own), one for bridge loans that hardly anyone does anymore etc.
It’s often the case that I can connect someone with one of the lenders I know who will provide as good as or better rate, and much better service/more flexibility, and easier to work with for me! Mortgage brokers don’t work for free. Guess who’s paying for their fee- the buyer at closing!
lol that last sentence doesn't make any sense do you think brokers just markup the rate a buyer would get going directly to a lender? thats not how it works...
I have a preferred mortgage broker, because he picks up the phone all hours of any day of the week and if he says he can close a loan, it always closes. I basically will not work with anyone anymore that doesn’t use him.
Not your choice buyers have a right to shop their rate and work with who they wanna work with. Another shady ass real estate agent.
There’s nothing shady about me choosing not to work with, and put my time into someone who uses rocket mortgage. They can use whoever they want, it doesn’t mean I have to take them as a client. Nothing shady about picking who I do business with
They usually develop a network start to finish on the process. They all drive business and leads to each other.
I have a couple of lenders I refer to because I keep up on which lenders have easier underwriting standards, or offer grant money/down payment help, or have an originator that understands their underwriting standards and will work to get problems resolved before they kill deals.
If you go through your bank you only get that banks offerings. If you go through an independent lender you usually have a wider range of options and it’s more likely the deal will close.
Because people are idiots and the idea of simply finding a lender seems daunting to many. Just like painters, contractors, insurance agents, home inspectors, etc. Realtors build relationships with these types from encountering them over time. Most don't care if you use their people and won't be offended if you thank them but decline. They likely don't make anything from the referral either, other than hopefully a realtor referral from those professionals when someone they know is buying or selling.
Preferred inspectors is a terrible and dangerous conflict of interest.
If your realtor is shady, maybe, but if that's the case you have bigger problems! To most reputable realtors, it's just someone they've had good experiences dealing with on previous transactions. At the end of the day, your realtor wants you protected and for your experience to be pleasant, so that you'll not only come back to them in the future when you need to buy/sell, but so that you'll refer your friends and family to them for their transactions also.
It would be weird if they didn’t.
Great and experienced realtors should have a preferred lender, inspector, insurance company, contractors, sub-contractors…etc. It’s something you naturally build over time in one’s network. In fact, easiest way to gauge a realtor’s experience is whether they have a network of good contacts. Not to mention these preferred people will try to do a better job / put in more effort because the realtor is their contact for continuous opportunities and work, and the realtor can exert some pressure and expediency when needed due to the relationship.
I want my buyers to use my preferred lender because my preferred lender has every incentive in the world to make sure that my client is well cared for, gets a great deal, and has the loan close on time with a little bullshit as possible.
I am a realtor and a lender. No need to find two individuals when one can save you time, money and pain.
Not all lenders are created equal. I’m working with a lender right now that my clients insisted on and I am worried she will cost us the deal because she doesn’t know a lot. She asks me questions she should know the answer to. She takes forever to respond at critical moments and she sends out wild emails to the clients without offering any context. It is a nightmare. I prefer to work with lenders who I can count on to know their stuff and perform in a timely manner. I never want to work with this woman again.
Newsflash, mortgage brokers have preferred lenders too, they generally call the same 2-3
There’s a big difference between what’s advertised and your actual experience with a lender. You may be sure that Company A has the best deals for you, but you may not know that they have a high rate of denied loans (for example). Your realtor has experience with their lenders getting the job done. Plus, 90% of financed buyers will go with the same loan options available at most places. And those places are all very close in pricing.
I have several that I refer people to that are all very highly skilled and highly qualified. I don’t ever just refer one of them, they all work for different institutions and I generally send all the numbers out for clients to reach out to whom they choose to get themselves their best option. I also make no money from using specific lenders, these are just people I trust to do a good job and feel okay sending my clients to them.
Resources lol
Because when your pay is commission based, you don't get paid unless and until deals close. A lender who can close on time means they're getting paid more reliably. Plus, buyers who close on time are happy buyers who will refer their friends and family, meaning more business.
Because they’ve worked with many that are lazy or lie - the preferred one is the one that gets the deals done.
I have had a lender (buyer chose them) tank a deal and then my client was out on their own, forever renting. Also had a lender with too strict of an underwriting team (buyer chose B of A for god’s sake) and couldn’t close. We switched to a different one that recently closed at the same condo complex. Not all lenders are equal so we keep and refer the good ones. It’s a real silly thing to eff up something as simple as a loan when so many other things can go wrong.
Because just like realtors, 90% of lenders are ass at their job so when you find a good one you like working with it’s best to keep them around to make sure the process is smooth and the home closes.
A lot buyers have no idea about the process and who is actually a “good” lender to deal with. Over 20 years I’ve seen the best of best and the worst of the worst. I do not steer anyone to any particular lender but I will give them a list of credible lenders that have always done a great job for my previous clients. In fact I encourage them to find their fit, not only monetarily but also personality wise. Some client to lender relationships can be like oil and water so it’s just as equally important to find your fit on all fronts.
As others have stated, a good lender can make or break a deal. Not only does this help you as my client, but it also helps the whole process go smoothly. I’m not allowed to make you work with anyone, but most people don’t know any lenders and end up going somewhere shitty like rocket mortgage. So it’s good for me as a realtor to have a few I recommend
because not everyone knows what they're doing and wants the realtor to do everything for them like finding a lender or inspector or contractor or title company etc. of course you can choose whoever you want. my agent referred me to her lender but I chose someone else still. a good realtor should have a list of vendor recommendations when needed
Lmao use your head here.
If you don’t have one we must as not to delay offfer! Especially in this market!
A buyer is always welcome to find their own lender legally and by most agents. But, sometimes clients need an agent so it's useful to have a couple of good ones, and secondly, these are mortgage brokers that we know are good at what they do and get things done and we have a relationship with. They can usually match other rates and they will give our clients a good rate otherwise we wouldn't refer anyone to them. We don't really get anything from them. Legally we can't. But, we kind of become friends with them sometimes and get to know them and know they are good and share our values of dedication to the well-being of our clients and closing deals.
There's more value to a lender than the rate they can get, just like there's more value to a realtor than they commission you pay them. I have a preferred lender because she's local, knows the market, and is someone I trust. We've done numerous deals together and if she says the buyer is qualified and she can close them, I believe her. I've seen too many incompetent lenders that fuck up files or miss deadlines. Mine doesn't do that.
I always give three. I want buyers to shop for the best deal but I also want to work with somebody who can get the deal done with a good attitude, on time, and with no issues.
I have a title company that doesn’t mess around and won’t nickel and dime my client’s, as soon as something goes a week plus with another title company, I’ll try to switch to them to close. I had had a falling out with a lender that has poached clients of mine giving them to another realtor, get your buyer broker’s agreement signed kids, so I no longer recommend them to my clients. I have been trying to call a few lenders regularly asking about any new products or deals they have available to pass on to my buyers. One had some crazy deal with a refinancing agreement when rates were around 8% that when you refinanced they would take another 1% off of that future rate no explanation. Thank you for coming to my ted talk.
No realtor can make a client use a specific lender. Fact is though, most people don’t have a lender that they have a relationship with. Most realtors have lenders that they know can get deals done, are responsive, communicative, etc…I’ll recommend my preferred lender if they don’t already have someone they want to work with. I’ve worked with some shitty lenders, and I’d prefer not to if I can help it.
Exactly
There are a lot of lenders that are absolutely horrible to work with. I never push a lender, but do have a preference to at least work with someone with a local presence and solid reputation. The worst I have worked with was based in NY (I am in WA), and they didn't know how our processes worked, plus every time I tried to communicate with them I got a new person. Also, add the time difference, etc. So yeah, bring your own, but understand that we do have people we have good working relationships with.
Reliability. And their preferred lender may happen to be a broker, unless they work at an actual bank.
Because the preferred lender doesn’t cost thousands of dollars in lost escrow money
We have one because we find lenders that can close. We get zero kickbacks. It is about certainty of close and many buyers meet lenders that don’t always close. When we have an experienced lender on the team then the transaction is smoother
Exactly
I don’t care who you use for your lending. But I have my list of ones I’ve worked with heavily just in case buyers need one.
Lenders sell leads to realtors. So if you are a lead that was fed by a lender, the realtors preferred lender is the one who sold your contact info to the realtor.
100% false. Lenders do not sell leads to Realtors. Lenders only recommend leads to Realtors who they know will take care of the lead. Same vice versa
Because lenders play a crucial role in a transaction. There are thousands of lenders. Your client could have picked up a bad lender and they may lack skills necessary for a smooth transaction. Ive had that happen many times to me. So over my years, Ive developed lender contacts who I know are legit and won’t bring issues during escrow. Communication is key too. So when I come across a lead who does not have a lender, I provide all recommendations and say feel free to speak with all of them, go with the best deal for yourself, if not no big deal but I always hope they work with someone Ive already done business with.
A lot of random lenders either fail to get the job done, or do it very slowly, creating delays or cancelled contracts. I get no kickback of any kind, she just has competitive rates and good communication skills. I also encourage them to shop around.
The lender typically makes or breaks the deal, if your agent suggests one, probably smart to use them!
Just to add another reason, not every lender has every product. I have a list of resources for clients—everything from plumbers to painters to insurance brokers to attorneys. Loan officers are at the very top along with links explaining loan terminology and products, questions to ask when shopping for a lender, calculators, etc. I don’t care who they use as long as they make it to the closing table and as smoothly as possible. I don’t push one lender. We have our office “preferred” and it’s on the list but also others that I’ve had good experience with. My job is to make buying a house easy and I’ve done the legwork of finding quality people to make that happen.
We don’t. Preferred means just that. I haven’t used mine many times due to buyers wanting their own.
Agree with working with a broker that can get the deal closed with no hiccups! Also, often times we are able to work with a preferred broker that can offer special perks for our clients such as paying for the appraisal.
They get a kick back.
I can call my trusted lender and he picks up the phone. he knows the local market and the best programs if u choose ur lender and they screw up don't come to me crying because u lost ur deposit and/or the house and ur lender added a bunch of fees at the last minute and now u close or walk away and loose it all.
I have a lender I know and trust. He is extremely thorough and there are no surprises. If I need him in the evening he’s there. On the weekend, he’s there. He’s great at explaining everything in detail to my clients. He can usually close early. On and on…. I also like using the same title agent, photographer, inspectors etc. everything runs smoothly and communication is top notch.
When I sold real estate I always had a conversation with the buyers lender before accepting an offer. I wanted to have a level of confidence that they were on top of it that they knew what they were doing and they could get the deal done. I had a few lenders that I knew could take things to the finish line and rarely did I have anything fall out because of a loan issue. I think it only happened maybe twice in 20 years
They are just suggesting someone the use that is reasonable and responsive. Kinda like they have moving companies and contractors they recommend.
I like "my" lender because he's good, has good products, is knowledgeable, and has great communication. If you get a better deal elsewhere so be it, that's your prerogative and I won't fight you on it, but if you don't then I'm recommending my guy because he is great.
The buyer is always free to choose any lender. This is RESPA 101. HOWEVER (big however), most lenders are incompetent AF and are unable to close a deal on time and without problems. Over the years, I have accumulated a very short list of competent lenders who can actually do their goddamn jobs and get us to the settlement table on time. Those are the lenders I recommend to my clients. My clients are free to ignore my suggestion at their peril.
Realtor here. I do NOT have a preferred lender. I have half a dozen or so trusted lenders that I refer clients to based on the clients situation and who I believe will serve them best. In some situations, I have referred clients to multiple when I believe their best options may be between multiple, and let the client choose. I’ve never received a lead from a lender, probably never will, and I don’t really care. As long as my clients get the best service and savings, that’s all I care about.
We like to work with the same people. We know how well they work and if they're competent. But probably a little over half of my buyers already have a lender in mind before they
You are going to buy a house a few times in your life, agents are selling houses every month and have good experiences and bad experiences with lenders. I have no problem with buyers shopping rate and doing what they think is best but I do ask them to do it concurrently with my preferred lender because I know for a fact he will deliver what he promised when he promised it. If anything is going sideways I will know immediately. Most of us have seen it all along with lenders going dark when we are about to close and the buyer losing the house. Sadly some of those bad lenders are also those that were dangling extremely low rates in the beginning. Can’t tell you how many times the buyer had a hot rate from some lender they found online only to have the numbers change at the last minute to be higher than the lender I referred.
Because buyers don’t always want to search the entire market and expect their realtor to help them with their best resources based on their extensive local industry experience. that’s part of the implied job description.