One of the banes of local Realtors is working with a new client who won't even consider the local loan brokers recommended by the Realtor. "Got our lender," they say. "A good friend is going to make sure we get the best deal," or "I found the best deal on the Internet. Took some time, but it was there." Realtor's response? Stiffen up a bit and prepare for the worst. Then, calm down and try to talk the buyers into at least considering a local. Why? Because we've all had to work with lenders who: 1. Will not "join the team", i.e., consult with the Realtor and keep him informed on the progress of the loan. And since the buyer often doesn't know just what questoins to ask, or what instructions to give, the buyer truly is at the mercy of the advice of that loan officer. 2. Do not pay attention to detail. This is the biggest reason for last minute failures. I've worked with lenders who failed to close a loan because, (a) they did not read the contract and realize there were homeowner's dues; (b) they did not request the Fannie Mae required HOA survey; (c) they thought they could approve loans anywhere, but did not understand the anomalies of mountain properties; (d) their underwriter thought log homes were too unusual to actually loan money on. There are many other reasons, but you get the drift. 3. Do not process the loan in a timely manner. When everyone is packed and ready to move, the last thing you want to hear is that the loan is still in underwriting, or the loan officer failed to order the wire transfer of funds. Under the circumstances, the best case scenario is that we extend the contract until the lender gets their ducks in a row. The worst case scenario (for the buyer) is that it's a hot market, and the seller already has a back-up offer, and the buyer loses the deal. 4. Do not keep their promises. My book covers one such lender who promised "their friend", my buyers, to only charge half the origination fee. Whoops! At the closing table, he'd forgotten the promise and it cost my buyers an extra thousand dollars. We actually knew this a couple of days in advance, but my buyer's choice was to reject the loan and not close on the house or pay. The lender claimed he could no longer offer the incentive because "the loan terms had changed." Great friend. Usually, the reason we get stuck with a lender like this is because the buyer found they could save 1/8th of one percent on their loan. The most savings I've seen is a quarter percent. At today's rates, that translates into a savings of so little that just avoiding the hassles would be worth the difference, if any. I say "if any" because that savings usually evaporates once all the loan costs are known or because of other "unavoidable" circumstances. I could go on, but it's important to understand that we recommend local mortgage brokers because we have experience working with them. When you work with someone long enough, they develop loyalty to you, which translates to loyalty to your customers. Our lenders are competitive, honest, pay attention to detail and stand by their promises. They do not always offer the lowest rates, but they usually do. That is because rates are virtually the same from lender to lender on the same program, and thinking otherwise is the first mistake. One of the best little articles I've read on the subject is by David Reed. Writing in Realty Times, he cautions that most people, instead of comparing apples to apples, respond to the best pitch. Whether that's you or not, it's a worthwhile read. | 
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