Athen Apaquette

How to Choose the Right Lending Partner

'You can't do a good deal with a bad partner."

‘You can’t do a good deal with a bad partner.”

How many times have you seen the “DFT – Deal Fall Through” because the buyer was not properly qualified?

In business, we are only as strong as our strategic partners. This is especially true for realtors who need good strategic relationships with lenders.

Here are 12 tips that will help you to successfully choose a strong lending partner

1. Know the difference between a broker and a banker. Your lending partner should never be a clerk at a bank.  In fact, a banker’s loyalty and primary responsibility is to the institution that he or she works for. Not-to-mention that their ability to access funds is limited to programs that their institution provides.

A broker is always on the lookout to “find the money” and the best rate for the buyer.  She or he has access to multiple sources of potential revenue which increases your buyer’s chances of finding a loan.

A broker also has extensive training and licensing (not all bankers do). 

The ideal partner is a broker who is also a banker. They have the flexibility of a broker, but also the financial backing of an institution.

2. Make sure that your lender isn’t a newbie.  An experienced and ethical lender is aware of all the lending options that is available to your buyer, and they are willing give the buyer this information.  An experienced lender will also qualify the buyer .5% higher than the market to ensure against any surprises or hiccups in the loan process.

 3. Look for a patient lender.  As you know, buying a home or investment property is stressful.  To help move the process along, it’s important to have a lender who will explain the process in simple terms, is patient, and clearly states the buyer’s financial options.

 4. Look for a lender who has the freedom to refer you to buyers who close.  You want a partner who is interested in putting money back in your pocket, not just lining theirs.

 5. Know the broker’s arrangement with the lender.  Sometimes a bank arranges for the broker to get a higher commission when they work together on a loan.  If this is the case, then the broker may be limited on the loan programs that they can offer to your client. In general, more loan options are better for the buyer, and better for you.

6. Make sure your lending partner sees the full financial package from the buyer before giving the pre-approval.  Some lenders will give a pre-approval over the phone without having seen any important financial documents. But this can have consequences.  What’s the difference between pre-approval and pre-qualified? 

7.  Your lender should give you a complete pre-approval package for the buyer.  It’s great to know all the numbers before going out and showing  homes.

8.  Your lender should lock-in the rates when the client is in escrow. If not, then they put the deal at risk.

9. They give you the rates in writing. 

10. A great lending partner praises you to your client.  By placing you in the best light, they help you get more referrals.

11. A great lending partner never leaves you hanging, even when they go on vacation.  Ask your lending partner who will be helping you while they’re out-of-town, and whether this person is up-to-date on the loan.

12. Your lending partner should cross qualify your accepted offers, help you sift through multiple offers on your listing, and do it without pressuring you for the business.  

These 12 tips will help you to choose the best lender and set you on the road to realtor success.

A great client is an educated client.  So please send your client’s to my article “14 questions to ask any lender.”