A year and a half ago, when I listed my first REO, the selling banks were being less cautious about the pre-qualification letters submitted with the offers. But then too many deals fell through, a lot of time was wasted and, as property values were still declining then, money was lost when the property had to be returned to the market to find another buyer two to three months later.
Most banks then decided that they would not consider an offer unless it had a pre-approval from one of their own branches. In theory it sounds benign enough. It certainly is a way to do away with the “fluffy” pre-approvals that aren’t worth the paper they are written on. But in this market, where each foreclosure that is listed garners at least 10 offers (and in some cases 40 and 50 offers), having to pre-qualify your buyer with a different lender every time you submit an offer is ridiculous.
I have a buyer who has been looking for almost a year now. He’s getting really frustrated that not enough properties matching his criteria are showing up. And when one does, we submit an offer immediately to try and get in before the slew of offers comes in. We put together really decent offers. They have been above asking price, but not ridiculously high just to get the offer accepted. We dot all our I’s. We cross all our T’s. We fill in all our blanks. We submit copies of our earnest money and copies of our pre-approvals.
But what happens when you get really tired of having your credit pulled time and time again just to get pre-qualified by the seller’s choice of bank? Unfortunately, there’s not much that can be done. The listing agent won’t submit the offer without that new pre-qual. I am dealing with an offer we submitted yesterday on a foreclosure. I submitted a brand new DU approval with the offer from my buyer’s mortgage person. This was a DU that was pulled for this buyer, for this home, for this purchase price and still the listing agent won’t accept it. He insists that we go to his mortgage broker for a pre-qual.
It sounds to me like this is the listing agent’s requirement, not the sellers’. The reason I think this is because most sellers are having buyers prequalified by their own entity. Wells Fargo wants Wells Fargo pre-qualifications. Chase wants Chase. But with this one, I am being asked to take my buyer to a local mortgage broker, not a direct lender for their approval.
Now, I am not a mortgage broker and will never be. I prefer to let each practice his own specialty and will not try to wear two hats, with neither fitting quite right. But isn’t a DU approval just as good from one mortgage broker as from another? Maybe this is where I am wrong on this. Because I am not a mortgage broker, I may be misunderstanding the power of the DU.
What I do know is that a real estate agent can be as frustrated as her buyers. Oy vey.
Maggie Dokic, SFR is a licensed real estate broker in the state of Florida selling residential real estate in Miami, Palmetto Bay, Pinecrest, Coral Gables, Gables by the Sea, High Pines, the Redland and other select areas of SW Miami-Dade County.
Maggie has earned her SFR certification to be able to better serve the needs of her customers in today's non-traditional real estate market. SFR is a Short Sale, Foreclosure Resource Specialist. Designees have been trained to understand the highly specialized options available to Sellers facing short sales & foreclosures and Buyers looking to buy them.
For more information on our local real estate market, or to see or sell a home in Miami, Palmetto Bay, Pinecrest, Coral Gables or the Redland, visit my Miami Real Estate blog or contact me at Maggie (at) TheBlogThatAteMiami (dot) com.
The opinions expressed herein, are those of the author, and not necessarily of Keller Williams Realty.
None of this information is to be deemed legal or financial advice. Please contact your attorney or accountant for same.
