We are big believers in using local lenders for a home purchase in Marin County, for two reasons. First, we know they meet their deadlines. Marin operates on very fast timetables, a 30 day close is standard. Second, in a multiple offer situation, it gives the buyer an edge to have a lender who the listing agent is comfortable with.
This lesson was unfortunately driven home again in two recent transactions, where lenders who were not local nearly killed the deal because they could not meet their agreed-to deadlines. In the first, we were representing the Seller. We won’t name the large, regional bank that specializes in the West (enough of a hint for you?) – this was one of their Los Angeles offices. The deal was a disaster from day one- literally every deadline was missed. They missed the loan contingency removal by an astonishing 24 days, which has to be some kind of record. We kept the deal alive because literally almost every day, there was a remarkable new story about how we were “almost there”, it just needed “one more set of eyes”, or eventually “there was just a minor discrepancy on the portfolio, so now we have to start the process over again.” In retropspect, we should have thrown them out and gotten a new lender earlier, but other details about the deal made it difficult. It did close, one month late. But the stress, lack of certainty, and constantly moving deadlines was very stressful for everyone.
In the second case, we were representing the Buyer. The lender had been recommended by our client’s financial advisor. On the day the appraisal contingency was due, the mortgage broker, from Massachusetts, told us that not only could we not lift the appraisal contingency, they would need at least a 10 day extension! Predictably, the Seller was quite perturbed. After much negotiation, begging, and pain for everyone, we obtained the extension for our client. Having learned our lesson, we advised our client to apply immediately with another lender, which they did. The original lender never did deliver. The back up lender, a local one who we know well, closed in just 21 days, and the rate was 1/8 of a point better!
Local lenders deliver because they are familiar with our deadlines, but most importantly, they know they have reputations to protect. We have a stable of outstanding lenders we use regularly, let us know when you are ready to buy and we will refer them. And they are great for refinancing as well!