I went through about ten different titles for this blog post before I decided on the above.  Rather than try to be witty or come up with a play on words, I figured I’d just be more direct.

I’ve never been  more disgusted with the service that buyers are getting from their banks than I am in 2011.

If your bank tells you “Do the deal first, then we’ll figure out your financing,” then go to a broker, and never look back…

“Git er dun!”

You know that moronic catch-phrase?

“Get er done!”

I’m not sure how it’s spelled, but I do know that as dumb as the phrase is, the people wear t-shirts with the slogan are even dumber.

It’s not quite as bad as “Give ‘er,” but it’s close.

When it comes to mortgage pre-approvals, the phrase fits.  “Get er done.”  That’s it.  It’s that simple.  All you need to tell your bank is to GET IT DONE!

Unfortunately, most banks don’t respond to this…..request.

I’ve always maintained that you’re better off using a mortgage broker than you are using your good ‘ole neighbourhood bank.

There are pros and cons to each side, and I’m sure many of my readers would love to disagree with me.  But in my experience, and this is only my opinion– I’m not stating this as FACT, as I’ve been accused of doing by the anonymous commenters on The Grid‘s website – I find that banks are lazy, slow, disorganized, and provide terrible customer service when compared to mortgage brokers.

Let’s back up a bit.

Why are we doing a mortgage pre-approval in the first place?

Well there are two reasons, one benefiting the buyer and one benefiting the seller.

Firstly, as a buyer you want to know what you can afford.  I always tell my new buyer clients, “How are you supposed to know what to look at when you don’t know what you can afford to buy?”  It’s true.  If you’re out looking at $500,000 houses, and then you get pre-approved for $450,000, you’re going to be severely disappointed.

There are other advantages as well, such as locking in an interest rate.  Most brokers and banks will lock you in for 90-180 days, and if mortgage rates increase, you’re safe.

But the second point I want to make is that it benefits the seller if the buyer has a pre-approval, which in turn, benefits the buyer.

If you’re a buyer and you make an unconditional offer, as opposed to one that is conditional on financing, this is very beneficial to the seller.  An unconditional offer means that the seller is selling his or her home TONIGHT, with no out-clause.  If the offer is conditional, then the seller has to wait and see what happens.

As a seller, you likely put more value on that unconditional offer, and it translates into savings for the buyer.

For example, if you’re making an offer on a $399,000 house that’s been on the market for two days, and you submit an offer for $390,000 conditional on financing, the seller might say, “Why am I going to tie up my property for five business days while the buyer tries to get financing?  If I’m going to take this risk, I want full asking price.”

You see?

So it makes my blood boil when a bank tells a potential buyer, “Just make sure you put in the financing condition.”

NO.

N-O, spells: no!

A word to the banks – do your job.  Get your clients pre-approved so they don’t have to put in a financing condition, and so they don’t pay more for the property.

Last week, a buyer of mine went through this exact situation with his bank.  I had been telling him for weeks to get a pre-approval, and he said his bank kept stalling.  So I finally told him, “Look, we can’t make an offer until you get the pre-approval done (NB: we can, but I’m a full service agent and I work with my buyers at every angle to get them the best price possible), so call your bank and put some pressure on.”

He did call his bank, but the banker just said, “Put in a financing condition for five days and I’ll get er done.”

So I called my client’s banker, and reamed him out.

I asked him how old he was, how long he’d been working there, what degree(s) he had, if he had any post-grad certifications, etc., and to my amazement – he answered all my questions!

In the end, I wasn’t surprised to learn that he was 26-years-old and had been selling mortgages for two years.  My guess – he started as a teller, and worked his way up.

Regardless, he told me, “Do you have any idea how many people say they want to buy a house and never do?  How many people do pre-approvals and either don’t buy, or go elsewhere?  I’m not doing it anymore.   There’s no point.  These people can come to me when they’re READY to get the mortgage done.”

And that is exactly what I expected to hear.

This guy didn’t want to work for the business.  He wanted people to come to him when they had purchased, likely firm, and say, “Hey Bob, I’m ready!  I’ve bought, with no help from you, and now I want you to do my mortgage!”

But that’s just not good enough for me.

The lending industry is competitive, as is real estate.

If you don’t get the service you need from your Realtor, then go elsewhere.

And if your banker won’t do a mortgage pre-approval because he or she doesn’t want to “waste time” on something that might never translate into business, then find somebody who values the business, and will put in the necessary time and effort.

We’re in a very competitive real estate market, and the presence of a condition on financing can kill a potential deal for a buyer.

But the banks and some other lenders are telling buyers, “Don’t worry – everybody does it!  Just put in a five-day financing condition, and we’ll work on the numbers later on.”

That’s not the way this business works.

Any lenders with that mindset will soon be left behind.

If I were the listing agent for a property, and I had multiple offers – call it six offers – and the highest offer was conditional on financing, I would advise my seller to take the second highest offer.  No questions asked.  I’ve seen this situation play out over and over in my office in the last few months, and the result is always the same: take the firm deal, with zero risk, and sell the property tonight.

If you don’t, you run the risk of the buyer walking away, and you have to list the property all over again.  You won’t get nearly the interest the second time around, and you’ll end up with far less than that second-highest offer would have been.

You’ll never be successful in multiple offers with a financing condition, and if you’re not in multiple offers, the seller is going to want a higher price to take on the risk associated with that financing condition.

Buyers: take notice.

Get a mortgage pre-approval completed before you ever set food in a property, and if your bank tells you they can’t/won’t/shouldn’t do it, then move on.

There are plenty of reputable, hard-working lenders out there that will value your business and provide you with the service that you deserve.

Or simply take my advice and give my mortgage broker a call.

Joe Sammut
Mortgage Architects
1-888-575-4403

At the end of the day, I don’t care who my buyer-clients use for their financing, so long as I know that they’re taken care of.

One of my clients said his mortgage “specialist” took six days to get back to him.  It hampered our ability to get a deal done.

Another of my clients said that her mortgage broker was moving, and wouldn’t have Internet access for a full week!  How can you simply put a client on hold for a week?  Who doesn’t have Internet access?  Go to your office!  Go to an Internet Cafe!  GIT – ER- DONE!

A good mortgage broker should be able to do pre-approvals in 48 hours, or even overnight if you have a live deal.

I cringe when I hear that people are “meeting with their mortgage planner” next week to “go over numbers.”

That’s simply not good enough.

Next week is too late, and frankly, so is tomorrow in many cases…