Last week, I almost went to jail. Ok, that might be an exaggeration—but I was physically removed from a mortgage lender’s office.
This was after months of going back and forth with the lender, who was probably either 1) wildly preoccupied, understaffed, and prone to mistakes or 2) in the midst of screwing over a couple of first-time homebuyers.
Either way, it’s a deal that almost cost me my sanity. Even my dog starts to bark whenever I bring up this transaction in conversation. Now that the deal is closed, I’m sharing what went wrong and how agents can avoid being caught in deals like this.
Consider this your warning.
Red Flag After Red Flag
My team always aims to work with a lender from our preferred vendor list—because there is nothing worse than watching a deal fall apart because of an unprofessional lender. Typically, it works out for us. But for this deal, I was representing the seller, and the buyers opted to use a lender we’ve never worked with before.
To give you some context, we had two listings go live on the same day, in the same neighborhood.
Both properties went under contract right away. But here’s the big difference: The listing we used our preferred lender on closed two months ago. The other one closed five days ago—and only after I intervened several times.
Long story short, the red flags started coming in immediately. And I knew from the start that something wasn’t right.
First, it was the buyer’s credit changed. Then, they didn’t have the right documents. Then they were short money. In the text thread between myself, the buyer’s agent and the lender, there were constant messages like this:
As we got into the first week of August, my sellers started to get a bit anxious—after all, they had another property they were closing on this week in another state. I knew things didn’t seem right, so I took some time to compare the title bill he sent with another title bill. And, no surprise, I found a pretty big mistake—one that would get the buyers what they needed so they could close.
Of course, even after finding the lender’s “typo,” getting the clear to close wasn’t easy. For another week, we kept getting the run-around. So I went into his office and well…I won’t go into all the details. Just know I was physically removed.
A week later, we finally got the clear to close and sealed the deal a few days after that. I’m thrilled for my sellers and for the buyers—but I’ll never work with that lender again.
Was this lender trying to scam the buyers? Maybe. Maybe not.
The fact is, the market is in such a complex state right now. We went from the roller coaster of 2020 and 2021, when mortgage lenders were not only helping clients secure new mortgage loans but also had an influx of refinances, as existing homeowners secured low rates. Fast forward to today, where we’re seeing a historically low volume of transactions, and refis have all but disappeared.
Because we have gone from one extreme to another, industry professionals have had to adjust. There are mortgage lenders who have had to lay off staff, whether that’s underwriters, admin, or other members of the team. So, even though we’re down transactionally, there are plenty of professionals who are finding it a challenge to keep up with their workload, because they no longer have the support of a full staff.
4 Tips for Real Estate Agents in Today’s Market
All this is to say that real estate agents need to be aware that there are deals falling apart, whether it’s because of fraudulent lenders, honest mistakes, or something in between. So, here are four tips to help ensure that every deal you work on closes.
1. Be Aware
Not every professional in the industry has their clients’ best interests in mind. Be aware of the current market conditions and frauds and scams that may be taking place in your market.
2. Trust Your Instincts
If something seems off, it probably is. Double-check documents received from the other professionals working on the deal to ensure no mistakes were made. And if nothing jumps out to you from the paperwork alone, ask for proof of funds missing, credit scores, etc.
3. Build a Network of Trusted Vendors
Having a complete network of trusted vendors enables you to give your clients options when making a transaction. While they won’t always go with one of your vetted professionals, many will look to you for advice on who to work with.
4. Don’t Be Lazy
It’s easy to sit back and say, “Oh, that’s the lender’s job.” But as real estate professionals, it’s up to us to hold deals together—even if that means double-checking the work of another industry professional, following up on text every five minutes, or showing up at a vendor’s office.
With this deal, because I took some extra time to look for a solution, I uncovered a discrepancy. One that would have hurt my sellers, the buyers, and everyone else involved in the transaction.