Keep Your Lender within “Choking Distance!”

Lenders need to have a local reputation to protect and live up to!  If you use a distant semi-anonymous internet lender, you will just be a “number” to them, and they may treat you like one!

A seasoned agent told me years ago to make sure I always knew how to find my lender “just in case!”  She was only half joking when she advised me to keep them within “choking distance” and make sure they understood the consequences of failing to take good care of my clients.  I have always considered that to be a good rule regarding the lenders that I recommend to my buyers, but really hadn’t thought about it for the lenders that other agents used for the buyers of my listings.  Fight!

I recently had a listing sell to a buyer who insisted on using a lender from outside our area -in New York, even though the property and the buyers are right here in California .  The buyers had a previous successful experience through that lender, and wanted to use him again.  They had a substantial down payment, which was verified with a copy of a recent bank statement that they showed to us. 

The out-of-area lender consistently failed to return phone calls or emails, and I had a nagging feeling that something wasn’t quite right.  We got some vague messages about some kind of bank error that was being corrected, and the loan docs would “probably be coming tomorrow.”  The escrow was scheduled to close in 30 days, but on the 24th day, the out-of-area lender finally admitted that he was unable to do the loan.  The buyers still wanted the house, and finally agreed to work with a local reputable lender, who had to start the process all over again. 

The escrow ended up closing 12 days later than originally agreed to.  The sellers were inconvenienced by the delay after knocking themselves out to complete all the disclosures, escrow documents, and repairs required for closing quickly.  The buyers did not get the lower interest rate that had been promised by the original lender, but they realize now that it may have been fictitious along with the “banking error” that they never knew they had.

Lessons to remember :

  • Always try to work with local reputable lenders!
  • Local lenders have a reputation to live up to.
  • Local lenders need to earn the respect of buyers’ agents and to do a good job in order to stay in business.
  • Local lenders want to make a good impression on listing agents, in hopes of possible future business with them.
  • If you work with a local lender who lets you down, you can go to their office and choke them!


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