How Do I Find A Good Mortgage Broker?

LoveInTheHouseJuly 6, 2011

My deals keep falling through because of mortgage problems. I've been turning on my buyers to local bankers, including Farm Credit since I'm selling a small farm. I talked to these guys, asked them if they could give a loan on my house, they say yeah, tell me what my buyers will need, etc., and then in the end, they can't do it for one reason or another and then I lose the deal. I should find someone who has a number of products to sell. How can I find a good mortgage BROKER?

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I found a really good mortgage broker years ago through my real estate agent when I was buying my first house. We used him for our next house purchase too. Unfortunately when we went to buy our most recent house, he was out of the mortgage business. So, we again went with a broker recommended by our (new) real estate agent. He has been great too (although we haven't closed yet).

I know some will not agree but I believe that a good real estate agent will usually recommend someone who has come through in the past and who they have a proven track record with. So, I would check with any agents you know and maybe even people who work at settlement companies.

I think in your situation you might have better luck with a true broker (if you can find one) rather than a loan officer who is tied to a particular bank.

    Bookmark   July 7, 2011 at 8:28AM
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The agents I've spoken to turned me on to the local banks. I agree--I need a true broker and not just a loan officer. When I Googled "mortgage brokers," I also got local banks. I guess I'll dig a little more. Thanks!

    Bookmark   July 7, 2011 at 11:42PM
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Perhaps being so involved in your prospective buyers' financial arrangements is not a good thing. If they are truly qualified buyers then they will be able to do that part on their own; indeed it is test of their commitment to the deal. Your efforts to help the deals along haven't netted you a settlement check, so far. And it is possible that by making a mortgage seem easier to get than it actually turns out to be, you are wasting your time going to contract with marginally qualified buyers.

I know you are frustrated - and at risk of losing the house in NJ that you want to buy. But you can't control whether a lender is going to lend to your buyers.

Unless you are prepared to take back the mortgage yourself, your energy would be more wisely invested in preparing your house for sale, IMO.

You appear to be depending on your website as your prime point of entry to interest buyers. As you know I think you have far too many pictures. But also many of them do not show your place to its best advantage. I think a real estate agent would advise you to consider doing more decluttering and prepping and re-taking some of the pictures. (For instance, you don't need tack hanging on the dining room chairs and the saddle probably doesn't need to be there, either.) Also the kitchen, particularly the passageway to the door past the stove, looks very cramped. (And that picture also makes it seem like the floors and walls are not plumb since the door trim and cab edges aren't parallel. This could be an artifact of the picture, but if not, it's not something I'd want to point up.)

The paint around the door in red room looks like it's flaking, or maybe the plaster is failing. That should be easy to fix up.

The living room pic has a cardboard box on the rocker and what looks like an undecorated Christmas tree on the table.

When taking the pics, pull the venetian blinds up and out of sight as they make the windows look like jails with bars on the windows.

Some of the pics are very dark, a few are wildly overexposed.

The dining room ceiling looks oddly two-toned. Is that soot from the stove, or smoke? Perhaps repainting might be in order.

You might also consider whether having only one tiny bathroom downstairs is a problem. Can you convert the smaller bedroom upstairs to a bath? (I have no idea where it falls within the house, so it may not be possible.)

None of these things is a deal breaker (unless someone wanted the extra bathroom and it was completely impossible), but they do make the overall impression less appealing than it might be.

I do know you have had some traffic and gone to contract (twice!) only to have the deals fall apart at the mortgage stage. But I think you may be losing other buyers (that you never know about) because of how the house "shows" on the website. You really can't do much about the mortgage-ability of your buyers - they'll either be able to get one, or not. But you can do something about how the house looks, and how it's displayed on your website. And collectively, people on this forum can help you figure how to do that better. You might consider starting a thread to ellicit suggestions on the pictures themselves.

I will add one thing: You call your farm the Smokin' Bandit's Ranch. I don't know whether you have smokers in your household but if not, then considering the name of the farm I suggest you mention that fact on your website. I wouldn't consider a house that had any trace of tobacco smoke -particularly one with pine-paneled walls which retain the smell forever.

I think that either on this forum or on the kitchen or home dec forum there was lengthy discussion about how best to take interior pictures. That might be helpful.

I do wish you good luck. And I hope you will take my comments as well-meant, even if you don't find them particularly useful.


    Bookmark   July 9, 2011 at 1:05AM
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Liriodendron, it's true, I get a lot of action. But you're right--I could be losing even more buyers that I don't know about if they don't like my website. I'll take another look at the pictures. Everything is in pristine condition. And I had to crack up over what you thought about the name of my farm, Smokin' Bandits Ranch. It's a play on words from the movie, "Smokey and the Bandit," as well as in barrel racing, we often say we are going to smoke the competition. Nothing to do with smoking, lol. As far as one bathroom, that's its weakness but I priced it for one bathroom. I also got an estimate from a local home improvement guy for a second one if someone wants that. They can choose. Anyway, "selling the house" hasn't been the problem as you know. It's the people getting mortgages. I'm a FSBO so I do the agent's job. If they come to me and they've already found a banker, that's great. But I have to be ready to direct them in case they need help. Thanks for all your ideas!

    Bookmark   July 10, 2011 at 11:34PM
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You are correct in assuming that because you are FSBO that you should perform some of the tasks of a listing agent. But I don't think finding financing is the role of the seller's agent (aka, you). The seller's agent is there to get the best deal on behalf of the seller and part of that is to make sure the buyers are well-qualified so as not to waste the seller's precious window of opportunity in the selling season.

When I have been the seller in a FSBO deal, I have to work hard to avoid being too helpful to the buyers in order to keep the deal moving along smartly. That way the roles and responsibilities stay clear. I am by nature a problem solver, so this is hard. But I found that whenever I tried to help the buyers cope, that things got sticky in one way or the other. Coming up with the money within the agreed upon time limits is their job, not yours. If they haven't moxie enough to figure out how to do that part and if any bumps arise later (and they often do) the deal will unravel because they will turn back to you to get their problem solved.

My advice is to keep them on their toes by leaving all the money part to them; make sure they understand that in offering to buy they are promising to complete the deal. That's what the P&S document is - a contract. (Don't I recall you trying to help the last propective purchaser's deal with the buyers of their their house's issues? Wasn't there some sum of money being talked about as an allowance for some third party's flooding worries? Who was making the allowance? In the end that prospect turned out not to have enough money to close, anyway?)

That's what I mean about not getting too involved. It's fine to find out from multiple bankers what kinds of mortgage issues buyers may face. But the only proper use of that info is to tell buyers this is what is necessary, so please provide assurances that you can meet those conditions before I accept your offer. And then the contract should require them to provide documentation within X number of days that what they said about their ability to pay is accurate or the contract is voidable by you. The documentation isn't a pre-qual letter, BTW. It's a statement from their bank that they have sufficient downpayment funds on deposit, have an actual mortgage app in the works and extremely relistic plans for purchasing (reserve funds) if you are willing to have a selling contingency in your deal. It's not rude to ask for these things in a business deal. And if you had an agent, they would be asking for this stuff from either the buyer, or telling the buyers' agent to get them.

A buyer who is moving to the area, un-employed (not retired) or self-employed or who has to sell their house first is shifting their risk to you if you take that contract. In real world terms, risk = money. So the selling price/terms should reflect that risk.

The problem with FSBOs is that everybody thinks that because there is no RE commission that the deal should be better - for them. In truth, FSBO buyers have to do the buyers' agent job (write contract, negotiate, figure out how to come up with $$, get inspections underway, etc.); and the seller does the sellers' agent's job: protect the seller and get the most advantageous deal possible. So everybody is going to earn their share of whatever commission is "saved."

The main reason to do FSBO, at least in my opinion, is not the financial aspect, but the ability to avoid the fuss and hassles often generated by the extra layers of parties in a deal and to have a more personal stake in the transaction. Otherwise, it's best to leave it to an experienced professional.


    Bookmark   July 11, 2011 at 2:12AM
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I disagree. And the extra twenty-two thousand dollars in my pocket from my last FSBO was sweet. I can't believe you don't care about that. This is my fifth FSBO. I do it mainly for the money. The second reason I do it is because no one can do a job as good as I do when I sell my houses.

As far as people thinking they should get a better deal with a FSBO--they often DO get a better deal--I sold this house for the full asking price the first time. The buyer told me she looked at "fifty other places and I'm giving you the full price because I know it's worth it." I sold it for three thousand dollars below the asking price the second time. I sold another one of my houses for the full asking price and almost had a bidding war. The others were all pretty close. I was happy and I know my buyers were happy because I'm still friends with all of them.

My last deal did not fall apart because I was involved. I was almost able to salvage it because I was involved. Why shouldn't I help a buyer if I can, whether it's to offer a little more money off to help him salvage HIS deal, or to direct him to mortgages? My buyers don't have to write up contracts unless they want to. I am prepared for all that. We use lawyers for contracts, etc. I also got all the documentation that you said an agent could have done. The deal did not fall apart because of lack of any sort of documentation. Everything was completed including my buyer's buyer's mortgage commitment. My buyer's lawyer discovered my buyer's property was in a newly designated flood zone. Having an agent would not have prevented that.

The only reason I'm having any difficulties selling this house is not because I'm a FSBO--it's because of the economy.

Now with that being said, I've recently listed it with a flat fee brokerage and I'm on the MLS. Realtors have their place. Some people need them because they are inexperienced or uninterested or just don't have the time. In my case, I realize there are less buyers out there and since this is a unique property, my pool of buyers is even smaller. I know I'll sell it again sooner or later, but to speed things up, I need to access a larger number of able buyers. So I'm on the MLS now. It should be interesting to see who sells it--me or the agents (I'm offering them the same commission they'd get from any other listed property).

    Bookmark   July 12, 2011 at 11:30PM
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I'd suggest talking to friends to find out who they used. I'm a realtor, and I generally refer my clients to a very trusted broker. But if you are just shopping around, you may find a very good referral from a friend or family member.

    Bookmark   August 11, 2011 at 2:49AM
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Thank you Marcus. I ended up finding a few because I asked an agent friend and also the lawyer I've been using for all these contracts--"Which banks are following through?" I gave my newest prospects this info. We'll see what happens.

    Bookmark   August 11, 2011 at 11:52PM
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