Lender Partnerships Are Important
With federal laws changing to protect home buyers, it’s become even more important for Realtors to work closely with the lenders chosen by buyers. The good faith estimate has changed, as well as the HUD Settlement Statement. Lenders are limited to how much they can charge in “junk fees” because nothing can be added at closing to catch up to the amount of money a seller agrees to pay on behalf of the buyer. Amounts to be paid should all now be rolled into the loan origination fee and total charges should be within 10 percent of the amount given on the good faith estimate provided by the lender. If the amount exceeds 10 percent, the lender must cure the problem within 30 days.
What does this mean for the buyer, seller, and Realtor? It means that if a buyer asks for up to $5,000 in closing costs, the seller may ultimately pay only $3,500 because the lender is prevented from collecting more. The new law keeps a lender honest! However, if a seller is willing to pay for up to $5,000 then the buyer ultimately leaves $1,500 on the table that the seller won’t have to pay even though he/she has agreed to it.
To compensate for this, the buyer, Realtor and lender should work very closely together when negotiating a contract. The agent needs to know just how much the lender actually requires for closing and ask for that amount. If it’s $3,000, they can state,
“Seller shall pay $3,000 on behalf of the buyer at closing.”
Then to reap the full benefit of the $5,000 the seller may have been willing to pay, you can negotiate that amount in the cost of the house. For example, instead of paying $100,000 for the home, write the contract for $98,000. But you can only get this specific when you have a good, open communication between all parties. This also means that perhaps buyers should focus on using LOCAL lenders rather than someone one or six states over. With local lenders, you know how to reach even cell phone numbers – something hard to do at 7:00 p.m. on a Friday night for long-distance lenders.
It’s better late than never to have this type of buyer protection available to the consumer.
