There’s nothing more damaging than an unclosed transaction. The client gets hurt, we lose money and it’s just an all around shitty situation. If you’re not careful, an unclosed transaction can send you back to the 9-5 workplace, and render your client homeless.
As an Agent, all the blame seems to find its way back to us. We develop the relationship with the client, we introduce them to our title reps, loan officers and inspectors. We negotiate on their behalf, and their situation is seemingly in our hands. At least it appears that way to the client.
Truth is, the majority of the control on a transaction is out of our hands.
Yes- we show clients homes.
Yes- we get a contract on the property negotiated for them
Yes- we spend more time one on one with the client than anyone else
Yes- we introduce them to our referral partners
There are a few other details we handle as Agents but that’s about it. We don’t control the money, liens, title, income or any of that stuff. We show them a home, get a firm price on the home and facilitate the transaction while the title and mortgage companies do their work.
We have no control over whether they can get a loan or not.
We have no control over whether they have tax liens or child support
We have no control over what the client wrote off on their taxes
We have no control over the price an appraiser comes back with
Even after the client knows all of this, they still seem to hold ONLY us, the Agent, accountable when deals go south. It can be frustrating. Here we are with no control over our client or vendors, yet we are taking the fault like we did it.
So who’s fault is it when shit goes south? Let’s explore this subject a little, shall we?
Our job is to figure out a selling price on a home that includes closing costs, fees, title policy and what ever state related costs are involved. We show the client what they stand to pay/make after these fees combines with our commission.
An experienced Agent will look on the MLS and find similar properties that have recently sold and compare those sold prices to the negotiated price of the client’s home. Most of us can get within a $1,000 or so of the price. For some reason the appraiser can manage to screw that all up.
One of the main things to screw up a closing, and cause everyone in the transaction heartache and pain is the Appraiser. Why appraisers do this I’ll never know. It’s like they wake up one day and say “you know what? No one is getting a house today.”
Appraisers have no accountability. They are protected by the HVCC act and cannot be scrutinized by lenders or agents. They are basically in the witness protection program, thanks to the Feds. They can’t be fired without massive paperwork [think switching insurance carriers] they get paid up front whether they hit value or not and half of them or more couldn’t put value on a stamp, let alone a home.
Next up on the list is the Loan Officer. Truthfully the LO has the most control in the process. We all know what power and control can do to a man. The LO is the guy with all the money and the people with the money, make the calls.
The LOs job is to review the financials of the client and advise them on what they can afford according to their income, assets and debt. The LO should have all the documents in the world on the client. LOs should know EXACTLY what they client can, and can’t do, when it comes to getting money to buy a home.
LOs always try to steal control of the client. They rarely accept blame for anything, even though they are the one person who clearly sees the whole picture from front to back.
Matter of fact, how many times have you heard the LO say this?
Statement before contract “Yes, I have all the documents and tax returns. They are qualified at $400,000″
Statement right before closing “No, they didn’t tell me they wrote off $20,000 last year on sex toys…”
Why in the hell don’t loan officers read ALL of the tax return before they go dulling out pre-qual letters like they are 9th grade stolen hall passes? You can get a bogus pre-qual from a shady LO almost as quick as you can get a vicodin script from a “pain management” clinic.
They always act shocked when it happens too. I imagine them with that same goofy face Tim Duncan makes when he gets called for a foul. Even when it’s Title’s fault (we’ll get to that in a minute) they still seem to never read anything.
The LO has a copy of the taxes, a copy of the title and a copy of the appraisal. Matter of fact, they are the ONLY person who FOR SURE has all three of these things and yet somehow they never seem to read them all the way through. It’s frustrating and it’s also why it’s so hard for us to find a good one.
Next up is the title company. The title company gets the deed from the county and is supposed to make sure there are no liens, judgments or obstructions on the title of the property.
Truth is, title insurance is a scam! I’ve never heard of a single title company in my life paying a claim. They NEVER take the blame and can be the biggest pain in the butt because they control our checks and the closing.
Title companies basically charge money to do a county google search. Whoever came up with this probably had good intentions, but these days there are so many fees and taxes involved, it’s often more in title fees than lender fees. Our clients pay money for nothing basically.
When things end up on title, the title rep seems to never call. Heaven forbid your client have a name like Smith or Jones. Title will make them sign affidavits for months making you promise you didn’t commit murder, tax fraud and every other crime anyone named Smith ever committed. “Title Companies= The most expensive search engines ever.”
Last but not least, let’s talk about clients. We all know the saying “buyer are liars” but that’s not usually the case. Think about it, the clients have all these advisors they are paying. Why in the world would they go into detail and learn about their taxes and such when they pay us for that?
Most people hire a CPA to do their taxes and whatever the number is, they pay or get it back. They pay the CPA so they don’t have to learn about taxes. They pay us Agents to find and negotiate them a house or to sell theirs. They pay the LO to get them a mortgage and they pay title for…well…nevermind, you get where I’m going.
So even though we like to blame the client, it’s rarely their fault. They are at the mercy of a lot of hands. They have almost no control over anything but who they choose to give control to.
I know that us Agents mess deals up too. Ego, price war, shunning and everything else can happen between two Agents even though it’s against our code of ethics. Not to mention foundation, inspectors, roofs and other home related issues that pop up.
The bottom line, there are a lot of hands in the cookie jar when it comes to buying and selling a home. As an Agent we have the least control. This leaves us vulnerable to losing clients for things we had no idea of until it was too late.
The lesson here is to be on top of and in control of your referral partners. Have them send you a copy of the title policy and YOU make sure there are no hiccups on it. Ask the LO to make sure there are no self employment exemptions or deductions on the tax return. Show up and meet the appraiser at the home and close him. The LO can’t talk to him but we Agents can. After putting it this way, if you lose a deal maybe it’s because you, the Agent weren’t on top of everything.
As an Agent we make a lot of money. Three to six percent of the price of a home adds up quick. Don’t you think that since we get paid the most, we should be the most knowledgeable about a transaction from front to back? Maybe it’s time we be the ones to take the power back, educate ourselves about the entire process, and be the person who double checks everyone so we’re able to protect our clients and earn our commission.
We can just blame everyone else. That’s the beauty of our job!