Lenders, Realtors, title agents, and consumers all want the deal to close. Keeping everyone in the loop means a smoother and faster transaction. For the real estate professionals involved, it may often feel like you’re herding cats or conducting a symphony of second-grade tuba players. The chaos of coordinating all the people and papers needed to close quickly while complying with regulations and best practices can start to sound like a cacophony.
Effective communication between all parties is imperative, but how do you make sure everyone else knows what the next steps are? Here’s what other professionals expect from you and how you can free up time by reducing time-consuming tasks.
Lender requests to real estate agents
Realtors and real estate agents are typically the first professionals contacted by consumers who are ready to start the home search process. This means that you have the ability to set the tone with buyers for the entire transaction.
In order to make communication go smoothly be sure to do the following:
- Encourage buyers to get pre-approved as soon as possible.
- Instruct buyers to provide all documents for underwriting quickly and early in the process.
- Send the purchase agreement to the lender as soon as possible and be sure to alert the title agent and buyer as well so everyone is aware of what next steps are needed.
- Inform the lender which title company is being used.
- Alert lenders when there are any changes to the contract or closing date.
- Ensure realistic time frames are in the contract and review with the buyer.
- Order inspections and title work sooner than later.
- When listing a condo, be sure to complete lender’s condo questionnaire at that time.
- If there are any specific property issues that affect timing, share them with the lender so they can set proper expectations for meeting special conditions.
Real estate agents should also be sure to set boundaries and expectations with their clients. Let buyers and sellers know when are appropriate times to reach out with questions and concerns. Be sure to walk buyers through the next steps on their due diligence list. When lenders are missing information, be sure to gently remind buyers to follow up.
Real estate agent needs from lenders
Real estate agents have a huge influence on which lender consumers choose. In fact, one survey from Campbell Communications and Inside Mortgage Finance Publications showed that real estate agents swayed 45% of a buyer’s decision regarding their financing.
Agents want a reliable lender who will approve loans quickly and reliably. One study by Inman showed that agents preferred working with mortgage brokers over banks and non-banks. Real estate agents view mortgage brokers as being more flexible and personal, so they’re able to find the right fit for each client.
Regardless of what category you fall into, here are some things to keep in mind when communicating with the real estate agents you work with:
- Communicate often.
- Return calls and emails in a timely fashion.
- Let the agent know when additional information is needed or if the buyer isn’t cooperating.
- Educate the buyer about the process. Create clear outlines of action items for them to execute.
- Be realistic about financing deadlines and closing dates.
- Be available. Closing on time may mean that real estate agents need to contact you during the evenings and weekends.
- Get the appraisal completed prior to loan approval.
- Review your appraisal policy with the agent and buyer
Lenders should make sure they are aligned and communicating properly with real estate agents to get as much of their referral business as possible. Improving communications with real estate agents will mean more business and smoother transactions.
Title company requests to real estate agents
In order to prevent any snags with transferring the title and causing consumer headaches down the road, real estate agents should make sure that the following is done:
- Legal names of the buyer and seller are printed on the contract. No nicknames!
- Confirm marital status of both buyer and seller.
- Ask the buyer how they plan to take title and indicate it on the contract.
- Fill out a title order form as soon as possible.
- Ask the seller for their back title.
- Let the title company know if any buyers or sellers won’t be at the closing.
- Avoid closing on the last day of the month. This will result in better service and less stress.
The buyer is required to have a title commitment 15 days before closing, so be sure to order title work as soon as possible. Communicate with sellers about HELOCs and second mortgages requiring pay off at closing. Careful coordination and preparation with the buyers and sellers will help avoid any slowdowns to clear the title. Title companies can help prepare a net seller proceeds calculation to review with your client so there are no surprises.
Lenders communication concerns with title agents
According to the Dodd-Frank Act and CFPB rules, a lender may be held directly liable for the acts of the closer and other third parties it hires should they violate the law. Title and escrow companies are responsible for safeguarding massive amounts of money. Once a lender has carefully vetted and approved a title company, agents should continue to assure the lender of their competency through clear communication via secure lines.
Establish secure lines of communication
Due to the increased risk of wire fraud, many lenders expect title agents to have private domain email addresses. This helps address two of their most important concerns in working with a title company:
- That all Non-Public Personal Information (NPI) is secure
- Funds are handled appropriately and safely
Title companies should review their internal processes and written policies to confirm that they reflect American Land Title Best Practices, your underwriters’ best practices, and lender expectations.
Seamless transfer of data
Standardization of data formatting and nomenclature will be an important part of improving communications between lenders, title agents, and real estate agents in the future. Lenders want to work with title and settlement agents who provide accurate fees for the preparation of both the Loan Estimate and Closing Disclosure.
According to a survey from Mortgage MetaSource, Lenders still struggle with complying to TRID rules on quality control related specifically to miscalculations of costs on the Closing Disclosure and settlement service provider information.
In order to improve data transfer, title agents should better understand how UCD regulations affect lenders and begin implementing MISMO standardizations, especially as we move to more digital closings.
Having these standards in place will reduce the need to make adjustments on the CD or HUD-1, reprint, and deliver the corrected document at signing. It will also eliminate confusion over which parties are responsible for amending and delivering lender-prepared documents.
Title Support Services for settlement agents
Imagine never opening a file again after closing to follow up with the lender or county clerk to get a wayward mortgage satisfaction properly recorded. Imagine no longer setting aside time out of your busy day to work around a municipality’s hours to get information on unpaid utility bills, open code violations, or open permit information.
There are some communication tasks that title agents and processors are saddled with that are out of your control but absolutely necessary in order to write policies for marketable title. Imagine instead of having to juggle all those things on your own, you have an entire support team to help you close on time and focus on the things that matter most to real estate agents, lenders, and homebuyers and sellers.
PropLogix can help with release tracking, municipal lien searches, association estoppel research, survey coordination, title searches, and more! Learn more about our services and schedule a call with one of business development managers today.