I recently had a closing that did not close. As I looked at my client, who showed up with moving boxes, my heart sank. The problem? The property had liens, mechanics liens to be exact. Though the lender, whom shall remain nameless – play hangman _ _ U_ _R_ _ I _ _ - closed more than 15 units in this development and the Title Company would insure over the liens, they would not close. I learned a valuable lesson; a clear to close is not a guaranteed closing. Conditional closing requirements will continue to manifest until the very scheduled day.
Another important lesson is to call all preferred partners and find out what else is new. Because there will be something new and something that will impact your ability to get folks approved, and closed. The impact to the seller is just as great. Their willingness to be FLEXIBLE will be a necessity in today’s game. Perhaps a little bit of exercise, like the mortgagee clause. A little heavy lifting and it may work out in the end plus build your own strength.
Some other changes in conventional lending have been in the past two weeks, projects have to be over 50% sold for the property to qualify, no first in. There is a risk adjustment by FNMA and Freddie Mac for credit scores vs. interest rates. They now require 740 credit score. In 2007 a 620 score would be the same rate as a 740 score today.The bar has been raised 120 points. The mechanics liens, can pose problems for new construction and conversions.
My advice is, learn to cha cha, rhumba, disco, foxtrut, or get that cardboard box out to break dance, and any other of your favorites as we facilitate clients through the buying and selling process today. Facilitation will not be enough. We need to educate the client and most importantly Ourselves. WE have the tools to be prepared or rather over prepared. With DATALYNX we have access to tax records, assessed values and to the recorder of deeds office where we can find out if there are any liens. Additionally, this is the time to strengthen and build relationships with credible and reliable vendors. Create strategies to stay on top and ahead of the changes. Get your tap shoes on and be ready to use those fancy footsteps you’ve just learned and don’t follow, LEAD.
WE can Educate, Facilitate and Adjust our game plan to ensure a closing is a closing.
Tell us your challenges, and feel free to VENT!