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Foreclosures: Using the Preferred Lender?

This is for all the buyers out there that have submitted a contract on a foreclosed property and those of you looking to purchase one.  I would say about 95% of the time, the seller(bank) wants any prospective buyer to get pre-approved through one of their preferred lenders.  Most of the sellers(banks) won’t even look at your contract without the pre-approval letter from that specific lender.  This has caused much heartache for buyers that are set on using one of their own lenders.

Here’s the deal, you can have your way!  Just cooperate with the seller(bank) and get that pre-approval letter with their preferred lender.  It does not hurt you in any way.  It’s just one of the bank’s way to protect themselves.  It reassures them that you can definitely afford the property.  Once you the bank has signed off and ratified the contract, you can go shop lenders and use whoever you want.  In fact, I HIGHLY suggest using a lender you are comfortable with or that your real estate agent has recommended.  Don’t let a simple 20 minute phone call to their lender make a deal go sour by being stubborn.

I’m just going to flat out say not to use the preferred lender that the bank has chosen.  Here’s why…. The bank has probably not even met this lender in person.  They have no relationship other than working for the same company.  Therefore, the lender does not feel obligated to do their best.  They can get by with doing a half ass job and as long as the loan goes through and the property closes, the bank does not care.  They don’t care about the relationship between the lender and buyer. You the buyer, are the number one priority in my eyes as a REALTOR®.  I want you to feel comfortable and be involved with the whole process.  The lender should be in contact with you at least 5 times a week until closing through a combination of email, text, phone, or in person.  You are not going to get this attention with a majority of the preferred lenders.

Another reason not to use the preferred lender is that sometimes they don’t make any money off the deal.  What does this lead to?  Terrible customer service.  They are already backed up as is and having another loan to process without getting paid is going to be shoved to the bottom of their stack.  This is one of the biggest purchases of your life and you want to work with someone who realizes this as well and will give you their full attention.

My clients had to learn the hard way.  I want to warn you buyers out there to get with an agent who is experienced in foreclosure properties.  If you’re in Northern Virginia, then get in contact with us because we’ll take care of you.  We know how stressful the home buying process can be and that stems from being uneducated.  We have dealt with over 85 foreclosure transactions and consider ourselves professionals.

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