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Real Estate Fight Club

21
Dec 2020

Episode 65: Should The Lender Have to Pay for an Extension?

December 21, 2020

In this episode of the Toe-2-Toe Podcast, hosts Jenn Murtland and Monica Weakley are taking off the gloves and duking it out over this question: Should the lender have to pay for an extension on the closing? They are both FIRED UP about this one!

Episode Highlights: 

  • Jenn thinks that if it’s the fault of the lender, for whatever reason, they should have to pay for the closing extension.
  • If lenders say it can be done and is going to be done, they have to remember the lives that they are affecting.
  • Monica suggests that there could be an agreed-upon fee in case the lender does not deliver on time.
  • Agents need to make it clear that if lenders blatantly screw up, they will never do business with them again.
  • A centralized system where agents can give testimonials on lenders would make lenders care more.
  • Be sure to share any previous poor experiences when a buyer brings a lender to you.
  • Having skin in the game would force lenders to communicate more effectively.
  • After talking to other agents, Jenn found that everyone was Switzerland on the subject.
  • Lenders should do their due diligence before pre-qualifying anyone; it would save everyone a lot of trouble.
  • Monica believes there should be consequences for the lender if they cannot deliver, but not from a financial standpoint.
  • Agents have the power to force lenders to keep their word if they can combine forces.
  • Jenn believes that it should be a financial punishment at risk of putting lenders out of business.
  • This week’s tiebreaker, Gino Herring, has been a real estate agent for 18 years and provides insurance services through Mass Mutual.
  • As long as agents make sure to educate their clients completely upfront, lenders should be punished for messing up.
  • Agents must make sure to provide a top-notch client experience or otherwise accept responsibility for a closing extension.
  • Overcommunication is suggested because under communication can dismantle a deal.

3 Key Points:

  1. When lenders ask for an extension, the effects go beyond money. People are moving their entire lives when changing houses.
  2. High ratings, paired with a large number of them, organically build trust with buyers and sellers alike.
  3. Problems that cause closing extensions can come from a variety of sources, including buyers, agents, and lenders.

Resources Mentioned: