Have you ever asked someone a question, received really good advice but then totally disregarded that advice to do your own thing because you thought you knew better? (I’m guilty.) I feel like this exact thing happens when I strongly encourage my clients to use a local lender for their home purchase but then one of them goes rogue and works with someone across the country. At which point I brace myself for the inevitable … a delayed settlement.
No matter where you buy a piece of real estate in America, using a local lender is key to a smooth settlement. A local lender will understand the nuances of their market, the documents, and the processes to ensure a timely settlement. Nowhere is this more important than in the Washington DC area. The Washington DC metro real estate market makes up three jurisdictions: Washington DC, Maryland (Montgomery and Prince George’s Counties, and Virginia (Northern Virginia). Each jurisdiction has its own laws, contracts, addenda, time frames, licensed contractors, settlement companies, and more. A good local lender will be up to date on each jurisdiction. Using a non-local lender? Well that’s just opening the door to problems and, in many instances, a delayed settlement. Sometimes a homebuyer will lose the property all together.
I’m currently working with a buyer who decided to use a national lender based in California. Not even one time zone away … three. Just that fact alone makes my eyes role. I added a deep sigh to the eye roll when the lender told me he never did a loan for a Washington DC home purchase. Never. Ever. Settlement is scheduled for tomorrow and it’s just been delayed. Surprise, surprise. The delay is for many important and intricate reasons boiling down to lack of knowledge of the contract, time-zone challenges, and terminology. Throw a national holiday into the mix that includes a long weekend, well that’s a disaster cocktail waiting to be spilled. Everybody, especially the buyer, has been scrambling all day and is needlessly stressed. My only saving grace, the appraisal went fine. Phew! (Instant equity, by the way.)
A homebuyer can use any lender he/she chooses so I make it a practice to never tell a client to use a specific company. But I’m happy to recommend a couple lenders who I know can get the job done and on time. I’ll also encourage the buyer to ask friends and family for recommendations. The buyer is the ultimate decision maker. After all they pay the mortgage. But for the love of all things stress-free, please, PLEASE, use a local lender. I promise it makes a difference.