laying the foundation of a transaction

I know the audience here at Lenderama is mostly mortgage lenders, but I’m hoping there are a few Realtors reading, too.

Having a well trained pro start a transaction lays the foundation from which everyone else creates their product. Correct procedure at the start ensures a successful conclusion.

If the property is listed through a Realtor, then the listing agent lays in the first blocks. If the property is a FSBO, the responsibility falls on the mortgage lender.

The CORNERSTONE of any real property transaction is correctly identifying the parcel and ownership.

The most effective and reliable way to set that cornerstone is to get and READ the current deed.

Deeds aren’t that terribly hard to read. Look at the names of the Grantees and then look at the purported seller. Are they the same person? Are there other names there?

I have seen more than one transaction go through the listing process, months of marketing, and full mortgage approval only to find out that the property was owned in a manner entirely different than disclosed to the listing agent. These deals tend to fall apart because there is usually a reason that the party who listed the property wasn’t being truthful.

Then we have the transactions in which the seller owns multiple parcels and only intends to sell one. Unless the listing agent or lender takes time to carefully ID which parcel is being conveyed, the buyer may be mislead, the appraiser may appraise the wrong property, or the title insurer may search the wrong property. This type of error usually doesn’t surface until the new deed is presented to the seller for signature. Sometimes it isn’t discovered until the year after closing when everyone gets their tax bills.

Finally ask for and look at current state or federally issue photo ID. This is the new standard and you ought to start right from the beginning dealing with the issue. If your borrower or seller doesn’t have it, they may have trouble closing. Use the time during the transaction so that they can update their ID. Waiting until the closer askd for ID is like playing Russian Roulette. You sure don’t want a moving van in the driveway and a closing postponed while the seller updates their driver’s license.

All of these situations create hardship for everyone and the consumers have a hard time understanding how it can get so goofed up.

So, if the burden is on YOU to start a transaction, lay that foundation carefully. Don’t be afraid to ask for the deed and current photo ID. Your customers will appreciate your professional conduct.

Mortgage Industry Professionals. Like what you see?
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