I caught up one of our loan officers; Bill Koder, during one of his working lunches today here in the office, and we had a brief discussion about what, in his experience, are the most common things that slow down a closing.
Read more for the transcript. Read more for the transcript. Click here for a checklist for what is required from a borrower to complete a full loan file.
Question: What is the most common thing that slows down the closing process?
Bill: The borrower or the broker. If they are not providing all the documents in a timely manner, and we are having to wait on them. That should never be the case. They should have their full package ready to go. I like to work with experienced investors who have a full complete package and file readily available on their desktop, so they can just send it over whenever they have a transaction.
Another thing that might take a little time is the appraisal order; typically we are looking at about 7 to 10 days for an appraisal to come back to us from the time of the order. So, I try to make sure that my borrowers and brokers understand that I want all documentation to me by the time that I get my appraisal back, in that 10 – 12 day window.
Question: If that happens, how long typically does it take to close a deal?
Bill: 5-7 days after I receive all the documentation.
Question: From the moment that someone brings an application and a full package to you, how long does it take for you to order appraisal and get things moving?
Bill: I like to order an appraisal within a day, if not that same day. I like to make sure that we have a legitimate deal, that the deal makes sense, make sure there is enough value there before the borrower or the broker spends the $500 on an appraisal.
Once we determine that we have a deal that looks like we can get it funded, then we go ahead and order the appraisal. It’s usually within 24 hours at the max before we determine whether we are move forward with an appraisal or not, and just decline the file.
Question: If you were talking to a borrower right now, what would you tell them would be the number one thing to do to make the process as seamless as possible?
Bill: Organization. Make sure that you have everything organized, labeled correctly. Make sure all your business documentation is in a file with your ID, your social security card. That seems to expedite things tremendously if they are organized.
To Your Success;
Lee A. Arnold
CEO
The Lee Arnold System of Real Estate Investing
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