Working with a Real Estate Closing Team
Most sellers and buyers think of the agreement as the tricky part of the transaction and the closing as the part they can take pretty much for granted. Agents know otherwise. As an agent, your work isn't done and your payment teeters in the balance until you successfully complete this final, challenging part of the real estate transaction.
The closing involves an army of people, and a good closing team can help you increase your prosperity by letting you efficiently wind up one deal so you to move on to the next.
Work diligently during the weeks leading to the close to see that the loan, title work, and escrow or document preparation are handled by people on your own closing team. Make it your objective to direct the business to companies and individuals you know will perform in a timely, professional manner. Doing so assures your clients good service and fewer surprises and reduces the time you and your staff invest in closing the transaction.
The loan officer
The loan officer holds a front-line position on your closing team. He or she secures the appraiser, verifies deposit of funds, verifies employment, and, ideally, completes the loan package for the buyer within a few days of contract acceptance.
Make sure that the loan officer on your team is a great salesperson backed by a highly organized team that's able to push transactions through to a seamless close. A good loan officer can smooth out problems before you even hear about them, averting landmines and sparing you significant and time-consuming challenges.
Loan officers can add considerable value to your business even beyond the sales closing. When you form a relationship with a loan officer, you can work in concert to land clients. You can follow up on leads together, or you can refer clients to each other; ultimately, you both win more business as a result of the relationship.
The home inspector
The home inspector is hired to evaluate the condition of the property, spot current or potential defects, and give guidance regarding the proper remedies.
On your closing team, you want a home inspector who can quickly produce an easy-to-read report written in everyday language. If technical jargon is necessary, insist on plain-English translations. Nothing concerns buyers more than problems they don't understand.
Work with home inspectors who are thorough and who fully disclose all defects and items in need of repair without throwing gasoline on potential problems. Beware the home inspector who's an alarmist, and instead look for someone who has a "just the facts, ma'am" approach.
Because lending institutions often have the largest stake in a home — greater even than that of borrowers — they hire appraisers to determine the value of property.
Most lenders have relationships with a number of appraisers. Each appraiser follows a unique valuation approach and, as a result, each interprets the value of a home slightly differently. If you're working a deal and having trouble getting the property to appraise out at the sales price, ask your mortgage originator if another appraiser may be called upon.
Some appraisers have low-cost, limited-level memberships in the local MLS and therefore don't receive lockbox keys. The membership saves them money but creates an inconvenience for agents on whom they have to rely for access to homes. Follow the once dumb–twice stupid rule: If you have to drive out to a home just to open a door for an appraiser or, worse yet, to stand around and wait until the job is done, make it a point to work with a different appraiser in the future! You'll find plenty of great appraisers that don't waste your time opening doors.
The escrow closer
An escrow closer is a neutral third party who coordinates the preparation and signing of documents, holds and distributes funds, and records the documents and deeds involved in a transaction. Some states are non-escrow states, which means the real estate company provides these services or, in some states, an attorney prepares all the legal documents. Check with your broker to clarify the standard operating procedure in your area.
A good escrow officer keeps the transaction on track for an on-time closing. He or she also provides a second point of reassurance for your client by doing the following:
- Staying in close communication with you and the client throughout the weeks leading up to closing
- Sharing updates that confirm things are going well
- Underscoring what a great agent you are and how lucky the client is to be working with you
The escrow company can also be associated with the title company, which researches the home's previous owners and searches for liens and encumbrances on the property. Most lenders require title searches to ensure that titles are clear before they issue loans for properties. Lenders are in what's called first position, meaning that they take control if buyers default on loans.