6 Tips For Realtors For Managing the Appraisal Process

In today’s active market it can take time for values to reflect all sales activity. Taking a proactive approach to the appraisal process will help the appraiser when it comes time to execute the report.

1. Schedule the appraisal as soon as possible. If you are going to be away, make sure you have coverage for the appraisal appointment. Keeping the process flowing helps avoid delays in the loan approval process.
2. Stage the home as though you are conducting an open house. Now that the property is under agreement, don’t let your seller get too relaxed. Make sure that the house looks as good as it did the day the buyer first saw the property. First impressions do matter, so keep the property showing well!
3. Make sure you get the fully executed Purchase and Sales agreement (P&S) to the lender right away. Appraisers are now charged with reviewing the purchase contract to determine that the property as appraised matches the property represented in the agreement. The appraiser is required to review the P&S before they can release the appraisal report. It is vital that the lender receives the agreement on time.
4. Always be prepared to support the sales price by bringing a folder that contains the comparable sold properties that you and the seller used to determine the list price of the property.
5. List any improvements made to the property since last sold. Especially those changes that are not so readily visible such as electrical, plumbing or roofing work. List all improvements made since the last recorded sale of the property.
6. If the appraisal on a purchase comes in low, keep an open mind and don’t panic. There can be ways to manage this situation that keeps both the buyer and seller in the transaction. It is important to work directly with your loan originator and together you may find solutions that work for all involved.
About Wintrust Mortgage: Wintrust Mortgage was created to assist in the realization of the American dream of home ownership. Our large volume and the ability to lend in all 50 states make us one of the largest mortgage bankers in the country. In 2015 alone, we originated $4.3 billion in loans. Wintrust Mortgage hosts over 190 retail, operations and bank locations across the country. Wintrust Mortgage is a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank, NMLS# 449042. Equal Housing Lender. For more information visit the company website at www.WintrustMortgage.com, “Like” us on Facebook by visiting www.facebook.com/WintrustMortgage and follow us on Twitter @WinMortgage.


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If It Sounds Too Good to be True…

I am constantly amazed at the various techniques created to target vulnerable people out of their money or identities.  Yet, we are all susceptible to these destructive activities.
In the world of big data, we can be easy targets.  Consider this, on Facebook you can purchase targeted ads called sponsored posts.  For example, you can target your post to homeowners, over 50, within a specific geographical area.  Targeting allows you to market directly to a specific audience.
Someone who I trust and respect recently shared a “sponsored” Facebook post about discounted sunglasses being offered by a famous eyewear designer for one day only, as a fundraiser.  The post claimed that this is the year-end clear out and that all glasses normally priced over $100.00 would be $25.00 for one day only, and all sales would go to charity.  I was fascinated and decided to dig in and see if this offer could possibly be true.
I clicked through to the web site and it all looked to be in order, the logo looked legitimate, the site functioned well, the designs and names of the sunglasses were familiar.  The web site looked genuine to me yet there was something about it all that just felt off to me.  So I decided to invest the $25.00 to get to the truth.
Three weeks later my husband asked me what I ordered from over-seas, confused I found the box and remembered my sunglasses.  They looked like the ones on the site but they were definitely a counterfeit product.  I know because I actually own the same pair that I ordered, you can tell simply by the weight, quality of the materials and the slightly blurry logo on the frame!
Mystery solved, yes it was fraudulent, I think just to sell fake sunglasses, but I am keeping an eye on the credit card statement as well to be sure that there isn’t anything more nefarious going on!
As part of the banking industry we are required to take multiple, annual training classes on many subjects and one of those is social engineering or the types of attacks that can hit you through email, fake phone calls or other communication that comes with a request for a password, or other identifiers.  I am pretty good at spotting a fake, it has become a bit of a game for me.
How do you know when you are looking at the real deal as opposed to a decoy designed to cheat you in some way?
In today’s world of constant non-verbal communication, we think that we are talking with our friends and family when we are posting on social media, and we are.  But when it comes to sourcing a reference for an important transaction, do not believe what you read, even if posted by a trusted friend.  Pick up the phone and have a conversation.  In the end human connection is fulfilling and you can cover more ground and gather more information when talking through a situation with your friends, rather than relying on a social media post for your solution.

We’re here to help you and your buyers do more, learn more and grow more!

About Wintrust Mortgage: Wintrust Mortgage was created to assist in the realization of the American dream of home ownership. Our large volume and the ability to lend in all 50 states make us one of the largest mortgage bankers in the country. In 2015 alone, we originated $4.3 billion in loans. Wintrust Mortgage hosts over 190 retail, operations and bank locations across the country. Wintrust Mortgage is a division of Barrington Bank & Trust Company, N.A., a Wintrust Community Bank, NMLS# 449042. Equal Housing Lender. For more information visit the company website at www.WintrustMortgage.com, “Like” us on Facebook by visiting www.facebook.com/WintrustMortgage and follow us on Twitter @WinMortgage.

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An Offer Is a Contract – All Parties Have To Take It Seriously!

It’s silly season in real estate and that means spring!  Another year of low inventory with many motivated buyers who will seemingly do anything to get their offer accepted on the house of their dreams.  Buyers are signing all kinds of offers.  Some will waive their mortgage and other contingencies, while others may have escalation clauses built.  Such clauses dictate that the seller can accept a higher offer if one is presented.  Some buyers are simply jumping in to compete and then finding themselves in a regrettable situation later.
Recently, we saw all three of these scenarios come up.  This makes me wonder how buyers are being advised and counseled when they are making their offers.
For example, we have a loan approved with just a few final and minor conditions to be met by the buyer.  However, the buyer has gotten cold feet and no longer wants to buy the house.  They ask us if we could decline their loan so that they may get their deposit back.  This is not something we can do.  We have to report to our regulators our pre-qualification process, decline rates and any and all reasons for any decline.  We cannot simply decline a loan because the borrower changes their mind.  “What if I just don’t send in the documents you requested?” the buyer asks.  When you sign a contract with a mortgage contingency you agree to meet all conditions of the mortgage process.  If the borrower never sends in the required documents, we can withdraw the loan after we send out a ‘notice of incomplete’.  This notice gives the borrower a specific amount of time to respond before their loan is cancelled.
The standard mortgage contingency has an ‘apply by date’ to insure that the buyers perform in a timely manner.  This contingency forbids them from saying that they are unable to get their loan approved by the commitment date as a result of them not getting their information to the mortgage company by the dates in the original contract.
The time to make sure that buyers fully understand their contractual obligations is before the offer is made.  An offer is a contract and the purchase and sales agreement is a secondary contract, however once the offer is signed there is no guarantee that you can change the terms when you get to the purchase and sales agreement.
In another situation, we have a set of buyers approved to close on their new home.  There is an escalation agreement in their offer stating that the seller could continue showing the property.  If the sellers get an offer higher than the agreed upon price our borrowers would then have 48 hours to meet the new offer.  So, lo and behold, a higher offer comes in!  The agent negotiates the seller down a bit to keep the current buyers on track, but of course the current buyers are upset about having to pay more.  However, they did sign the offer and the worst-case scenario as outlined in that offer materialized.  Their only choice was to meet the higher price or start their home search all over again.
This same scenario also played out in a precedent setting lawsuit.  In this case, a seller accepted an offer but the buyers didn’t sign the purchase and sales agreement on the date specified in the offer, the seller then accepted a higher offer from another party and the first buyer filed suit and won.  The court determined that the original offer was a contract and had to be honored.
The bottom line is to not take any risks; make sure all parties fully understand what they are getting into when they make an agreement to purchase a piece of real estate.  Be certain that they know what they can and cannot expect as the transaction moves forward and they fully understand their legal obligations in the event they get cold feet.

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Extraordinary Customer Relationships Grow When You Provide Knowledge!


I read recently that the recent drop in interest rates has bumped up the “re-fi population” to 6.7 million borrowers from 5.2 million last month, according to a report put out by Black Knight Financial Services.
How many of those homeowners did you sell a home to in the last 8–10 years? You now have a very good reason to reach out to your successful homebuyers and provide them with this news. For many homeowners, the barrier to refinancing was inadequate equity, a disruption in employment or simply bad timing in the interest rate markets. When rates were lower people were not in a financial position to refinance for many reasons. Still for others, it could simply be a lack of awareness of the financial markets and the current interest rate environment.

Delivering valuable and timely information to your clients is one of the best ways to grow extraordinary customer relationships. In these times of extremely low inventory, the agent with the listing wins every time. Connecting with your homeowners consistently is the best way to stay top of mind when they are considering a move.

However, this information regarding declining rates and rising values could also spark a conversation about listings. Research and anecdotal evidence shows that many homeowners do not have any idea what refinancing options are available to them. They are often unaware of the amount of equity in their home and of their personal buying power. There continues to be so much negative press about the availability of mortgage credit that people who are well qualified to move up don’t believe that they may qualify. You have an opportunity to raise awareness and in the process, generate a couple of listing possibilities!

Timely and value-added communication with customers is key. This simple act of service could help them save money today or on future mortgage payments, which could put them on a path to new housing opportunities. Ongoing conversations with customers bring more value than any recipe card or sports team event calendar ever will.

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Speed = Sloppy = More Work for all in the process chain.

It is busy in the mortgage world.  Rates have dropped enough to spur a refinance boomlet, and the spring market has opened early due to fair weather and The New England Patriots loss. 

As frequently referenced in this post, the mortgage process is exacting.  It requires that all documents match and that the mortgage application is bolstered by the supporting documents.  The appraised value must be supported by the report and the comparable properties and the title commitment should be clear.

When business ramps up everyone gets busy and when everyone gets busy mistakes get made.  Those mistakes require extra work for all involved because there is zero tolerance for sloppiness in the mortgage process.

Recently an appraisal report was submitted for a second home on Cape Cod.  The report was written subject to the utilities being on and verification that those utilities work.  We went to the client on this refinance and they stated to us, “that does not make sense, we use the house year round, while the appraiser was there the heat was on, the lights were on and I gave the appraiser a glass of water out of the tap!”

Apparently there was an error on this report.  It can be a common practice for an appraiser to simply open their software and copy over an old report.  It is not uncommon to see erroneous data on an appraisal report due to this practice.  Now everyone in this transaction is impacted, our processor had to drop everything to call the borrower.  Then the processor had to reach out to the appraisal management company to get the report repaired to contain the correct information.  The appraisal management company had to connect with the appraiser who then had to fix the report and re-upload it into the system to be reviewed yet again.

These types of situations are experienced daily in the mortgage business, from incorrect condo questionnaires to incorrect listing data.  Remember that we in lending are held to a very high standard by our regulators.  We are supposed to have all information 100% perfect, yet we are only humans, dealing with other humans who we depend upon in this process.

In a tightly timed process with penalties that hit if the timing is not met, data has to be right the first time.  Take a few extra minutes up front before you fill in the blank.  Make sure that you have the right data going into the right box.  Rushing through this process increases the likelihood of errors and can create a chain reaction of more work for all in the process chain.  Speeding can cause accidents not only on the road, but also in mortgage transactions.

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Still Decluttering? How about decluttering your relationships!

Two Facebook posts that I read the other day caught my attention; one right after the other, and the theme was easy to spot.

“Show me your friends and I will show you your future.” Then, “Don’t waste time on people that don’t sharpen you. You need to evaluate who’s on your team? Who’s speaking into your life? Who are you giving your time and attention to? Are they building you up or tearing you down?”

In the same spirit, Marie Kondo’s book, “The Life Changing Magic of Tidying Up,” suggests that one way to determine whether to keep or let go of an item, be it clothing, housewares or collectibles, is to consider, “Does This Spark Joy?”

Can we use this same approach in our relationships? Clearly my Facebook friends were talking about the people that we surround ourselves with, and how much our associations contribute to our lives and to our personal and professional successes.

I’ve thought about this subject long and hard. Jim Collins’ book, “Good to Great,” is one of my defining business reads. There are many terrific business concepts discussed in this book. One concept that I think about frequently is, “get the right people on the bus and get the wrong people off the bus quickly”. Meaning, hire talent when you discover it and swiftly release people who do not fit with your culture or are not working out for other reasons.

Where does the concept of, “sparking joy,” fit in to whom we hire, whom we work with, or who we let into our lives?

I think that requiring all your relationships, whether professional or personal, to spark joy is a good qualifier among a list of many. I also want my personal and professional relationships to challenge me, spar with me, need me, make demands of me, argue with me, contribute to and support me, and allow me to do the same for them. When relationships are balanced, productive and supportive they will demand a lot from us, and that, in the end, is joy.

What sparks joy for you in your professional or personal relationships? When you have identified this for yourself, you can declutter your relationships, and build a community of joy and stimulation to help take you into your future.

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Keep your buyers warm and toasty during the long winter months!

By all account this is going to be another strong real estate year. Buyers are active and open houses are busy. This is a great time to reconnect with all of the buyers who were not successful in obtaining a property in 2015.

When connecting with your buyers make sure to discuss the following topics to tee them up for a purchase in 2016: Have they updated their pre-qualification and have they taken higher rates into account?

Has anything affecting their financial profile changed?

Will they consider an ARM mortgage? Suggest that they talk about this option with their mortgage lender.

Is there anything that they can do financially to make their pre-qualification stronger?
Will they consider expanding the area of their real estate search? Can you take them on a tour of alternative communities?

This could also be a good time to connect them with a different lender if they are not satisfied with their current service experience.

This is also a time when I would connect with any potential sellers, not aggressively to list their property, but to gently ask if there is a number where they would sell today. Many sellers have no idea what their property is potentially worth in this market. Who knows how many frustrated buyers might meet a seller’s dream number if the opportunity presents itself. As Rosemary Kelleher from Elevate Coaching likes to say, “Everyone is a seller at the right price, don’t worry about the timing”. Find out the right price for all of those sellers sitting on the sidelines and see if you can find the right buyer at the right price for them.

There is lots of heat in our real estate economy, stay on top of buyers, communicate the truth with potential sellers and you will enjoy a warm winter and a sizzling spring!

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Great Service Never Goes On Sale Or Out Of Style!

I have a hard time understanding holiday shopping trends. For example, how is it that a product costs less from 7am to 10am than it does later in the day? The product has not changed, so what has impacted the value so suddenly and why do we, as consumers, buy into these games? Do we ever know what anything really costs these days? I’ve read articles extoling the virtues of bargaining and negotiating purchases, not just for cars and real estate but also major department stores and other retail situations. I guess best prices are available to those who haggle the most.

The mortgage business never goes on sale. At the end of the day we do not control interest rates or the costs associated with providing a mortgage. There are too many factors that control those figures; from our service providers, such as appraisers and attorneys, to regulators whose requirements have increased costs to consumers across the board, to the bond and financial markets which influence interest rates and more.
As consumers, we can shop and compare prices. In fact the CFPB’s “Know Before You Owe,” or TRID regulation is designed to educate consumers on how to shop for and how to compare mortgage offerings.

However, no one talks about shopping for service! From the numerous commercials shouting from the TV, to the pile of circulars in the Sunday paper, price is what it’s all about. Yet we are used to hearing the tales of woe and disappointment from friends and associates when a product they purchased does not deliver, or the savings did not make up for the lack of quality.

I love working in a service industry. Service never goes on sale. Service is what makes the difference in the home buying and home financing experience. Service cannot be negotiated; service delivery should be in the heart and culture of every organization that you transact business with.

What good service means can be different for each of us. As an organization or an individual providing service, the experience you provide can vary from your competitors along with how you define your offerings. What is important is to have a clear vision of your service delivery. Everyone in your organization should be able to define it, create it and deliver it to your consumers. They should consistently ask the consumer how their experience was and continue to improve based upon their feedback. On the surface it appears easy, but defining and delivering good service is always a challenge. It is this challenge that keeps so many of us in the mortgage and real estate industries engaged and energized.

“The bitterness of poor quality remains long after the sweetness of low price is forgotten.” Ben Franklin

Service never goes on sale or out of style. The challenge is to continue to define service by insuring that you are always exceeding the expectations of the experience of working with you.

We’re here to help you and your buyers do more, learn more and grow more!

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When it comes to insurance – Make it a policy to shop local!

There is a big ‘shop local’ campaign designed to get us holiday consumers to pay attention to our locally owned businesses versus spending our time, attention and money with the big national retailers and big box stores.

Shopping locally means a lot for local businesses and communities. For the consumer it feels good to support neighbors and friends, and to experience that high-touch personal service that is synonymous with locally owned businesses.

Shopping locally holds true for homeowners insurance as well. As part of the mortgage approval process, homebuyers are required to obtain adequate homeowners insurance well in advance of the home closing. The cost of insurance can impact a borrower’s qualification, so getting insurance early in the process can ease some of the stress of mortgage approval. Working with local insurance providers can make this a much easier task. Local agents generally represent multiple insurance companies and can offer choices in policies and carriers. Local agencies are able to move quickly and adapt swiftly if needed. We have received many frustrated calls from clients waiting for insurance binders from national companies where they are dealing with a voice at the end of an 800 number. My local insurance contacts can provide a binder in a day. If a borrower needs to make changes to their coverage before the home closing, these can be managed in hours, not days or weeks when you work with a local provider.

Although often covered through the condo fee, many of today’s condo buyers are required to carry additional insurance by their lender. A condo buyer wants to be sure that their coverage will pick up and cover the gaps where the association’s insurance ends. In this case starting with the insurance agency that manages the association’s insurance can be the best course of action and generally those agencies are local because they understand the local properties, laws and regulations when it comes to insuring condo associations and their unit owners.

Shopping locally is good for our local economies. Choosing a local insurance provider can be good for your stress level. It is great to deal with a local person who you can meet with live or get on the phone with ease. For quick, efficient quality service with that personal touch, consider shopping locally year round for all of your real estate, mortgage, financial and insurance needs.

We’re here to help you and your buyers do more, learn more and grow more!

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Greetings Real Estate Professionals – As we all are well aware, TRID implementation began with loan applications dated as of October 3rd and beyond.

Hopefully you are aware of the implementation of the new TRID regulations that change the way we all practice our professions in the world of real estate sales and lending. Here is a quick primer and some TRID survival tips to consider as we all get used to this new way of approaching the mortgage process in the third quarter of 2015.

Let’s talk terms first. With the implementation of TRID, even our language is changing. Here are a few examples:
Good Faith Estimate of Closing Costs = Loan Estimate or LE
Truth in Lending Disclosure = Now part of the Loan Estimate or LE
HUD = Closing Disclosure or CD
Final Truth in Lending = Now part of the Closing Disclosure or CD
Borrower = Consumer
Lender = Creditor
Closing = Consummation

I have compiled some tips to help agents navigate through this new landscape. Hopefully these will provide guidance moving forward.

First, you want to keep an eye on apply-by dates in contracts. If there are delays in performance, extend all dates accordingly. This applies to purchase and sale date, apply by date, commitment date and consummation date.

Make sure that you allow two weeks from mortgage commitment to consummation.

As long as we are talking about closings, which we now refer to as consummations, make sure that you are staggering them. Do not have all consumers consummating at the end of the month.

It is imperative that you educate your consumers. Make sure you obtain insurance early and that you are responding to lender requests quickly.

Have your sellers make any obvious repairs prior to listing. This helps prevent any delays once we are in the commitment window.

For any potential FHA sale/listing be sure that paint and safety concerns are addressed prior to listing.

When marketing a condo – Obtain condo docs in advance including master deed, budget and bylaws, as well as, insurance provider and management company contact details. Obtain a condo questionnaire in advance, if possible.

A few simple rules to REMEMBER:
The consumer must receive the Closing Documents three business days prior to consummation. The consummation will not occur if the CD is not received within that three-business day window. There is a hardship provision but will be very difficult for a consumer to prove hardship.

The consummation (closing) will be postponed if one of the following actions occur between disclosing the CD and the consummation; the APR on the loan varies by an eighth or more, the loan program changes or there is an addition of a pre-payment penalty.

However do not fear, we can adjust figures legally, even the day of the closing, as long as the adjustments do not impact the APR. Many agents have been told that all numbers have to be exact, however, there still remains room for minor changes. This cannot be promised on behalf of all mortgage companies, each company creates their own processes based on how they interpreted the regulations.

With the implementation of TRID, the bar has been raised for mortgage and real estate professionals. To ensure happy and satisfied consumers we have to come together and work as a team and deliver a high quality experience for all. We can do it and we will. Education is the first step and continued coordination will ensure we keep exceeding our customers’ expectations.

For more TRID TIPS or TRID Training, give us a call. We will be happy to come to your office and provide additional TRID education to help us all meet the demands of the new mortgage marketplace.

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