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Category: Inspirational Current Grade: A+ Total Views: 601 Member Comments: 1 |
Posted on: 12/28/2007 Posted by: djfelip Blog Points: 860 View all blogs >> |
For those of you who are new to my blog, I welcome you. Our company, “The PerDare Group”, recently negotiated a 30% pricing discount on a bulk purchase of condos in our hometown of Las Vegas. As much as I would like to brag that this was a seamless and pain free transaction I really cannot. Due to numerous problems that came about because of the real estate, mortgage, and title professionals involved with this transaction here I am sharing our experiences with you.
Caution should be strictly practiced when selecting real estate and financial professionals to service your clients. In our particular experience with these 25 condos our clients had to jump every possible hurdle to actually buy these properties! So lecture aside, lets jump head first into the mess that was our most recent transaction.
Issue #1 – Incorrect earnest money deposit payment
· On the front end of this transaction each client was told the required earnest money deposit to get this transaction started. 9 of 15 clients opted to pay via credit card which was supposed to be an option.
o Come closing on the properties each client was informed the title company cannot accept credit cards and they all had to scramble to get the money wired in to close.
Issue # 2 – Pre-approval issues
· For this transaction we referred our clients to the builder’s lender.
· On the front end of this transaction our 15 clients went through the 1003 application process with the loan officer.
· The PerDare Group asked that each client receive a pre-approval with loan terms and conditions needed to close each transaction. Three weeks into the process 7 of the 15 clients were told they needed to bring an additional 5% to the table as a down payment to close.
Issue #3 – Contract Confusions
· As we reached the closing date for these properties confusion from the seller arose due to the fact that his representative realtor did not properly explain the deal he was making with our clients.
o After three business days lost we finally had a resolution to the issue that did not change the purchase for buyer what so ever.
Issue #4 – Title Company going out of business?!?!?
· And for the grand finale! The first three clients in line to finally close on this transaction got to experience what happens when a title company, to whom you sent the down payment and earnest money deposit, goes out of business!
o Apparently the owners of the title company that was chosen (by the seller’s realtor and the loan officer) to handle title and escrow, decided to skip town with all of the funds!
o Although these funds were insured by a major title insurer do you realize how stressful it is to explain this to a client?
In today's highly competitive and slow market, productivity and efficiency contribute as much to business success as the quality and quantity of deals closed. High profits erode quickly because of poor business practices. Whether your business is just starting up or has been around for years, in efficiency and a lack luster approach to closing your deals will put you down for the count in today’s market.
With a lot of effort and hard work from our PerDare Group team we kept this deal on track. Needless to say it would have been a lost investment opportunity and our clients wouldn’t have seen a net profit of $20,000 upfront with built in equity as protection for the future.
