Big Bank Lending vs. Using Local Lenders // The Real Estate Blitz

>>KRIS: What’s going on everybody, KSA Kris
here. Got a good friend in here coming to hang out,
and we’re going to be talking about lending today, lending. I think that the first that I would want to
start off with … Everybody, real estate agents specifically, everybody thinks “Oh
yeah well you know, I have a preferred lender, I know what lending is,” and honestly, I’ve
been in this a long time and I’m still realizing at least once a week that I don’t know what
the hell is going on when it comes to lending. We’re going to be hanging out a little bit,
so introduce yourself tell them who you work with, etc, at least down here in San Diego
and also Riverside County.>>ERIC: Yes, good morning, Eric Bibel here
with Gaylord-Hansen Mortgage Team, with Caliber Home Loans. I have an extensive knowledge of all scopes
of lending and residential mortgages, and I’m here to answer whatever questions you
guys have for today.>>KRIS: Cool. Yeah, so I told him “Ah you know, let’s just
wing it, let’s just have fun.” You’re an expert at what you do, I am just
a very curious person, so we figured we’d just kind of run with it and see what happens. So I think there’s a couple different areas
that I wouldn’t mind talking about, one of them is, because I hear about it all the time
when we’re about the client, “What’s the difference between your preferred lender or going to
a Quicken Loans or somebody online. And I know that there’s a huge frickin’ difference,
but I don’t know how to always convey that to somebody. So what is the difference between somebody
working with somebody like you or just going online and hitting Rocket Loans or whatever
the hell it’s called?>>ERIC: Huge difference, and that’s a great
question. I mean, having your preferred lender you’ve
created an edified relationship with, so really you understand one another’s business, how
each entity works and what their specific need is for that particular client. And ultimately, there is a want there on both
sides of the house to ensure that you’re ->>KRIS: I’m gonna take notes.>>ERIC: That you’re doing your thing, that
we’re ultimately helping your client and building your business. Quicken or any of those other big kind of
machine lending teams do not care about you. They don’t care about the people, they don’t
care if the deal doesn’t close, therefore they miss a lot of the potential downfalls
in the beginning of the transaction that can be easily identified and easily navigated
through on the front end. So having a personal relationship, I give
out my cell phone, you know where to catch me, at your guys’ events, we invite you guys
to ours, so really there’s the personal touch to it that if something does go awry it’s
not a surprise, it’s not coming out of left field.>>KRIS: I think that’s what I like, at least
as an agent and as an operations officer for a business of agents, I like the fact that
we can pick up the phone and call somebody. And things always happen in every transaction,
there’s always something. And the hardest people that we’ve found to
work with out of everybody, and it’s upsetting to me, is Navy Fed. I was in the military for 20+ years, and I
retired out of the military and I have Navy Fed, but christ they suck to work with as
an agent trying to get somebody to close on a property, one of your clients.>>ERIC: Kris, you bring up a great point. Navy Fed, USAA, Veterans United, they are
fundamentals in the military community. They’re not focused around mortgages, they
don’t understand mortgage, mortgage is not their backdrop. We specialize in mortgages, that is our motive;
we’re not a depository, we’re not selling credit cards, we’re not selling atuo loans,
those additional auxiliary components … Our main and sole focus is around mortgage. And that said, you also brought up another
good point, communication. Those companies don’t work on the weekends,
they don’t work after hours, we’re like you. We’re in the trenches six o’clock in the morning,
whether it be on a Tuesday or on a Sunday. We get a majority of the information in shopping,
modes of the transaction occur in off-bank hours.>>KRIS: Yeah, that’s true, and I think that’s
what we’ve ran into when we deal with bigger lenders. Also, I did a radio show a while back, and
if you go back and look at KSA insider we actually did a whole one … So I was covering
for Eran who does Lunch N Learn with Eran on live radio in San Diego, and he had been
sick so I started covering all of his radio shows for him. The thing is, he’s a lawyer and he talks about
consumer protection, I’m not a lawyer but they asked me to do it. I’m like “Hell yeah, I’ll do it, I’ll figure
it out as we go.” So I did a whole bunch of consumer protection
stuff on what I know, which is real estate. We talked about predatory lending and predatory
mortgages, and honestly every time we came to an example, it was never the smaller … And
I don’t want to say small as if it’s a negative thing by any stretch of the mind, but a smaller
hyper-localized business, as opposed to the big-box businesses – every time we turned
around, they were the ones that were creating the predatory conditions. Even though it may look legal … And how
that one came up, that episode when I was writing it out, one of our lenders that we
had used calls me up out of the blue, and he says “You would not believe I had to pay
back my commission because this other lender came in and said they could provide a better
rate, and then they had their hand out for their money.” I guess that happens for you guys, if somebody
can within a certain amount of time ->>ERIC: Not so much anymore, that was a thing
in the past, commission buy-back, but it’s almost a behind the scenes pre-payment penalty,
which most are moving away from. We don’t have one.>>KRIS: And this is basically what happened:
They actually tricked our clients into thinking they were getting a better rate, and what
they were doing was they were paying less on their taxes … And they were making it
look like they were getting a better month-on-month rate, but they weren’t, they basically had
to pay it all back anyways in property taxes, so they were just “Oh you want to get that
rate? Yeah, we can get you to 400 a month, no problem.” And they were basically juicing it from the
frickin’ property taxes.>>ERIC: Oh, that’s terrible.>>KRIS: Yeah, and I was floored, man. But anyways, go check that out, I did a live
radio … I had a couple radio shows back in the day. But I think that’s why I’m a big fan of having
somebody that’s hyper-localized, being able to work with somebody that we can call as
a real estate agent. So, I think the big one is, if a real estate
agent was watching us, if you were to educate them on “This is how you express or explain
to a potential client or a working client, not to steer them but to basically educate
them,” because I believe that you dominate through education.>>ERIC: Absolutely.>>KRIS: And of course with RESPA “You can’t
steer in this and any other…” We’re not looking to steer anybody, we’re
looking to provide information, and they are grown adults, they make their own decisions. And If they still choose to go to B of A and
get that loan, hey, that’s their choice. But what could we do as agents to educate
people on why using a really successful producing hyper-local lender is the right path?>>ERIC: Well, number one, the big thing is
“listen.” We find so often people just make assumptions
based off pre-concieved notions or what have you, but really listening and understanding
the clients’ specific need and what they’re ultimately looking to achieve. And again, being hyper-local and consolidated
into a specific area, you are the market expert. Understanding what that person specifically
needs from a property element is your expertise, with that coming in from a local lender, the
ability to facilitate around those shortened timelines if needed and helping getting your
offer accepted, that’s really where the local smaller lender will facilitate around. So, being able to really understand the client’s needs, educating through means of technology, and just tailoring it specific to what they’re
looking to accomplish through the means of financing.>>KRIS: Right. So, here’s one objection that I have heard,
and hopefully you can annihilate this objection: I have actually had clients say “My concern
with working with a small-time lender is that they won’t have the same competitive rates
as Bank of America.” Truth or false?>>ERIC: True to an extent. In certain elements of financing, absolutely
the banks are gonna be the better option with rates. But one, rate is nothing if you don’t have
a house tied to it, so that’s number one. Number two, we’re not a depository, most mortgage
banks are not a depository institution; where Bank of America, Wells Fargo, Chase, US Bank,
they’re lending against their own money. Mortgage on their end is a loss leader, their
goal against acquisition of mortgages is to draw in deposits, draw in new credit cards,
draw in new clients, new means of capital. They don’t care about mortgage. That said, their turn times are horrible,
their ability to execute … They’ll lead a client 17 days into the escrow and say “Hey, guess what, you actually don’t qualify. We don’t care, there’s nothing we’re gonna
do, goodbye, you lose your earnest money deposit.” So in that element, in specific elements of
financing, yes, mortgage banks typically their rates are higher, but their rates are higher
typically because they’re not operating at the same capacity as a bank. Now what I can say is most mortgage banks,
and especially for us, Caliber, we are the leader when it comes to veterans; so VA financing,
FHA financing, conventional, we’re right in the pack as everyone else. From the rate element, we are very well priced, but with that we’re not the lowest priced in town but with that you’re experiencing a service that other
lenders cannot deliver upon. I mean, price is a very sensitive subject,
I get that.>>KRIS: I think it is, but this is what I’ve
found: I think the majority of people are not concerned about price as much as you would
think, at least from what I’ve experienced. They’re more concerned about the process and
the experience and getting to close on their home, their dream, whatever it is in that
chapter of their life, even if it’s not their dream, that next chapter. And working with somebody they know that they’re
gonna get the job done, as long as it’s competitive … I think that’s the key, that it’s competitive
and it’s within their means.>>ERIC: Absolutely.>>KRIS: What I’ve experienced when people
are chasing … We even tell people very bluntly, “We are not the cheapest when it comes to
real estate services, as far as being real estate agents, to list a property.” Right now, one of our best sources of money
for our business is starting to become Redfin, and the reason why is become they are a 1%
agent that aren’t providing all of the stuff that we’re providing, so once someone experiences
what they experience with Redfin … And by the way, this is my Youtube channel, so I
can say whatever I want.>>ERIC: [laughter]>>KRIS: So once they experience Redfin, they’re
like “Man, I wish I would have paid a little more to begin with and experienced what you
provide.” They’re becoming our best lead gen, past Redfin
clients. And it’s sad to say that because I think the
Redfin model overall as a business is a pretty great model, but how it’s implemented right
now is not very good. But, you know, what do you expect?>>ERIC: I mean, you set the stage for the
best argument in rates: You get what you pay for. The lowest rate doesn’t necessarily mean the
best service. Again, you can have the lowest rate in town,
but if there’s no house attached to it, guess what? It’s not even worth the paper it’s printed
on.>>KRIS: That’s right. Well everybody, we’re about 12 minutes in,
I told everybody I’d start making these shorter, because I was making them like 45 minutes
to an hour long of me just sitting here running my mouth So we’re 12 minutes in, I’m gonna try to get
us down to 15 and eventually maybe 10, I doubt it. Appreciate you being out here.>>ERIC: Thanks for having me.>>KRIS: Tell people how they can get ahold
of you if they’re looking for a local lender in San Diego or ->>ERIC: Go to our website,,
my beautiful picture is on there.>>KRIS: I found him on Facebook.>>ERIC: Yes, Facebook as well, Eric Bibel. Give me a call. B-I-B-E-L.>>KRIS: Very good, appreciate it. KSA just doing what we do, check out the Real
Estate Blitz online. Of course our Youtube channel, if you haven’t
yet, go on there and subscribe, check it out, we always put up new content. Check us out on Facebook, and like/share/comment. Have a good one, we’ll see you all later. KSA Kris, we’re out.

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