Why is important to use a local lender for Miami Beach Real Estate

Using a local lender for Miami Beach real estate, especially when it comes to condominium purchases is important. Every time we start speaking with a new buyer who needs financing to purchase Miami Beach real estate, we often notice the fears, nervousness and lot of misunderstanding in regards to lending. There are a lot of misconceptions about lending and people tend to do what they feel most comfortable with and sometimes this is not always the best decision.

When I say “local lender” I don’t mean they have to physically “be” in Miami, rather one who knows our market and is successful in completing transactions in our city.

When I say, “most comfortable with”, often I am referring listening to friends and family who got this rate or that rate and then focusing purely on the “rate”. Or even worse, using some online service who promises you a killer deal but knows nothing about our local market. It is in my opinion not purely about the “rate” but also can they actually close the transaction? Because they can promise a great rate to pull you in but if you they cannot close the deal, what difference does it matter?

If none of these people is really experienced in our local real estate market in terms of mortgages and mortgage underwriting, it is my opinion the wrong advice. Don’t listen to them. Now, homes can be a little different scenario but condos are tough, and you need a skilled lender who is experienced in our market to help you.

Do they know what issues come up when vetting the building? Do they know how to mitigate those issues in advance? This my friends is key!

Buying a property and starting the process is expensive. You have earnest money deposits, inspection fees, appraisal fees and more. You need to be sure you are going into this with a fairly compentent lending partner.

I will preface this with, you should always seek the advice of an attorney regarding any contracts or contingencies. I am merely sharing past experiences.

First of all we are a heavy cash market for condominiums. We have been for many years. Although lending is possible, it can be a tough process for condominiums because of the “building aspect”. Lenders have a very detailed vetting process for condominiums and a lot of buildings in our area don’t meet those criteria. It is my experience that inexperienced lenders will tell you that they can lend in any building, but when you get down to the nitty-gritty of the deal, I have found they often pull out at the last minute leaving the buyer high and dry.

In most of our contracts if you need financing, there are financing contingencies built in. What scares me about inexperienced lenders is that they often issue commitment letters, which makes the buyer’s deposit go hard (not refundable). Then a few days before closing when underwriting reviews the file again, they find an issue and cannot close. This puts the buyer in a challenging position because it can cause him to lose the deposit unless he can find a way to get the lender to make an exception or find another lender to come in and close the deal.

In the video below, Jamey and Ognjen talk more about more about this and what you need to know.

Here are a few questions you should ask your lender:

• How do you get paid?
• How many deals have you closed in Miami-Miami Beach. **Not “your company”, Not “South Florida”, you.
• Ask for references or testimonials.
• Ask for names of buildings where they have closed deals.
• Is he/she reachable after 5 pm, the weekends or holidays?

Trust me. I have been doing this a long time. It’s worth it to vet your lenders in advance and hire a lender who knows our market and knows our buildings. They can be in Alaska for all I care, as long as they know what they are doing when it comes to buying in the condominium market in Miami. Lending for condominium is already a tough process to start, make the process better by using someone who knows what they are doing, especially when it comes to condominiums. After all your hard earned deposit could be at stake.