All of those people are connected to the bank. This is the general process after an offer is received, each bank has their own procedure and their own guidelines, some are easier than others.
1. The listing Realtor submits a package that is required by the lender. (Each lender has special specifications that are sent to the listing agent. (The listing agent had to get a signed paper that gives them permission to speak to the ownerâ€™s lender, without that they can do nothing. That is the reason the buyers agent or the buyer cannot speak to the lender directly because they do not have permission from the owner of the property to speak on their behalf). With that package along with many other items, the agent needs to send an estimated HUD-1 to let the lender know what the costs will be that will need to be paid through the escrow and this gives the lender the information to know what they will be netting with the sale. (How much money they will be receiving from the close of escrow).
2. Once the package is received it is check by an agent of the bank who makes sure all of the items that are required are in the package, if everything is there it is then assigned to another person who becomes the representative that the listing agent communicates to. (Sometimes called the negotiator).
3. Once assigned that person goes over the package and usually orders a BPO (broker price opinion), even though the agent has submitted one with the package that one is considered only as a reference and it is also believed by the bank to be a conflict of interest.
4. Once the BPO is returned to the lenders representative uses a formula to see if the offer will fit within their criteria (usually needs to be within 90% of the estimated value). If it does most of them then order an actual appraisal.
5. Once the appraisal is received then the lenders representative sends the work up sheet. They then make a determination as to what they are willing to accept based on the HUD-One, what they will allow to be paid through escrow and how much the net to their company and how much the loss they will incur by accepting this offer. They then send it to be reviewed by management or investors or both. All of this again has to meet certain criteria within the establishment that holds the loan.
6. Once the management receives the paperwork, they verify everything and go over the figures and then determine a final yes or noâ€¦usually this coincides with the representative has indicated that they think the management will accept, but it doesnâ€™t always, so as a listing agent we still are not sure until we get the final approval in writing from the lender. (And then it needs to be checked once again to make sure all of the numbers fit with what the lender has sent us.)
7. Once the management comes to a determination they will then give the representative an OK as to the acceptance of the offer and the representative will contact the listing agent and ask how fast you can close. Usually they want you to close in about 21 days. They will provide written approval after they speak to the agent identifying many times the borrowers name, the amount that the net that they will accept, and the closing date that this must all be completed by.
If there are two lenders (this is much harder because the first needs to give money to the second). This whole process is then completed by the second also and now you have to get two institutions to give you an approval. (Usually it is done simultaneously) If there are two loans from the same institution then it is not as much of a problem.
This is just a brief summary as to what takes place, hopefully it will help you and other buyers to understand the process and why it takes so long. One of the negotiators that I worked with had 300 files on her desk at the time she was working with me, so you can see it is a timely process and a lot of people are involved on the lenders end, as there should be, they are loosing a lot of money when they forgive the loans many times as much as $100,000.00 or more.
If you have any questions and I can be of help, please give me a call.
Diana Margala 909-945-5763