When you're dealing with Baltimore area real estate - whether it's property management or selling and buying a home - going local matters. Local experts know how to deal with situations specific to the area; they have knowledge and resources that can help you make the right decisions.
As Jennifer Orner (see Lending Expert Tips On Credit Reports & How To Qualify For A Mortgage, loan officer with PrimeLending and based in Timonium, Maryland, explained to me,
"I have a buyer who made an offer on a home in Anne Arundel county and was competing against 3 other offers at the same time. The listing agent called me to get a feel for how well qualified my buyers were as he weighed their offer against the other 3. One of the questions he asked me was “Is your underwriting, processing and closing done in-house?” I thought that was such a smart question to ask because it absolutely can make a difference. He knew my address was a local one from the pre-approval letter that I’d sent, but he wanted to make sure I wasn’t a broker who was going to send the file out for underwriting and potentially “lose control” of the process...."
I asked Jen to share more perspective on why going local matters especially when buying a home.
Why Going Local Matters When Buying a Home: Interview with Jen Orner
Linda: Why does local matter in real estate, especially for the Baltimore Area?
Jen: Local matters in real estate because local loan officers and underwriters can deal with issues that are specific to real estate in Maryland without holding up a loan file.
For example, we use local appraisers who know the neighborhoods in the area and what the most accurate comparable sales are. I worked for a bank in the past that used a national list of appraisers who were randomly assigned to appraise homes in the area. It was a huge problem when an appraiser from say Washington DC, who was licensed in VA, DC and MD but physically based out of DC, would come to northern Baltimore county to appraise a home. He just wasn’t familiar enough with the area to do an accurate, thorough appraisal.
We have issues with ground rent here in Maryland. Many homes in Baltimore City and County are leasehold properties – they have ground rent on them. It is not unusual for me to get a phone call from an agent who has a Baltimore city loan being underwritten out of state which can’t be approved because it has ground rent.
We can handle things that are unique to this area. Keeping a loan file in-house from start to finish allows us to work on a file all the way through from loan application to processing to underwriting and closing with people in our office whom we know and trust.
Linda: Why is there a concern with sending a file out for underwriting? What does ‘losing control’ of the process mean?
Jen: When you send a file “out” for underwriting to another location, there’s concern that you lose some control over the file. So if an underwriter picks up a file and is confused about some piece of it, rather than asking you and working through the file together, they’re more likely to deny or suspend the file.
With in-house underwriters we can run a scenario by them before even submitting it for approval so that we have their opinion on how to document any issues thoroughly and they can see and understand the scenario first-hand instead of over the phone. Being able to explain and show them documentation in person is a huge advantage toward helping everyone involved in the process understand the file and making it run more quickly to settlement.
Linda: How can someone looking for financing find the right local lender when they may come across national / online based resources first?
Jen: People should use national/internet resources as guidelines not as the “final word” on rates.
Interest rates are quoted based on a number of factors that have to be determined first, including credit score, debt-to-income ratio, equity or down payment, loan product (conventional, high-balance, jumbo, FHA, USDA, Maryland Mortgage Program or VA), loan term (30, 20, 15 or 10 yrs), and loan type (purchase, rate & term refinance, cash-out refinance, or streamline refinance). Rates are not just one-size-fits-all, so finding a 30 year fixed rate on the internet may not be the same as what you’d be eligible for once you speak with a lender and have credit checked, income verified and discuss which loan program might fit your needs.
To find a local lender, a referral from a real estate agent is the best, I believe. Agents work with many, many lenders over the years and know which ones are responsive, honest, smart and get the deal to settlement on time with the least amount of hassle.
Friends and co-workers can also be good resources.
I find that more and more people want to do it on their own on the internet though – using random referrals from online home search sites or from online blogs. Those are fine places to look, but you can get burned if you don’t dig a little deeper and get a personal referral to a local lender.
Linda: Jen, what other local resources matter to the process of buying a home in Maryland?
Jen: Local appraisers are imperative. You want someone to assess the value of your house based on other similar homes in the area and you want an appraiser who is intimately familiar with the neighborhoods, school districts and values.
That’s important when you have neighborhoods that run into each other – knowing that values are different in Federal Hill is important when comparing a house in Locust Point, even though the zip code might be the same and the neighborhoods may easily run into each other. Knowing that values of homes north of Owings Mills Blvd may be different than those south of Owings Mills Blvd is important when evaluating a similarly sized and updated home.
Where people want to buy drives values and appraisers have to be very experienced in the areas where they’re appraising. Buyers can’t choose their own appraisers; however, local lenders will usually use local appraisers.
Of course, you want to use a local real estate agent – that goes without saying – and a local title company who will be flexible in doing the settlement at a mutually convenient place and will also know all of the local nuances, like how to deal with ground rent, which is unique to the Baltimore area.
Linda: Thanks, Jen, for helping us understand how important it is to go local!
What's your experience with going local? If you're thinking about buying a home in the Baltimore area, let us know. We are locally based and know the market (see 3 Reasons Why Yaffe Real Estate Got Started In The Baltimore Market).