Spokane’s housing market grew rapidly over the last few years and many people are looking to purchase. If that’s you, two of the first things you will need to seek out are a real estate agent and a national or local lender. Your real estate agent should be a residential real estate expert, familiar with the area and the market. With lenders, however, you have a choice: a national company that is a household name, or a local lender, who can guide you through the intricacies of the Spokane market.
Although you may be tempted to use a big, national company that is a household name, I would like to make the following case for using a local lender!
Why You Should Choose a Local Lender
Spokane has some specific nuances that national lenders may not be aware of. This could end up costing you more money and time than if you choose a local lender.
No Termite Inspection Necessary
In one VA transaction we worked through, dealing with a lender that was not local, the LO (Loan Officer) was told that we needed a termite inspection by the UW (Underwriter). This seemed odd to me since I had not dealt with a termite inspection in Spokane before.
After several calls to local pest inspectors, we discovered the reason was that Spokane is not known to have termites (in most areas) and none of the local pest control experts offered termite inspections. It took about a week of back and forth with the LO, the UW and probably a few managers and processors in different parts of the country to find the “fine print” that excluded certain areas (including ours) from that particular loan requirement! We got through it (and a few other challenges) but this caused our closing date to be delayed, which nobody likes – and which could have lost the deal for those particular buyers!
Then we have title insurance. Title insurance shields you from the ghosts of owners past. When you have title insurance in place, previous issues related to the property, such as a person claiming the house was promised to them by their Great Aunt Louise, won’t come back to haunt you…. Or, if they do, there is insurance to cover the issue! Once you take ownership of a property, the title insurance protects you from such problems.
While most lenders require you to purchase title insurance to protect the lender, in the Spokane housing market, there is a distinct difference. If you are buying a home, the seller will typically pay for title insurance for you, the buyer. That is your protection. You then pay for a policy for the lender.
In other areas of the country, the buyer will purchase a policy for the lender but there is no policy provided by the seller.
Even home warranties are treated differently in the Spokane market. In many markets around the country, the seller paying for a home warranty for the buyer is commonplace. But in Spokane, it is more of a negotiation point than a routine part of the selling process.
As a buyer, a home warranty included with the purchase of your home is ideal. If surprise issues arise after the purchase, you’ll be covered and the cost to you will be minimal compared to having no coverage. A home warranty also serves as additional protection for the seller post-sale. In the event something needs a repair, the buyer has the home warranty to use instead of coming after the seller for the funds, claiming the seller knew there was an issue but chose to ignore it.
Even if the Seller does not provide a home warranty, the buyer is able to elect to purchase one for themselves. In my experience, if you are likely to buy a warranty for your bigger electronic purchases (TVs, etc) than you are likely to appreciate the comfort of a home warranty. I have some clients that buy a new home warranty every year!
If you do choose a home warranty, your realtor or your local lender will be able to provide guidance on home warranty companies they trust in the area. A national lender may not have the same insight.
Note: A home warranty covers your appliances and the mechanical components of your house (such as your furnace or electrical) in the event they fail. This is different than homeowner’s insurance, which covers damages caused by things like floods or fire. While a home warranty is not required, it can be a wise purchase.
Small Differences Can Make a Huge Difference
Did you know that the Spokane County courthouse closes at noon on Fridays? If you don’t work at the courthouse or spend time there often, it might not occur to you that processing closing paperwork on a Friday isn’t always ideal. Your local experts know that, though, and will work with you to ensure that your closing goes as smoothly as possible – preferably on a day that isn’t Friday. Of course, we inevitably have deals that have to close on a Friday and we always figure it out, but knowing that ‘the squeeze is on’ if we’re closing Friday could be the difference between having a great weekend of moving into your new home or finding a hotel room while your stuff sits in a moving truck over the weekend!
Choose a Local Lender in Spokane
Of course, there are many other local vs. national differences, but you get the idea. Working with a local lender (and agent) allows you to receive guidance specific to the Spokane area and your needs. Want help choosing a lender? I’d love to chat with you about your goals and put you in contact with the right financial professional. Contact me today!