Last year I was involved in a few transactions where the buyers used out-of-town lenders, and in all cases these lenders almost blew the deals for their buyers. Why do people use lenders outside of Colorado? Many high-end buyers prefer to purchase properties using their investment portfolios or by leveraging their relationship with certain banks and lender institutions. In most cases, these folks get a great deal on cheap money from the people who best know them and their finances.
The problem is some out-of-state lenders donâ€™t know all the ins and outs of Colorado real estate law. They arenâ€™t wreaking havoc intentionally; they simply donâ€™t know how the rules and regulations differ in Colorado from their home state.
That having been said, itâ€™s also true that not all lenders are created equal. Some are conscientious about meeting dates and deadlines, while others are less responsible. In case you havenâ€™t looked at a real estate contract lately, itâ€™s all dates and deadlines. So if you have a lender that doesnâ€™t stay on top of those dates, the whole contact process is going to be one miserable experience.
In todayâ€™s economic environment, you must select your lender wisely. Go local if at all possible. A local lender will be up to speed on not only the laws of the state, but also on whatâ€™s happening in the local market. Theyâ€™ll have better knowledge of the neighborhoods, comparables and appraisers that specialize in those neighborhoods. Some lenders even specialize in certain market segments, like those working primarily with high-end properties.
Who are these lenders? You can try asking your agent for a recommendation, but I also suggest doing some homework of your own. Referrals from friends who have had a positive experience with a lender maybe your best option, but before you take the plunge, meet with and interview at least three candidates. Find out how they operate and ask for some recent customers you can speak with.