Welcome to our new monthly series Learning With A Lender!
Each month Guaranteed Rate Vice President Joel Schaub will be on the show to discuss anything and everything related to the lending process. Joel is in the top 1/10th of 1% in loan production at his company, and his insights on what brokers and consumers need to know about mortgages is incredible. In this first episode Joel discusses why property specific pre-approvals are critical (but most buyers and brokers aren’t aware they exist) and also how Fannie May and Freddie Mac are allowing (for some properties) a Property Inspection Waiver resulting in 8-9 day faster closings!
D.J. Paris 0:14
Hello and welcome to another episode of Keeping it real the only podcast made by Chicago real estate agents for Chicago real estate agents. My name is DJ Paris, I am your host through the show and today we are very excited to start a brand new monthly feature. We’re calling it learning with our lender and we have with us today. Joel Schaub from guaranteed rate and obviously guaranteed rate has an amazing reputation. They’re clearly if not the biggest lender, one of the biggest lenders in the country. And Joel is one of their top lenders. So let me tell you a little bit about Joel before he comes on. Joel is a vice president of lending at guaranteed rate. He has been doing loans at a high level since 2003. It’s gotten to that level because of what he does directly for agents. And he gives part of his commission back to the buyer on every single transaction. And last year alone. He gave back over $244,000 in closing costs to buyers who worked with him and that put his volume in the top 1/10 of 1% nationwide. So out of 370,000 loan officers in the country. Joel was ranked number 181 year to date through April 30. He has done 69 transactions again just in the last four months for just under 25 million in closing and he is here with us today before Joel comes on. I want to give you a couple of fun facts about Joel well first of all, great quote about Joe even if you know somebody at guaranteed rate you don’t know somebody who truly looks out for the client like Joel does, but some facts about Joel he currently has 13 billboards up right now in and around Wrigleyville. He’s the proud board member for real estate to the rescue which I am a big fan of as well. That’s a nonprofit for homeless cats and dogs in Chicago everyone should join real real estate to the rescue in you may have seen Joel on windy city poker and on NBC Sports Chicago. He’s also a proud sponsor with TV commercials during the celebrity charity poker show he is a Cubs season ticket holder went to 37 Games last season alone. i Let’s That’s enough. Let’s say hi to Joel so welcome Joel. I DJ, thanks so much for having me. We are We are so grateful to have you. And this was such a great idea to have have you on every single month. And so what would you so the purpose of this, by the way for all the listeners is to talk to our brokers we have 1000s of listeners and tell them what lenders wish they knew and more information so that they can better support their clients. So Joe, tell us a little bit about what you’d like to discuss today.
Joel Schaub 2:52
DJ write up from the beginning, you told the listener so much about me. And it’s really, it’s not about me, it’s about really giving back. And I really want to make this educational for everybody that’s on and making sure that there’s some great topics being discussed each week, and each time that we get together. So we’re really excited to be here today.
D.J. Paris 3:13
We’re really excited as well. And out of all the lenders that I’ve talked to you, we’re the obvious choice for the show. So thank you for your time, because I know you’re busy. So we appreciate it.
Joel Schaub 3:24
Well, let’s get right into it, I really had a couple of things that I wanted to discuss that’ll actually help agents that are out there. And it really comes down to talking about the pre approval letter. Okay, great. When agents get a pre approval letter, and they’re getting an offer, I always want to make sure that it has a property specific pre approval letter attached. Okay. So what this means is how often as an agent, do you get a letter from a bank as submitted with the offer, and it’s 30 days old, or 30 days old, you know, you always gotta call the lender and there’s 1000s of good lenders. It’s not just us. So this isn’t just a sales pitch for guaranteed rate. It’s literally there’s 1000s of great lenders that are out there. But there’s hundreds of bad ones, right? There just truly are right. And so what you really want to do is just pick up the phone and just get that lender that signed his name to the letter just to see, you’ll know the way the transactions going to play out in the first hour or two. Do they get back to you? Do they know the clients name? Can they pick up the phone and say, Oh, dismiss? Absolutely. I just got their pay stubs. I know exactly who they are. This one’s gonna go through no problem. And that’s kind of what you’re looking for, as an agent, somebody that will actually pick up the phone and answer that phone call. So that’s one of the best things. I could tell the listing agents don’t be afraid sometimes they say I don’t want to make, you know, I don’t want to make the phone call. And I say just make the phone call. Find out who that lender is, especially if you don’t know who it is. Okay.
D.J. Paris 4:59
So So what happens is, as a listing agent, they receive the offer, they see the letter, they reach out, what happens, what do you recommend someone should do, if they don’t hear back from that lender,
Joel Schaub 5:10
call me. That’s the whole point of this is you want to make sure that the letter is actually somebody that’s reputable, right? If it doesn’t have my property on, and I’m the listing agent, and if it doesn’t have my property address on it, it just says, Jim and Susie Q pre approved up to 300 grand, and it’s three to six weeks old, even if it’s a week old. So many different properties have different taxes and association dues, I want to make sure the lender knows this buyers submitting an offer on my place. And it’ll be helpful to get the lender on the phone, okay, and it doesn’t always happen. But the number one thing is you make two phone calls. And then you reach out to the person that submitted the offer and say I can’t even get the lender on the phone. Right? The number one thing you want to do is make sure that before you take the property off the market, for the sellers, that the financing is going to go through. So it’s just one of those tips that I like to have. Some agents do this all the time, when you know who you are out there, you really are good. You pick up the phone, and you ask the questions. And other ones are just kind of afraid to and I say don’t be afraid these lenders want your business. So you want to make sure that they’re actually doing some work for you.
D.J. Paris 6:25
That’s a really, really strong tip. And I’m so glad you mentioned it. And also the buyers broker should be doing the same for their clients, obviously. And you know, don’t as Joel said, don’t be afraid what no matter what side of the deal, you’re on to call that lender and say, Hey, is this still going to work for this particular property? And can I get a new letter? Yeah,
Joel Schaub 6:45
you got it right. You’re exactly right, especially now on the buyer side, you bring up a great point. If I have my buyer, and he’s got a great lender and the pre approval letter is set. Just make sure that before you’re submitting the offer, that the lender gives you an property specific pre approval letter, it’s going to make your offer go a lot smoother, right? So for example, yesterday at 530, it was a Sunday, I was able to get a pre approval letter turned around within an hour, they submitted an offer on a $1.5 million place. And at night, around nine o’clock, the listing agent just shot me an email saying, I got the letter, do you have any issues with this file going forward? And she was shocked that I actually picked up the phone and said No, I actually know the buyers, they’re perfectly fine. So this morning, contract was accepted. And my buyer beat out three other offers, because of my follow up to make sure that the listing agent knew the buyer was strong, the buyer can close in literally 18 days, they had a fast turnaround. And that’s the number one thing, you got to go out there and get a lender that works for you these. There’s tons of them that want your business. So find somebody that really works for you. And that will do these type of things on a Saturday or Sunday night.
D.J. Paris 8:04
Wow, that is such a great tip. What what percentage and this is an estimate, but you’ve you’ve been doing this for so long? What percentage of of letters that that, you know, are actually property specific pre approval letters? Oh, less
Joel Schaub 8:17
than 10%? Right? Yeah, no. It makes all the difference in the world. If I’m a listing agent, and I see three different offers, but this one has today’s date, it has my seller’s property address, and it’s got a lender that I’ve seen around town, don’t you think they took that right to their sellers last night and said, Okay, here’s the three offers, this one’s clearly the best. And she actually reached out and did her due diligence, which was great. And it made for my buyer, one happy buyer this morning, that’s for sure.
D.J. Paris 8:48
That is that’s a really great story. And so if you if you’re a listing agent, do not hesitate to reach out to the lender, which again, there are probably listing agents that have never thought to do that. So what a great idea.
Joel Schaub 9:01
Yeah, you just want to make sure that they you’re not looking for any real specific answers. What you really want to do is does the lender know the file? Are they confident that it can close? Nine times out of 10? You’ll get somebody that will say what, which file is this right? I don’t know. And really what you want is to go with an offer that you don’t want to go back to your seller three weeks down the line because the file couldn’t get complete with the lender. So you want to work with somebody you have some confidence
D.J. Paris 9:27
and well said, and I know you also wanted to talk about another topic.
Joel Schaub 9:33
So this is one that’s just an easy thing that a lot of agents have been calling me on lately. And it’s the Fannie Mae and Freddie Mac property inspection waiver. All right, what is a property inspection waiver? Well, right now, over 15 to 20% of files that we have a guaranteed rate no longer require an appraisal on a purchase. Oh, interesting. And let me say it again. That’s huge. 15 to 20% of purchases don’t require an appraisal anymore. How could that be? DJ? How is that happening? Right? It’s not risky, okay. It’s one of those things where I’m literally holding a note right now. And it’s a letter to the committee on House finances. And it says, we want to raise concerns that the new appraisal program where you’re no longer requiring appraisals could cause problems. And it goes on and on. And guess who signed by all of the appraisers?
D.J. Paris 10:37
You know, I would imagine they would be concerned. Yes.
Joel Schaub 10:39
So here’s what happened. There’s so much data now. We have literally hundreds of 1000s of appraisals on file in Cook County alone, okay. Multiply that over all the counties, Fannie Mae and Freddie Mac have a wealth of knowledge about what property values are. And currently, if you have a single family residence, condo or a townhouse, and the buyer is a standard 20%, down, good, strong quality, they accept the value on the contract. And what does that mean? It means that your property could close eight to nine days sooner. Yeah, sure. It means that the lender isn’t coming back and telling you I’m sorry, the value came in low. Isn’t it the worst? Yeah, absolutely. It’s absolutely the worst, you know that it’s not low. You just had a buyer and seller agree to the price, right? And the lender says, No, it’s six grand low. Now you have to go back to your seller and tell them they must lower their price or the buyer is going to walk away. So it alleviates all that. Okay. Now, a majority DJ of these files will not get a Fannie Mae or Freddie Mac appraisal waiver. Okay, sure. Under 20%. But boy, it’s one of those great things when you find out that the lender, right when the contract comes through that no appraisal is needed. And this has been happening since November of 2017.
D.J. Paris 12:05
Okay, yeah, we think that trend will continue. There’s just so much data,
Joel Schaub 12:09
right? Yeah, sure. If you have a single family residence that’s in the heart of Linkin Park, there are 567 comps, right on the same street, within the last year that have sold around the block. Okay. Makes perfect sense more so on condos as well. So they have all of these touch points where they know what the values are. And it allows for a buyer to complete a transaction right now sometimes in as little as nine to 10 days from the date the contract comes through with no appraisal needed. So
D.J. Paris 12:41
wow, that’s a that’s amazing.
Joel Schaub 12:44
So property inspection waivers, it’s one of those things that it’s a nice surprise, we don’t go in hoping for it or we won’t be able to tell until the file gets to the automated underwriting system. But it’s one of those things when I’ve gotten several phone calls, and we send out the notification, the file is clear to close and the listing agent calls and they go I don’t remember even doing an appraisal there. And I know we didn’t need one and they go You are amazing.
D.J. Paris 13:10
Yeah, that’s pretty cool.
Joel Schaub 13:11
I say I wish I could take all the credit for it. It’s not me. It’s one of the systems that Fannie Mae and Freddie Mac have come out with. So it’s one of those things that you know, you are excited when it happens, and you love to share that news. So I wanted to share that with the people that are on the podcast here today because it’s important just to work with somebody who’s passionate about what they’re doing. Okay.
D.J. Paris 13:37
Well, let’s let’s end with a derby party that you specifically are hosting. And I want to let tell the listeners all about because this is a truly remarkable party and I’m also going to try to attend myself. Tell us about it. Well, it’s
Joel Schaub 13:51
a big Cubs fan. As some of you guys know the Cubs fan mortgage man is hosting a party coming up right at Wrigley Field this Saturday. It is May 5. It’s at the new Brickhouse tavern. So if you look at the park and if you’ve been out there and you see the large jumbotron that’s out there now. Yeah, there’s a brand new Budweiser Brickhouse tavern. So we have prizes. There’s over 125 real estate professionals that have already signed up. It’s an amazing networking, you can bring a client, you can bring another realtor, and currently there are I don’t even want to tell the dollar amount of prizes. But it is one of those things where the top prizes are a 65 inch television, a round trip tickets to Las Vegas cubs tickets to Rose off the field and Apple iWatch and tons of giveaways and it’s something that’s fun. If you ever go to a restaurant or a bar on Derby Day, it’s always packed. You can’t sit down. This will be an opportunity to actually network and it’s all complem mentary. So it’s one of those fun things from two to six coming up on Saturday.
D.J. Paris 15:04
And if someone’s interested in attending, how should they get in touch
Joel Schaub 15:08
email@example.com. So we already have the RSVP list, almost full, there’s 25 spots left, it should be a good event for anybody in the Chicago area. So
D.J. Paris 15:21
if you if you’ve never done, yeah, if you’ve never been to a guaranteed rate party, by the way, especially one that Joel is throwing, their parties are legendary, and no one even comes close. Your holiday party is legendary. I think I think even last year or the year before, they had to add an extra night, because it was such a big event. And so if you’ve if you’ve never seen a guaranteed rate party, they are truly, truly exceptional. And Joel is just a really good guy. So definitely, there’s a few spots left. So that’s firstname.lastname@example.org, if you’re interested in he’ll let you know if it’s all full or not.
Joel Schaub 15:58
Okay, before you go, I just want to tell you, you guys are doing a really great job with this. I’ve listened. I like to say I’m a longtime listener first time caller. So you’re really doing a great job with this.
D.J. Paris 16:07
Yeah, and I by the way, I would like to, I would like to see how this came about. So I went to an event that Joel was one of the sponsors to for top producer magazine, which I write for and, and that was a really nice event too. And Joel was was kind enough to be one of the sponsors for that. And he came up to me and he’s like, I need to be on your podcast. And, and I will tell you, I was like you do and because he’s so passionate, he’s he’s all about giving back. He serves on boards. He’s a great guy loves to educate, we’re really, really excited and grateful that he’s willing to do this. So. And it’s funny earlier, and I just want to say something else nice about drawl. Before the thing I said, I really want to promote you and make sure we get your free, she’s like, don’t worry about that. I’m just doing this to give back. So we really appreciate that as well. But I am going to force the issue because I do want people to contact you. So if somebody wants to, you know, talk to you about rates or products, what’s the best way for them to reach you?
Joel Schaub 17:01
773-654-2049 Or they can reach me at email@example.com.
D.J. Paris 17:10
And if you look up in the sky anywhere in Wrigleyville, you’ll you’ll probably see him on many, many streets because he’s got billboards all over the place. So anyway, no, we like it. I think it’s cool. It’s
Joel Schaub 17:23
me, I really want to make sure this was beneficial for the people on the call and always bring something of value giving backs what’s really important. So if you learned even one thing on the call today, tune in for the next podcast because you guys are really doing a great. Well,
D.J. Paris 17:37
thank you. And that brings me to my final point, which is what questions do you have for Joel so that we can tee up some topics for next time, send us your questions, you can find us on Facebook, just search for keeping it real podcast. Our website is keeping it real pod.com You can submit through our contact form there. And of course you can listen to all of our episodes there as well as iTunes, Google Play Anywhere podcasts are served. So until next month, we will have Joelle on again and we will be discussing a couple of other topics and so until then, we bid you adieu, and Joel, thank you so much and remember his Derby party is this Saturday, so please reach out to him if you have if you have interest in attending and hopefully you’ll get in before it closes. So Derby at KL real sorry. firstname.lastname@example.org All right, Joel. Thanks again for being on the show.
Joel Schaub 18:29
It’s my pleasure, you guys.