Managing Jumbo Loans As A Team For Mutual Success

There’s a reason everyone in real estate gets excited when a jumbo loan is involved in the transaction. Unlike conforming loans, which are currently capped at $548,250 for 2021, jumbo loans can easily creep above $1 million and beyond. Even with only a few points of commission, any realtor or loan officer would be foolish to turn down an opportunity like that!

But bigger opportunities mean bigger risks. Working on a transaction with a jumbo loan means there’s no room for error from anyone involved. One single slip-up could send the loan officer packing or the real estate away to find a new client.?

That’s why it’s critical to work together.

Staying Focused?

We all need to be careful when working with jumbo loans, especially in a region like Pittsburgh, where inventory is currently low and housing prices have historically been relatively affordable. Even now, when housing prices have crept up as a result of COVID-19, many of us in the industry see few opportunities to actually work on a jumbo loan transaction.

And that’s why it’s so important for the transaction to go smoothly.

The buyers who use jumbo loans tend to have flashier cars, nicer suits, and, more importantly, more influence throughout the community. As financially successful individuals, they tend to have large networks.?

Your performance as the real estate agent or loan officer directly influences how they talk about you to their network. Give them a great experience, and you could unlock dozens of referrals in the future. Give them a bad experience, and you could shut yourself off from a flurry of inquiries—and potentially leave significant future earnings on the table.?

Tapping into that network is important because the competition in our region is stiff. In Pittsburgh alone, you’ll find companies like PNC, First National Bank, and Huntington Bank, all of which offer competitive loan products to wealthy individuals. Without a steady stream of high-value referrals, many loan officers are left competing against organizations with deep marketing pockets that already have a reputation for working with high-earning professionals.?

For realtors, the competition is just as difficult. Companies like Sotheby’s tend to specialize in high price tag homes, and that focus on high-end homes squeezes the other real estate companies out of those big opportunities.

Capitalizing on Jumbo Loans With Greater Flexibility

Trust, skill, and communication are critical in complicated transactions where the profit margins are extremely healthy.?

Although institutions like PNC, First National Bank, and Huntington Bank offer flashy products at excellent rates, their teams tend to stick to rigid schedules and processes, which makes them less flexible.?

But as we all know, the real estate and mortgage industries never stop.?

The banks might close at 5:00, but scrappy loan officers take calls at all hours of the night—and that’s where a smaller lender can become invaluable in the transaction.?

With a local lender like Holland Mortgage Advisors, for example, many of us will take your call at 8:00 PM to check on your loan, and we’ll reply in a timely fashion.

You might also be surprised by the competitive products the smaller operations can offer. Holland Mortgage Advisors’ Physician Loan, for example, offers 100% financing for doctors who use jumbo loans.?

It’s the same in other places, but you won’t know until you work to form those partnerships with other members of the industry.

Combining Forces

When jumbo loans are involved, clear communication between all parties is a must. Real estate agents, loan officers, and title agents should be especially respectful and conscientious of everyone involved so the deal goes through.?

And once the deal closes, we all win.

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