Why More M&As Is a Sign That Scale Is No Longer an Advantage

Terrific article on consolidation of business and growth of small business.  We are definitely seeing this at Northstone.  We have always been able to compete with the big box brokers but today we have even more resources at our fingertips and we are rapidly gaining in market share.  America has always loved the little guy so as a boutique broker we are even at a stronger advantage.

Avoiding Closing Delays

All of you who have dome a transaction with me have heard over and over "it is not over until it is over" but thee are things that you can do to avoid transaction delays and even transaction killers.  This artile is written for Brokers but gives insight into the transaction process that may be helpful...

Like a train, a transaction can get derailed at any point on the track. A closing can be hit by a clouded title, a home not appraising for value, a rapid change in interest rates, an undisclosed credit or income issue, or one of
countless other unanticipated issues.

Choke points cause delays and delays cause all kinds of problems for buyers, sellers, and agents. Moving plans get thrown into disarray. Interim housing or early-possession requests become necessary. Contingency plans need to be thrown together. Nerves get jangled. The resulting situation can be a nightmare even for the most seasoned agent, and a productivity killer as well.

Eighty percent of the problems in closing transactions fall into three basic areas. Stay on the lookout for these problems and solutions to steer your transactions clear of as much trouble as possible:

1. Documentation and verification: Lenders needs to assemble considerable paperwork and complete dozens of documents based on information submitted by the loan applicants. Then they need to verify all information for
accuracy by checking the applicant's employment status, funds on deposit, and income level. The document preparation and information verification process takes time. Counsel your buyers that if they fail to submit the required
information on a timely basis, or if they turn it in piecemeal and bit-by-bit, delays are certain to result.

2. Repairs, repairs, repairs: This is a chokepoint that good advance planning can avert. When you are representing the seller, state clearly in writing that only lender-required repairs will be done. If you don't, you leave
the sellers open to the risk that the buyer will come back with a laundry list of items.

A lender-required note usually limits repairs to structural, mechanical, or health and safety issues - with not a word about nicks in a walls or non-matching door knobs.

Also consider writing a dollar limit for repairs into the initial contract. The number isn't etched in stone, but it will help keep a lid on the potential amount for which your seller is responsible. The buyers may still refuse to lift the home inspection contingency until additional lender-required issues are dealt with, but the limit will help most of your sellers most of the time.

3. Underwriting of the buyer's loan: This is the stickiest of all closing choke points because the underwriter has complete power to approve the loan, approve the loan with additional conditions, or suspend the file until
certain conditions are met, in which case the borrower starts the underwriting process all over again.

Underwriters check to make sure that the loan meets guidelines for debt ratio, loan-to-value ratio, credit score, employment history, and other qualifications. They also evaluate the loan based on whether it can be bundled
with others in a big loan package that can be sold to Fannie Mae, Freddie Mac, or another entity that buys mortgages.

Very few lending institutions hold their loans to maturity. Most write loans, realize profits through origination fees, document preparation fees, and margins on basis points, and then sell the loans within 30 to 60 days, recouping the
loan amount to sell again as part of the next loan deal.

If the underwriter approves a loan that can't be resold, then the lending institution has to keep the loan in its portfolio. If that situation occurs too often, and too many loans can't be resold, the lending institution runs out of
money to loan, driving it out of business.

Of all the choke points in a transaction, the underwriting process can cause the biggest delays. Expect that there will be times when underwriters slow things down with requests for second appraisals or additional documentation of
value, especially if the home is in a high price range. Once you clear the hurdle, the documents can be drawn and sent to closing.


by Dirk Zeller

One for the money.. two for the show..

Free Microsoft courses extended through October 2012

If your employees use Microsoft software to conduct business, here’s a deal
you can’t beat.

Employment Security extended its contract with Microsoft to make the company’s entire suite of
online courses available for free to Washington residents through October 2012.
The offer is open to anyone of working age – both the employed and unemployed.

Businesses can use the free training to improve the computer skills of one employee, or even
hundreds of employees.

Registration is handled through local WorkSource centers. Visit to learn more or to request access codes. To contact your WorkSource center, visit and click the “WorkSource Offices” tab to view locations.