It’s fun to visit open houses on the weekends. You may be picturing yourself living in the home, enjoying the backyard or perhaps making a few home improvements to really make it “yours”.
If you’re even thinking about buying a home, I strongly encourage you to get fully preapproved before you find yourself at an open house wanting to present an offer.
Here are some steps I recommend for anyone considering buying a home.
- Remove your contact info from trigger lists. The credit bureaus re-sale your information to strange lenders once your credit is pulled. It’s a disgusting practice that they’re making bucks off of your personal data. You should have the option to submit yourself to this practice instead of having your personal information sold. You can remove yourself from trigger list – it’s not hard to do and well worth protecting your privacy.
- Contact a mortgage professional to answer any preliminary questions (you may find some answers on my blog – if not, let me know – I just might write a post to answer your questions!). The mortgage professional can help prequalify you without running your credit or obtaining your financial records. They should be able to provide you with a rough idea of what you qualify for as far as payment and down payment while addressing your home ownership goals. This can also help you decide if you want to proceed with this person to help you become preapproved.
- Get Preapproved! Getting preapproved is the next step and I recommend that you go a step further and make sure that you’re actually pre-underwritten. This means that an actual underwriter has reviewed your application, supporting documents and has issued an approval (subject to the property). Even though I have been helping people with buying homes and loan approvals for over twenty years, I still take the next step by having an underwriter issue an approval. Not only does this help your loan close faster; it also makes your offer on your next home stronger when the seller and listing agent know your loan has the underwriter’s approval.
- Select your real estate professional to represent YOU as the BUYER. In my opinion, you are in a better position when you work with a buyers agent BEFORE you start visiting open houses. Listing Agents represent the seller and it’s their number one job to sell the home and to lookout for the seller’s best interest. If you utilize the listing agent to represent you as well or to submit your offer, you may be putting yourself at a disadvantage as they represent the seller first. If you wind up with any issues with financing, employment or perhaps you ‘d like the seller to contribute towards repairs or closing costs; you’ll be in a worst position than if you have a different real estate professional represent you as a buyers agent. I happy to offer recommendations. 🙂 PS: I also think it’s important that your mortgage professional is not acting as your real estate agent (and vice versa).
Once you’re preapproved and actively looking for your next home, it’s important to keep your mortgage professional informed. I like to provide updated scenarios for my clients with current mortgage rates (mortgage rates change constantly) and the home’s property taxes. In the event of a possible bidding war, I can review different price points for the home with my clients.
In a highly competitive market, like we have been experiencing due to the lack of inventory, a “cash buyer program” may be worth considering. This allows buyers essentially make a cash offer on a home. It’s similar to having a rich relative buy the home for you and then you buy the home back from the relative after closing. Recently the National Association of Realtors reported that over 30% of offers on homes are “cash offers”. Sellers tend to prefer cash offers as it removes the financing contingency and allows for a very fast closing.
Of course, if you are considering buying a home, whether it’s your first home, move-up home, vacation property, investment or transitional home, I am honored to work with you!
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