Alright – this isn’t me giving you a “hang in there, things will be back to normal soon” speech. No fluff, just real solid advice, and it has to do with the state of financing a mortgage that affects both Buyers and Sellers for all property types. From homes, farm, and ranch, to commercial.
Sellers: Demand Current Pre-Approval Letters
If you currently have your property for sale, your listing agent should be presenting offers to you with a Buyer’s pre-approval letter for financing. (For more details on the pre-approval process read my article on The Home Buying Process). Here is the important part. The pre-approval should be recent. As in, a week or two recent. Why? Depending on the type of loan the buyer is counting on to purchase your property, the qualifications have tightened up over the last several weeks. This means if their pre-approval letter was from 6 weeks ago, it is possible they may no longer qualify.
Over the past month, when I have been told by a Buyer’s Agent that their client is going to be making an offer – I ask them to make sure the pre-approval is current. This way before the seller even sees the offer, we know that the buyer’s financing is secure. Trust me, it is better to know upfront if the buyer is qualified before they figure it out a few weeks into the transaction.
Buyers: Keep Your Lender on Speed Dial
I don’t mean call them all of the time to check-in. What I mean is, take the time to talk with them and really understand how and what your qualification means. What is your credit score? What type of loan am I trying to get and have those qualifications changed? What are my financing options if I can no longer qualify for that particular program? The main takeaway is to simply be prepared. The last thing you as a buyer want is to find your dream home and miss out on it because there was a change in your qualifications that you were not prepared for. I have seen it happen. It is heartbreaking.
If you are working with a Buyer’s Agent, then they should be having this conversation with you before you make an offer. If they have not – please take the initiative to contact your lender to get ahead of the game.
Yes, interest rates are low and it is a great time to buy. Lower rates help increase your purchasing power. Don’t be discouraged buyers! Be knowledgable of the current state of financing and stay in touch with your lender.
Hang In There
Yes, I said it. We are all trying to ‘hang in there’. We are in challenging times, to say the least. Lately, I have been getting asked: “Are prices going to go down?” “Are rates going to stay low?” “Are buyers disappearing?” “Are sellers wanting to get out of their house quickly?” The answer is simply, I do not know. No one does. Only time will tell. Hang in there.
-Cori Radley, Broker/Owner
Cori Radley & Co., LLC