Congratulations on finding the home of your dreams and making it through the offer process. Now comes the challenging part – getting through the loan approval process.
As soon as your offer is accepted by the selling party, your loan application will go in to the underwriting approval process. This could take as little as two weeks and as much as two months and is often the most stressful part of the home buying process for the buyer. Unfortunately, most buyers will now begin to hear scary stories from their friends and family, based on their own experiences with the lending process. Scarier still, the idea of having to find temporary housing or putting your belongings in storage if/when the loan does not come through on time. Fear not! There are some tips and ideas that you can look to so that you can get through the closing process as quickly as possible.
First, know how much you can spend on a home. The lender will tell you how much you should qualify for but it is important for you to also look at your monthly budget and make smart decisions. How much are you paying for rent now and how much more can you feasibly stretch for a mortgage?
Second, know your credit score and be aware of any credit-related challenges you may face. There are several free resources to go to when pulling your credit report. Be sure to do this well in advance of applying for your home loan.
Provide your financial information as soon as possible and be honest about anything that may be seen as a red flag to lenders. If you know about it, they will soon know about it and it is better to head it off early.
Turn over paper and electronic copies of your financial documents, including recent tax returns, bank statements, title work for vehicles and other property, etc.
Be in constant communication with your lender and their team. Asking if there is anything else you can provide and being proactive may prompt them to move your file along faster.
At the end of the day, you will have to rely on this team of professionals that you have chosen to work with to get your loan application to approved status and on to the closing table. With that said, being prepared and organized will go a long way towards getting this done on time and with the best results.
In today’s Internet age and with such easy access to information, it is easy to see how the average consumer could feel comfortable handling a real estate transaction by themselves. With that said, it makes perfect sense that they would be a little nervous at the idea of negotiating the home price in this turbulent economy! The art of negotiation is a tricky one and having a firm grasp on it can be the difference between a great deal and several thousand dollars out of your pocket unnecessarily.
The first hurdle in negotiating: Be prepared with the right data
The most important information you can have when preparing an offer is a CMA or Comparative Market Analysis. A CMA is an analysis of the most recent pricing of “like” sold homes in the area. While there are many places for you to find a small part of sold home information online, only a licensed REALTOR can provide information on everything involved in the transaction, including credits to the Buyer, commissions paid, etc. Most importantly, a real estate agent can make sure the homes included in the analysis are the best matches to the home of interest and also speak intelligently to the impact of local short sales and foreclosures in the immediate area.
The second hurdle in negotiation: What is the Seller’s motivation?
Once you have handled the question of price, it is pretty important to figure out what is the reason behind the sale? When you are a lone Buyer handling this process on your own it can be hard to pick up the clues and figure out what is going on. A trained real estate professional can usually shed some light on the story by having a series of conversations with the Selling agent. In most situations, a Selling agent is not likely to relay this information to an un-represented Buyer and furthermore, they are not required to do so. Why does motivation matter? You need to know if you are dealing with a “must sell” or “would like to sell” situation.
The final hurdle is time: Be respectful of others’ time and your own.
You may be quick to think that presenting a low ball offer is the best way to see if a Seller may bite. In fact, it is the fastest path to making them believe you are not a serious Buyer and will only delay the process. At the same time, Sellers who are unwilling to make concessions based on the market comparables may not be serious Sellers, either. In real estate, every minute matters when it comes to getting the home you want under contract. Don’t waste your time or others with offers that are not reasonable.
Negotiation is an art and a science. Licensed REALTORS have the skills and experience to guide you through this process. As a Buyer, this representation is free to you in most cases, so why not make it easier on yourself and possibly save yourself some money in the long run?