Can the Buyer Qualify to Buy My Home?
When a buyer makes an offer on your property, one of your primary concerns is "Where is the money coming from?" If the buyer is offering all cash, are the funds readily available? If the buyer is getting a loan, has he been qualified for this loan?
Getting an offer on your home is very exciting. You have advertised a product, someone has seen your ad and your product, and now wants to purchase.
Negotiating over price and terms could be an exercise in futility if the buyer is not qualified to purchase your property. You need to be given evidence of the ability to produce funds.
If you have a cash offer, ask for a letter showing where the funds are at present and have signed permission to verify the information. When verifying that the funds are indeed available, make sure that they will be available within the time frame of the closing of the transaction. We have seen deals fall apart because the funds were coming from a retirement account and some times would not be released for a substantial period after the scheduled closing.
If you are getting an offer where the buyer is getting a loan, again get written verification that a loan has at least been applied for and get signed permission to be able to talk to the loan officer and be given accurate information as to the status of the pending loan.
If you agree to a purchase contract, open an escrow account, and take your home off the market based on the pending contract, you had better know that the money is coming in a timely fashion.
There are no guarantees that an escrow will always close, but at least you can minimize your risks by due diligence.
You will find that not all shoppers for property will be pre approved by a lender, in fact many buyers have no idea what they can qualify for. If you ever get an offer from a buyer who has not even talked to a lender, Tell that buyer you will not start the negotiating process without at least a pre qualification from a lender.
You can enhance the affordability of your property by offering some financial aid to the buyer. This can be done in quite a few ways, here are some more acceptable proceedings:
Offer to pay for the buyers closing costs. This works very well for
properties that qualify for a government loan.
Offer to pay for a buy down of the mortgage interest rate. This
allows the buyer to qualify for a higher priced home.
Offer to carry part of the buyers down payment.
Offer to finance the buyers mortgage.
Offer to accept purchase agreements from buyers using
programs such as H.A.R.T, Nehemiah, or H.A.P.P. These
are financing programs which will ask you to contribute to
a grant program to help lower income families to attain
home ownership.
If you are in a position to offer creative financial assistance to a buyer, you will increase the number of potential buyers for your property and you will add value to your sale price.
If you have any questions about the loan process, call:
Frank Sweeney, Norwest Mortgage, (702) 367-8123
Jeannine Cutter (702) 283-8882 David Berg (702) 281-5827
