REALTORS get to answer numerous inquiries from prospective buyers on any given day. Unfortunately, many are not taken as serious buyers, which may be why sometimes listing agents won't return calls requesting information. Some buyers start out having unrealistic expectations about what kind of offer they can make on a home that they would like to own "someday" in the future. What we are actually qualified to purchase, and what we "want to" buy are sometimes completely different properties.
Have you ever walked into an expensive store or business and known within minutes you didn't belong there? The feeling is the same when shopping for homes. Who really wants to look at homes, when at the end of the day everything is just way out of our price range? It always feels better to shop in a price range you're comfortable with and can compete in, should there be a multiple offer situation. In today's market that is a predominant environment we've been in, since FHA loans will go up to $697,500 in California now, as long as you qualify anyway.
If you're shopping for a home, here are 5 ways to show your agent, the listing agent and the seller that you are a qualified and motivated buyer:
1. Have you provided your qualifications to a direct lender before beginning your home search? With today's new loan standards, it only makes sense to run the numbers with an expert, and to start a home search in a price range you know you can afford. The seller and the agents representing each side of the transaction and the escrow company need to know that you are both financially qualified and motivated to consider the potential home of interest before spending time and energy on you. If you were a seller, would you want someone in your home browsing around that could not afford it?
If you cannot provide and submit a preapproval letter from a direct lender with your offer, you most likely won't be considered a prepared and serious buyer by anyone. It only makes sense to find out "how much home" you can be shopping for vs. "wishing you could move someday" with no plan in place. Do you really believe that in a marketplace where buyers are making "blind-offers" that there isn't a shortage of inventory in their price range? If you want to compete, then you really need to talk to a good local lender before beginning your physical search of homes. The worse that can happen is that you're really not ready to buy a home... at least you will find out from the lender what you have to do to get to that goal.
2. Do you have the required funds available to close escrow?
The typical home purchase requires at the very least 3.5% (for FHA loans) of the purchase price as your down payment. In addition, funds may be needed for closing costs, (which include property taxes, homeowner's insurance, etc.) and you will probably need some extra funds to make your ultimate home personally yours after you purchase it.
3. Have you previewed the locations of homes you're contemplating before physically driving by? In other words, have you used maps online to research on your own whether the homes of interest are near businesses, on a busy corner, near a freeway or backs to a canyon or a busy road? All of these factors will affect the resale value of that home, whether they bother you or not; it will come into play for the next buyer when you go to sell.
4. When you find the right home, are you prepared to make a realistic offer?
In today's market, many homes are selling for the full asking price because they are already listed near or below their recent sales comparables. If a home is a bank owned or short sale listing, it's already starting off in a weakened position. If your initial offer is less than 93% of the justifiable price, you will probably not be considered serious. Prospective buyers who put in "low-ball" offers to test the waters are usually wasting a lot of their energy and time, especially when there are already multiple offers involved. These buyers are usually investors with all cash or are often just "reaching" for more home than they can reasonably afford.
5. Is the offer accompanied by a good-faith deposit?
Homebuyers have to show they are committed by including as high a deposit as possible with their purchase offer. Customarily, and at the very least in today's market, a reasonable good-faith deposit is calculated at 1% of the purchase price at the time the offer is submitted.
There are many ways to show people you're a serious and committed buyer, but these are just the basics that sellers and professionals in the industry will be expecting...
In summary, be motivated enough to get preapproved by a good local lender.
Take your future seriously enough to make your home search a priority in your life.
When you have your preapproval letter, be realistic when making your offers.
Until next time, happy house-hunting!
Comments(1)