The lovely world of multiple offer situations creates the question of how mortgage lenders should write a pre-approval letter that doesn’t compromise their clients’negotiating power. One school of thought is to state how much the buyer is approved for, while another says only list what your client is able to spend.
My feeling has and probably always will be to state in the pre-approval letter that a purchaser can qualify for more than the homes they are looking to purchase. A person might say “ Won’t a seller use that against the buyer?” Only if the purchaser and the purchaser’s Realtor will allow it.
I have always told the buyer, “ I can afford to pay $15 for a gallon of milk but I won’t.” The same goes for houses and mortgages. Many people were left borrowing more than they could comfortably afford prior to the housing bubble.
We are seeing multiple offers again, but this time the buyers are going to be a little more cautious, so let the sellers see how strong the buyer is and don’t worry about being too strong of a buyer for a certain home. It’s a good life!
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