Don't let those people into my house!

In a market where buyers have been almost non-existent for several years, is this such a strange thing for a seller to say? You would think after their home has been on the market for months, and sometimes even years, they’d just be happy to have a warm body walk through their door. But actually, after so much disappointment already, this is a really smart thing to  not just ask, but demand. And that should go for every buyer agent and listing agent too.

When I list a property, more often than not the sellers have already been on the market and failed to sell. Yes, I make a living out of selling previously expired homes. Understandably the majority of my clients have had a pretty miserable experience in recent years. As our market here in the Hudson Valley of New York slid downhill dramatically, the prices home owners hoped to achieve on the sale of their homes also dropped drastically. Most expired listings had owners  holding out stoically hoping for better times, yet seeing their equity dwindle with a good many going into distressed scenarios. As we continue to bump along the bottom, with only the lower priced properties seeing an upswing to date, the media extols the cry that “The Market is Back, Bidding Wars are Back!!” It's a hard thing to see when in general our market isn't yet feeling this wonderful resurgence. Yes the buyers are back, but a fair amount of wannabe buyers are back too.  Those along with wannabe mortgage lenders are all desirous of a piece of this well-advertised "Best Prices Ever at Historic Low Interest Rates," pie. Young couples a-plenty come knocking at our doors, waving their pre-qual letters, eager to jump into home-ownership. But hold your horses, don’t be so sure of those flimsy bits of paper. They can be exceedingly deceptive, and in general really aren’t worth the paper they are written on.

Unless a mortgage originator has had the time to do a complete review of the buyers income and assets, then all they know is what they are told by the potential buyers, and that could be a whole load of baloney, or just that certain facts had been forgotten, or conveniently avoided, let’s say. In everyone’s excitement to get the deal done, no one actually checks the FACTS. A letter is drawn up, forwarded to the sellers agent, who in turn presents the offer. This offer is excitedly accepted by the sellers. And why not? After all, the price is right, they have a deposit and their bank says the buyers are qualified. So costly engineers inspections are done, attorneys are hired, contracts are drawn up, escrow monies are deposited, sellers start their moving plans, and guess what happens next?

The mortgage underwriter nixes the entire thing.

“Nope, no money for these folks, sorry!” So the anxious buyers try another lender, and sometimes even another….But the results are the same. NADA!

What a waste of time and money for all parties. All of which could have been avoided had the agents involved insisted on what has sadly now become a necessity: A pre-approval letter that clearly states that the potential buyers Income and Assets have been Reviewed.  No more calling your pet mortgage broker excitedly “I’ve got some buyers and they want to put an offer in! I need a pre-qual fast!!” Well, OK, if you want to waste a lot of time and other people’s money you might do that, but I personally wouldn’t spend a dime on gas and time, on a buyer that hasn’t got the correct paperwork before I even show them one home, and I heartily agree with my sellers that request the same.

Ralph Waldo Emerson, American essayist and poet, once said that the future belongs to those who prepare for it. This is sage advice for home buyers who need to lay the necessary groundwork to buy the home of their dreams.

If you are considering buying a home in the Hudson Valley and need to get a true pre-qualification showing how much you can afford to spend, I suggest you contact Barry Goldenberg of Luxury Mortgage. That way you can be assured of buying the home of your dreams when you find it, and avoid a costly mistake and a lot of disappointment all around.

originally posted at Please don't let unqualified buyers into my house