Imagine... you list a house for sale and start marketing it. While talking to your seller you learn that they purchased the home is 2003, have very little equity and will just break even on the sale. You also learn that since purchasing the home, they have taken out loans on two cars, accumulated quite a bit of credit card debt and had a baby so the wife is now working part-time, off the books. In addition, their credit took a big hit when the husband was out of work for nine months in 2007.
Since they are expecting baby number two, they would like to move to a less expensive neighborhood and get a larger home for around the same price. They have even budgeted for the same monthly mortgage payment. Sounds like a good plan right? Wrong.
You have done a great job pricing and marketing their home and they are in full contract in less than a month. They find a house they love and feel they can afford. Except, based on their new debt to income ratio and lower credit score, they cannot get approved for the new mortgage they want. They end up buying a smaller, less expensive home in their second choice neighborhood. And of course, they blame you. If they had gotten pre-qualified for a mortgage before listing their home for sale, they may have waited until their credit had improved or the wife went back to work full-time. They may have even decided to not sell their home at all.
Yes, you earned a commission on the sale. However, will these clients refer you or will they bad-mouth you to everyone they know? By getting pre-qualified for a mortgage before selling, they know exactly what they will be able to afford and exactly how much they need to walk away with after selling their home. Suggest that your sellers consult a mortgage broker before selling and it could save them from a rude awakening later or solidify their decision to sell. It also shows that you care about their end result and not just your paycheck.
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