Twenty-one percent of the National Association of Realtor members in January reported delays in contracts, and 33 percent said contracts fell through, according to NAR. The number of contract cancellations remains mostly unchanged from December.
The increase in the past year of contract cancellations or delays has been blamed on more lenders declining mortgage applications from stricter underwriting standards and low appraisals coming in under the agreed upon contract price. Source: National Association of REALTORS®
So what should you do before you buy to avoid a cancellation:
- Compare the Comps - Check out the prices of homes that are comparable in size and amenities in the neighborhood you are looking to buy a home. You can do this on the internet via sites like Trulia.com and Zillow.com. Remember, their information may be several months out of date. It is always best to consult with your Realtor®. We have access to the most accurate and up-to-date information on all neighborhoods in the area.
- Check Your Credit Report - AnnualCreditReport.com is the only government sanctioned website that can provide your credit report for free. Once your report has been sent to you, go over it thoroughly so you can identify and correct any mistakes you find. Mistakes do happen often. In order to get the best interest rate possible, you must have a credit score over 700. The lower your credit score, the more money you will be paying in interest. By clearing up any mistakes on your credit report, you will be able to get a better interest rate on your mortgage loan.
- Get Pre-Approved, Not Pre-Qualified - It takes just moments to get pre-qualified. But this doesn't mean you will be approved for that amount on a mortgage loan. By getting pre-approved, you know exactly how much you will be able to spend on your new home in Birmingham. Also, sellers are happier to work with someone who already has financing in place.
- Hire an Exclusive Buyer Agent to work for you - Christina Rickey, Broker of Home Search Solutions, is an Exclusive Buyer Agent who provides representation and assists home buyers with planning, locating property, negotiating price and terms, financing, inspections and much more. An Exclusive Buyer Agent is your best solution for wading through the complexities of real estate transactions. You will receive an unprecedented level of personal attention and hands on service. Your best interest is always a priority. Only an Exclusive Buyer Agent will be your advocate during the home buying process.
With a little due diligence on your part, you may find that you are able to buy the home you have always wanted!
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