My blogging colleague Greg Nino from Texas has a few words of wisdom that I want to share with all of my clients, friends and potential clients in Southwestern Illinois.
If you're selling and also planning to buy, get that lender pre-approval right now. You don't want the same kind of nasty surprise that Greg's sellers ran into.
A couple of years ago I listed a home and sold it. The sellers were interested in buying another home in the area. Against my advice they decided to wait until they "sold" their home before talking to my lender. They were convinced their high credit scores and strong income would be more than enough to qualify for a home. The mere discussion of "getting approved now" bothered them. As if I was going to miss out on a free set of steak knives if they didn't go and get approved now or something.
A week before we closed on the their home they called and asked me to "tear up the contract" because they couldn't get approved with "their lender."
Unfortunately for these sellers they learned the hard way.
One of the spouses was self-employed. His AGI (adjusted gross income) was only 10k a year. At best, he could qualify for a set of steak knives from Sears. The majority of self-employed people write off A LOT of their income. The other spouse in this situation had a car that she co-signed for that wasn't being paid on time by one of her relatives. This hanging liability prevented her form being approved as well.
The sellers didn't have the option to just not close. The buyers could have sued them for specific performance. The sellers moved to another state and had to lease a home.
Regardless if you have excellent credit you should get yourself pre-approved before selling your home. Minor changes in your loan application could kill your chances of getting a home loan.
The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.