You've listed your home for sale with your favorite real estate broker (that would be me) and an offer comes in within a few weeks of the list date. Yay! Now you can celebrate! Wrongo. Your listing agent has a very important task at that point in time and that's to make sure that the buyer is actually qualified to buy your home. "But I have a pre-approval letter signed by the lender of NoRipOffs Bank that says that the buyer is fully pre-approved for the loan". That piece of paper isn't worth the ink that was put on it to tell you the buyer is pre-approved by the lender. How do I know that? Because I've been around the block a few times when it comes to listing properties and I ran across a not-so-honest lender early in my career. He provided a pre-approval letter without doing any of the necessary steps that a reputable lender should do to pre-approve the borrowers. The sellers took their home off the market for the buyers and as you might have guessed, we then found out from the lender that the buyers weren't qualified. Luckily, we didn't lose much time while off the market and were able to sell very shortly after that.
So, how does a seller know if their buyer is fully qualified to buy the home? There's no way to guarantee they're qualified, but the listing agent can go a few steps further to ensure that the buyer will make it to the settlement table with the seller. Ask your listing agent (hopefully me) to add some of these items to the list of questions for the lender when you list and sell your Gaithersburg Home or North Potomac Home for sale:
- Have you verified income and funds to close on the buyer? Hearing numbers from the buyer and seeing them are two different things.
- Have you already put the buyers through Desktop Underwriting? Even better is if the lender's human underwriter has already given the thumbs up on the buyer.
- Have you already seen the tax transcripts on the buyer? Would be nice to know if the buyer is current on their taxes. More than likely the lender hasn't received the transcripts but the buyer has told the lender that they're current on their taxes and provided a copy of them to the lender.
- Have you received a written verification of employment on the buyer? It's possible that the buyer is relying heavily on bonuses that they earned this past year that might not continue in to the coming year.
- Are you going to be able to provide a full, written loan approval on the buyer within ___ days? This loan approval will usually have a few very minor conditions on it but you want to make sure that the lender will be able to send it to you in time for the buyer to meet his contract obligation with respect to the financing contingency. Sellers get very nervous if the loan approval isn't ready and rightfully so.
- Will this loan stay in-house for underwriting? This is important to know because things run so much smoother when the lender can walk over to the underwriter to discuss any little "hiccups" that need to be addressed quickly to keep the loan moving.
- Did you make sure that the buyer doesn't have a home to sell before moving forward with us? Seems like you shouldn't have to ask this, but some times the buyer agent doesn't know or understand that fact and if the lender missed it- look out!
- Are you going to be available via cell phone at settlement- just in case there's a problem? It's always a good idea as a listing agent to ask this because if there is a problem, the lender needs to be contacted immediately if there's any chance to settle on the scheduled day. I always ask for a cell phone number.
- Are you going to provide regular updates to me so that my seller client is assured that the loan is moving along as it should? I can be a bit of a pest when it comes to loan updates and I'm not shy about it. Brownie points for the lenders that provide regular updates without being asked.
- The lender is restricted as to what information they can/cannot provide to the listing agent. However, I have found that some lenders like to talk (a lot) and some times if you let them ramble a bit, you actually find out that the buyer is qualified for more- way more- than they're offering. That's a nice-to-know that we have an over-qualified buyer, but the seller just may decide to counter a little higher with that information in hand!
Selling Gaithersburg Real Estate or North Potomac Real Estate is my specialty and I'm available to answer any and all questions regarding pre-approved buyers.