Have you spoken to your lender?
Communication is key between home buyers and lenders
Last week, our seller focus took us on a top ten countdown to selling your home. In the article, we learned that it takes a well thought out plan to sell your home. There are so many things to consider to getting you the highest selling price in the least amount of time. This week we will focus on home buyers and the importance of speaking to the lender BEFORE starting to going out and look at homes. Imagine finding the home of your dreams only to have it slip through your fingers because of another offer being accepted over yours. This is exactly what would happen to those not prepared to purchase already having a clear plan.
Preparedness avoids a rocky road
In many cases , sellers have to go through a tedious lengthy process and have time and money invested into preparing a home property for the sales market. The last thing they want to do is accept an offer and watch that deal fall through. Not only is this a waste of time for both parties, it makes it that much harder for the seller to obtain the next home buyer. It always leads to questions… “So, this home was in escrow? What happened? Why did it fall through? What’s wrong with this house?” Of course we as home sellers try to do our best to explain there was nothing wrong with the house. We attempt to elaborate that the buyers could not get financed. However, there is always that cloud of doubt that develops over head and buyers become soaked with it. So, a prepared buyer is one who has a clear plan.
Making your Plan
A major part of that plan comes from the question “well if you are not paying all cash, then how are you going to finance the home?” This seems like a simple question however you would be be surprised how many buyers out there skip this first step. They are just browsing the streets and probably not going to find the home of their dreams while just out and about. As the propective home buyers drive around they pass an open house sign, “Honey, stop the car.Do you see that home? It looks perfect. I mean I love this area.” They get off and thankfully it is an open house. Once inside the home, they immediately love it; “OMG, look there is a workshop, and a three car garage! Oh, it has 3 bedrooms and 2 bathrooms and it even has that perfect office space we need.” The home buyers excitedly confirm that the house near their child’s school and a short commute from where they work. There are two questions that always ask early on during my open house conversations. One is. “Are you working with a broker?” and the second one is “Have you spoke to your lender?” The response I usually get is “Oh no we are just looking, we want to buy and we have been looking for a few weeks but we are not ready to talk to a lender yet.”
The knowledge to have before hand
There is a wealth of knowledge to be gained beforehand from your lender. This can save you time and money. Also, obviously selecting a Real Estate professional early on in the process is crucial. Buying a home is already stressful enough. To not have a clear plan before driving around the neighborhoods looking at open houses is just a waste of, say it with me, time and money. If you don’t already have a lender who you want to work with to buy your home then it is critical to select your Real Estate Professional. Always have someone like myself who can guide you through the process from start to finish. I am very easy to contact and will be more than happy to help you if you have any questions about getting started.
Types of loans and how having an agent can help
One of their first tasks is helping you determine the right lender to help you as a home buyer. Real Estate agents such as myself tend to know the local mortgage professionals who in turn know the market and how to navigate this process to ensure your success in buying the home. Loan programs or plans come in great variety; they are not a one size fits all type thing. They are very specific and tailored to home buyers. What might be perfect for one person may not be the right fit for another. There are many factors that go into determining the right loan program for your situation and goals. For example, if you are a veteran such as myself then the VA loan program might be the perfect fit for you if you don’t have much money for down payment. Another great program to save on the upfront costs might be an FHA mortgage. Or, you have more money to put down and you can get a better deal on your rate and / or your payment with a conventional mortgage. The amount of money you can borrow and thus which home you can actually purchase will vary greatly on all these factors and many more.
I must press the point
I cannot stress to you enough, when you hire a Real Estate professional early on, your chances of being prepared when you find that dream home are greatly increased. As teh home buyer, you don’t pay any more in commissions if you hire me a month from when we find your home, than if you call me from the front yard of a for sale home you are standing in front of. However, if you have been working with me for a period of time you are going to be fully informed through out and have a clear plan to purchase your property. If you are ready to write an offer and standing in front of a “For Sale” sign chances are you simply are not prepared, no clear plan, no pre-approval letter from a lender and your chances for success of actually buying this home are greatly diminished.
The dangers of not having a plan
If you are even just thinking you may want to buy or sell your home, one of the most important steps is to select a real estate professional and then let them guide you from the “just thinking” stages I know it’s counter to what we have learned. As I had mentioned in a my article for first time home buyers, many of us only have our experience of buying a car as the largest purchase in our life before buying a home.We know that buying a home is much different than purchasing a car. When you buy a car the dealer can really care less if you have a plan, they prefer you don’t have a plan. They get you excited about the car first and have you ready to buy it. Some even go as far as to let you drive the darn thing around town. Then ,they will find a way to finance you. This is usually at a higher rate than if you had planned ahead. Employees of the dealership work for the dealer not you, they are not obligated to have your best interests in mind.
Real Estate agents should work only for the home buyer
However, real estate professionals work for YOU. You are hiring the real estate professional to work for your best interests and if you hire a Realtor (R) then they have taken an Oath to put your needs before theirs. I take this responsibility very seriously and I want my clients to have a game plan that fits their needs and goals. The sooner I can meet with you and help you determine what that the plan is the better. Whether you are a buyer or seller, the earlier I can start working with you in the process the better for you and your chances to save time and money.
Contact me and get this whole process underway
When it comes to SELLING or BUYING a home, please even if you are just “thinking” about it. Call me or shoot me an e-mail. I’ll be happy to help you set up a plan of action.
Next week please tune in where we will discuss a little more in depth of some of the more popular loan programs being used in today’s market and depending on your situation why one might be better than the other.
Thank you for reading, please share this article….
Ricky Schoonover of Nostalgic Homes 720-688-5110