Finding Lenders before you buy
Last week our seller focus took us on a top ten essentials list to selling your Denver home. We learned that it takes a well thought out plan to sell your home. There are 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 a lender BEFORE starting your search.
Imagine that you finally find the home of your dreams after weeks of browsing. After a few days of dealing with the seller, you find another offer can be accepted over yours! This is because you were not prepared to purchase the home with a clear plan. By the time of purchase, sellers have gone through an entire tedious process. In many cases they have time and money invested into preparing the home for market. The last thing they want to do is accept an offer and watch that deal fall through because nothing was agreed upon between the buyer and their possible lenders. This, in turn, makes it that much harder to obtain the next buyer. There is always some burning question that repels buyers from the house going forward…
“So, this home was in escrow…What happened? Why did it fall through? What’s wrong with this house?” These are just a sample of questions that goes through potential home buyers minds when a house falls out of contract.
Of course we do our best to explain there was nothing wrong with the house, the buyers could not get financed and the previous deal fell through. However, there is always that cloud of doubt and if there is any doubt it is unlikely for someone to make such a grand investment such as buying a home. In short, a prepared buyer is one who has a clear plan.
One of the first steps in the home buying process…
A major part of that plan, if you are not paying all cash that is, figuring how you are going to finance the home? This seems like a simple question however, you may be surprised how many buyers out there do not think of this initially. They are just looking around and probably not going to find the home of their dreams while just out and about. So, there they are out in their car, they pass an open house sign, “Honey, stop the car.. look at that house! It looks perfect. I mean I love this area” Once they make it inside the home, they are really impressed. “OMG, look there is a workshop. There’s 3 car garage too, nice. Oh,it has 3 bedroom, 2 bathrooms, and it even has that office space we need. This is right by (Child’s) school and such a short commute for work.”
Now, just wait a minute
There are two questions that I generally ask early on during my open house conversations.
1. “Are you working with a broker?” and the next one is;
2. “Have you spoke to any lenders?”
The response I usually get is “Oh no we are just looking, we want to buy a house in Denver and we have been looking for a few weeks but we are not ready to talk to a lender yet.” There is a wealth of knowledge to be gained that can save you time and money by first off speaking with your Lender and selecting a Local Denver Real Estate professional early on. Buying a home is already stressful enough, then to not have a clear plan BEFORE you start wasting time and gas money driving around neighborhoods looking for open houses. If you don’t already have a lender who you want to work with to buy your home then it’s even more important to select your a Real Estate Professional to help you.
One of their first tasks is going to help you determine the right lender to help you in this transaction. We tend to know the local mortgage professionals who know the market and how the navigate the process to ensure your success in buying the home. There are so many different loan programs and they are not a one size fits all type thing. They are very specific, 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. If you are a veteran such as myself then the VA loan program might be the perfect fit 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 maybe 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 more.
I cannot stress to you enough, When you hire a Real Estate Professional in Denver early on your chances of being prepared when you do find that home are greatly increased. You don’t pay any more in commissions if you hire me a month or more out from when we find your home than if you call me from the front yard of a sign you see and want to offer on the 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 and have a clear plan to purchase. 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.
If you are even just thinking you may want to buy or sell your home in Denver. One of the first and most important steps is to select a real estate professional and 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 previous article. Many of us only have our experience of buying a car as the largest purchase in our life before buying a home. Buying a home is much different than a car. When you buy a car the dealer can really care less in the beginning if you have a plan, they prefer you don’t have a plan. They get you excited about the car even drive the darn thing around town, get you excited and ready to buy it. Then they will find a way to finance you.. usually at a higher rate than if you planned ahead. Employees of the dealership work for the dealer not you, they are not obligated to have your best interests in mind.
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.
When it comes to BUYING or SELLING 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 or Email me here