Buyer Prequalification - It's an offer, no maybe it is or isn't!

 Answers to you Athens, GA real estate questionsI got an offer on one of my real estate listings a few days ago.
Whoo Hooo...then reality sets in, the "prequalification letter" wasn't worth the paper it was printed on when it rolled out of my fax machine!

So now instead of being able to present this to my sellers in a positive manner, I have to temper their enthusiasm with some realism, the buyer may never be able to close on this loan! You see, Mr. & Mrs. Seller, instead of blithely moving ahead with the purchase of your new home, we have to make sure you are protected - so that you don't wind up with 2 houses!  I've already made the loan officer unhappy, and I risk offending the buyer, while trying to protect the seller and make sure this is fair to everyone.

Unfortunately for the potential buyer, we cannot take their offer very seriously.  In the past, buyers would start their home search and when they found their perfect home, the next call would be to a mortgage lender or bank to get pre-approved.  In today’s market, it is critical to get pre-approved financially by a mortgage lender or bank before your search begins!

Based on general questions about your income, debt, assets, and credit history, lenders can estimate how much mortgage you qualify for.  Pre-qualification and Pre-approved are different things.  Pre-approval means that you have applied for a mortgage; you have filled out the mortgage application, received your credit report, and verified your employment, assets, etc.

When you are pre-approved, you know exactly what the maximum loan amount will be, and you won’t have any surprises.  A pre-qualified letter is not verified and just does not count for much if you are competing with other buyers who are pre-approved, which is happening often on the best deals in the Athens, GA market area.  When you are pre-approved, you and the seller know exactly how much house you can afford.  It gives you credibility as a buyer and lets the seller know immediately that you will qualify for a loan.

In addition to being pre-approved, it’s important to be pre-approved with a legitimate lender, the Internet has given rise to many non-local lenders.  In some instances these lenders are less than reliable.  

So potential Athens, GA real estate buyers, do your lender research carefully!  
Common sense questions go a long way:  
  • Does you lender return your call or email within 1 day?
  • Has you received anything in writing?
  • Has your lender requested paycheck stubs, or tax returns?
Please don't try to shop with a prequlification letter, that does you no good & might actually hurt your chances at going under contract on your dream home!

                                   Michelle DeRepentigny, Broker of Success Realty in Athens, Georgia

Posted by Michelle DeRepentigny at 7/20/2009 1:13 PM
Categories: Buying a Home, Selling Your Home
Tags: buyer prequalification athens ga real estate buyer preapproval
 

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