I am a Buyer Specialist with the Mark Z. Real Estate Team here at Coldwell Banker.
I find many home buyers are not aware of the steps mandatory to make an offer on a home, condo or vacant land.
The very first step before looking at properties, if you are looking to take out a loan for the property, is to speak with a reputable mortgage lender. This will allow both the home buyer and Realtor to know what price range they should be looking in.
Working with a reputable mortgage lender is a must, especially in this market! With all the crazy things going on right now with shady lenders. Sellers are sceptical and want to be sure the offer they accept on the purchase of their home has no issues with financing. Sellers may even ask for a second mortgage pre-approval if an offer comes in on their property and the pre-approval submitted, is from an institution that is not known to the seller.
I have seen offers rejected due to the pre-approval letter not being from a well-known institution. Your Buyers Agent can also assist you in locating some reputable lenders they have dealt with in the past, lenders they trust to tell the truth to the buyer.
Also, I have seen home sales fall apart due to the lack of knowledge and honesty of a non-reputable mortgage lender. Some lenders tell you what you want to "reel you in" then days before you close on your new home, they break the bad news that you now don't qualify for the program they originally promised you.
If this were to happen, you may now be paying more for the new program. They count on you being in a situation where you will come up with the extra money to close, or possibly pay more in your monthly payment, because you are so anxious to purchase.
A qualified lender will educate the home buyer on the best and most current programs availble to buyer. There are so many great programs out there!
They will also let you know about the most current interest rates available with each program. The interest rates are awesome right now as a home buyer!
If you are looking to pay cash for a home then you will need a "proof of funds" on paper showing an account in the home buyers name that shows the money is there and that you are a qualified buyer.
You may be wondering why these steps are so important, and why not get this done after finding the perfect home for you and your family. First of all ,when the Buyers Specialist finds you the home you want to purchase, there are several items needed to even present the offer to purchase.
Another reason getting the pre-approval or proof of funds is so important PRIOR to looking is that when you find the perfect home and want to make an offer to the seller, you are prepared to make an offer. I have seen home buyers lose the home they love to another homebuyer who already has this in hand and is ready to go! This can be very upsetting!
The Buyers Specialist or (Buyers Agent) will write up a Purchase Agreement for the home as to your offer specifications. This Purchase Agreement is submitted with either a mortgage pre-approval or proof of funds as stated above. No offers will be looked at without this proof that the buyer is qualified to purchase this home!!
The agent will also need an Earnest Money Deposit or EMD. This is a personal check or certified check from the home buyer which shows you are a serious buyer. A copy of this check is submitted with the offer.
These are the important steps as a home buyer that are crucial in purchasing a home.
I hope this helped! Please let me know if you have any questions or if you are in need of finding the perfect home for you and/or your family!
Date: 2008-09-29 13:45:35