Sunday, April 06, 2014

Why you need to be prepared before you go see homes....

There is often much discussion and even more resistance by buyers to be prequalified and ready to write an offer before seeing homes...

Why is it so important?

Many changes have occurred to our contracts and one of them is Paragraph 5a of the Purchase Agreement. This paragraph refers to what MUST be in place before a seller can move forward with your offer.

Buyer agrees to provide Seller with a Pre-Qualification Letter from a lender no later than _____ days after the
Date of Acceptance. Pre-Qualification Letter must stipulate that: (1) a written loan application has been made;
(2) a credit report has been obtained and reviewed by a lender; (3) a preliminary loan commitment has been
secured from the same lender; (4) financing equal to the loan amount provided in Paragraph 2(B) of this
agreement is available to complete the transaction as per the Settlement Date stated herein subject to
contingencies provided for in this Agreement and subject to underwriting approval. If Buyer does not obtain
a Pre-Qualification Letter within the timeframe stipulated above, this Agreement will terminate and the
Earnest Money will be refunded to Buyer.

Let's imagine that you have gone out looking at homes, found the perfect one and guess what - someone else thinks it's perfect too! So, you grab a contract and cross your fingers and hope that the seller will accept your offer...and then you get to that paragraph....

"But I haven't talked to anyone yet"...right? A lender cannot produce a document that complies with this paragraph unless they have taken a loan application from you. This process isn't complicated, but it does take time. A good lender takes it seriously - and it may take a day or two to obtain all of the information necessary.

Oh, that other buyer who also saw the house and thinks it's perfect? They get the house because they were ready.

Why do it before?

1) A Realtor is only going to take you seriously if you have taken this step before home shopping.
2) A seller is only going to take you seriously if you have taken this step before writing an offer.

You only need two reasons, so what are you waiting for?

If you would like a FREE COPY of my Buyer's Guide to buying a home, contact me today!

Linda DeVlieg, Associate Broker
Coldwell Banker Legacy


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