Charlottesville Home Sellers Face the Deaded Financing Contingency
October 18, 2008
The buyer financing contingency has left many sellers bitter and back on the market. How can this happen? The buyers had a pre-approval letter. What went wrong?
As a mortgage broker licensed in numerous states and one that has come from direct lending institutions such as GMAC-Ditech.com and LendingTree.com, this issue is one that I could write a book about. But I will try to keep it simple and to the point.
The reason why the financing contingency gets used so much is because most Realtors do not have access or foreknowledge of the mortgage process nor do they have access to mortgage lender guidelines to know what the reality is with respect to what a qualified borrower really is. Couple this to the fact that lender pre-approval letters are all conditional until an underwriter reviews and approves. Moreover, add in the fact that your loan officer is not an underwriter and his pre-approval may be incorrect.. The summation is a recipe for disaster.
So, how do I avoid this mess as a seller?
Well… you need to choose you Realtor wisely. Selling your home is not just about a Realtor’s fancy marketing plan. It is about a Realtor’s ability to also identifying quality offers and in scoring buyer risk should you accept an offer. It is about having the where-with-all to ask a buyer the appropriate questions in the negotiation process in order to score buyer risk and eliminate financing contingencies.
Within minutes a knowledgable mortgage person can know whether or not a buyer is solid or not. So, if you can ask for the following items in your buyer counter offer it will help tremendously: (related article click here)
- credit report
- ask how the buyers get paid( w2, 1099, or self employed) key questions to score risk. if there is 1099 or self employed income then risk goes thru the roof. For more info on this drop me a comment and I will go thru why.
- a copy of asset statement showing down payment.
- require loan officer name, phone number and access to all loan information
This information can really help you sore risk and leave a prospective buyer no out with respect to a financing contingency escpecially when this information is used correctly. Of course this information is useless unless your Realtor knows how mortgages work, current product guidelines and the knowledge of current programs available.
end
Roy Slater
Hathaway Real Estate
- Charlottesville Real Estate
- Southern California Real Estate
Charlottesville Real Estate - How to Negotiate with Sellers
October 16, 2008
Buying a home is one of the most important purchases most people will make. In order to make the right decision the first time, potential buyers need to be prepared. Consider the following before starting negotiations:
Be prepared
Research the housing market in the target area. Once you have information about the general area, focus on the particular property and seller. Look for answers to questions such as:
Why is the homeowner selling? (If they’re moving because they find the area undesirable, you might want to consider this issue.)
How long has the home been on the market? (If it has been on the market for a long time, perhaps there are negative facts about the property that you need to know.)
How much did the seller pay for the home compared to the current asking price? (If the seller paid more, find out why.
Was it a general real estate trend, or did property values in that particular neighborhood go down?)
What is the seller’s time frame for selling and moving? Does it fit within your needs?
Are there any defects in the home or problems with the surrounding neighborhood? (For example, is the roof so old that it will likely leak during the next storm? Is there a new construction project in the area that will lead to major traffic congestion?)
As the potential buyer, you want the advantage. While you want answers to all your questions to the seller, reveal very little about your circumstances. Do not give the seller personal information such as your income, the maximum you are able to pay for a down payment or the home, or when you want to move. Make sure that your agent knows not to reveal any such information to the seller or his/her agent.
Also, do not let the seller see how much you want the property. If you appear desperate or overly enthusiastic, the seller then has the stronger bargaining position. When meeting with the seller or listing agent, keep your emotions in check.
Establish a Timeline
Find out if the seller needs to have the sale closed sooner rather than later. If the seller is feeling pressured to sell, use that to your advantage in negotiating. Even if you, the buyer, are the one with the deadline for purchasing a home, don’t let yourself be rushed into making concessions or a purchase you may regret later.
Charlottesville Real Estate - Smart Home Sellers Avoid the Home Inspection Time Bomb
October 13, 2008
Serious Charlottesville home sellers along with direction from Realtors can easily navigate thru home inspection time bombs. Seasoned listing agents help sellers avoid the home inspection contingency by ordering a home inspection on the sellers behalf before the home goes on the market.
The home inspection contingency across many states is the easiest way for many buyers to jump ship on a contract. The home inspection contingency usually allows buyers the perfect exit to a contract at any hint of possible delayed maintenance or construction issues no matter how minor. Buyers simply counter back unreasonable repair requests, cancel the contract altogether, and goes as far as trying to devalue the home in order to renegotiate a lower price. Canceled contracts in a declining market can be a major set back for home sellers.
To minimize these setbacks, it is strongly recommended that sellers have the home inspected before it goes on the market. Don’t bury your head in the sand and hope nothing is wrong with your home. Get the issues fixed ahead of time and get top dollar for your home. Use the your home inspection as a tool to lock down prospective buyers. By heading off problems ahead of time, you can easily avoid contract cancellations and leave buyers with no wiggle room for cancellation with respect to home inspections.
Remember, serious and professional listing agents require home inspections for their clients ahead of time. In many cases many of the top listing agents will not take a listing without one. They do not like ticking time Bombs either. Selling homes is a serious responsibility and should not be taken lightly with a wait and see attitude especially in today’s market. Take the time and effort to neutralize possible contingencies before they come back to haunt you. Look for the next article on nuetralizing the dreaded financing contingency.
700 Billion Dollar Bail Out Illustrated
October 13, 2008
In case you have not seen this topic illustrated, I think this link would be a good one. It very effectively and with comedy illustrates the main cause of this mortgage mess we are in. This 700 billion dollar bail out has many Americans scratching their heads. Many are just not sure whom to point the finger at while others are pointing the finger at everyone.
Please, I encourage your comments on the blog. There are a lot of opinions on this matter that would be great to see. Who do you blame?
Please click here to visit the presentation >>> (please be aware there is some profanity)
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