Everything A Real Estate Agent Doesn’t Want A Home Seller To Know! Part-3

Thinking about selling your home? Perhaps you should give this some thought too… I have already touched upon the importance of a home seller viewing himself or herself as the employer who is “hiring” an agent to sell their home and to screen them like you are hiring an employee. Specifically avoid hiring part time agents (unless you want part time representation). copart

So let’s assume that you have retained an agent, your home is listed and you get an offer on your home. Sounds great right? Maybe, maybe not. When you accept an offer, depending on the language of the offer, you are effectively removing your home from the market until you determine whether the buyer can, in fact, buy the home. You would hope that there has been (and often is) some financial pre-qualification of the buyer by the agent before the offer is presented to you and accepted. But agents are not loan officers and sometimes buyers who appear to be able to borrow a mortgage can’t. woles4d

When I was a loan officer I saw nice people in nice clothes driving nice cars with decent down payments unable to borrow a mortgage. Why? A variety of reasons including but not limited to bankruptcy, legal claims, insufficient time on the job, over extended credit, divorce in process, etc. In other words, people who “look like they could do a deal” sometimes can’t. And there you are…with your property possibly off the market for 30 days or more to find out the buyer can’t buy. Aluminium schuifpui

Briefly: there are two kinds of credit reports–an in-file report and a mortgage credit report. An in-file is kind of like a quick report whereas a mortgage credit report is much more thorough and can pick up things an in-file may miss. The point is, sometimes things are discovered over time about buyers. This is especially important in “chain deals” where a seller is also “buying” and needs to sell to buy. And like a chain, it’s only as strong as the weakest link. Agents are aware of this but like I have previously stated, sometimes agents throw offers on the wall and hope they stick

What should you do? Well, that depends. There are basically two kinds of home buyers and sellers on the planet—The elite few and everybody else. If you are selling a high dollar property geared toward an upper crust society you will probably be working with a top producing agent, not a new, inexperienced or part time agent. In that case you probably don’t need to read this article. However, if you fall into the everybody-else category you may want to consider the following: sellersplanet

***Use a written protective clause when you accept a purchase offer from a potential buyer.

Your goal is to determine whether the prospective home buyer is a green light, yellow light or red light for financing and any qualified loan officer can determine this information quickly during the loan application process.

What you want the buyer to do is get qualified by a loan officer of a reputable lending organization for financing quickly and to have that tentative qualification for loan approval in writing before you remove your property from the market. You should have an attorney review the purchase offer and modify it to make sure the buyer gets loan approval within a short period of time from a lender. I am not an attorney nor am I giving legal advice–I am suggesting a common sense approach to protecting yourself. One quick fix, only as an example, is to accept the purchase offer with a protective acceptance clause something like this: bbcforbes

“Acceptance of this offer subject to buyer written qualification for loan approval within (48) hours”

If you or your agent get written notice of pre-qualification and tentative loan approval from a lender and the buyer looks like a green light for home financing, then you can pretty much relax. If not, you have options…

Why would a seller do this? What if a cash buyer wanted to put an offer on your property a few days later? What if a truly qualified buyer came along within the next week or so? What if either of these two scenarios occurred and your property was tied up, off the market for an unqualified borrower and you didn’t find out for 30 days that you were dealing with a dud? Again, you want to talk to your attorney about the exact language you should use in your area.

Here’s something else home seller should know. Loan officers at banks tend to be on a salary, loan officers for mortgage brokerage companies are most often not–they eat when the real estate deal closes. Mortgage brokers tend to work harder to get a borrower financed because they don’t earn any money unless they close the deal. If I was selling a home, and the borrower was a marginal buyer, I would prefer the buyer apply at a reputable mortgage company v. bank–but that’s just me. It is something to consider as a seller–where is the buyer going for financing?


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