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Before accepting any offer from a buyer, you must
first ensure that they have the means and ability to close the sale with
you. Unless you are dealing with an all cash transaction, your
buyer will have to be able to qualify for mortgage financing.
As a seller, it is not advisable to take any action unless you know you
have a qualified buyer. Too often, a seller will be overlook this
basic fundamentals to selling your home and focus more on negotiating a
sales contract.
Before entering into any type of binding agreement,
you must first try to determine the buyer's financial status. Ask
your potential buyer these questions: 1. Have you
talked with a loan officer?
This should be your first question to the
prospective home buyer. This one simple question should be the
basis of whether or not you write a contract today. If they have,
ask for the loan officer's name and phone number and try to verify if
they have been pre-qualified or pre-approved. A pre-qualification
is a very informal process where the loan officer has calculated how
much the buyer is able to finance but generally there has not been in
verification of the buyer's income, debts, source of funds for the down
payment or credit history. A pre-approval is a formal process
where the information that the buyer has provided about income, debts,
down payment and credit have been verified. Essentially, all that
the pre-approved buyer needs is an accepted purchase contract to close
the deal. 2. How much money do you have to put
down towards the purchase of the home?
With the advent of 100% financing, many buyers do
not need a lot of money to purchase a home. With many loan
programs available to home buyers, the typical person will need 2 to 5
percent of the sales price as a down payment. However there is
something to be said about a buyer who has the means to put 20% of the
sales price down.
3. Are there any issues that may prevent you
from qualifying for a home loan? Have you reviewed your credit
report recently?
The better the credit, the easier it is to qualify
for a home loan. 4. Are you currently employed
and do you have sufficient income to cover the monthly mortgage payment?
Do you have a lot of debt? Lenders are very
cautious about how much of a person's pre-tax income goes towards their
house payment. If a person spends too much money on their house
payment, there will be little money left over for the other basics of
life--food, clothing, and other expenses. Too much debt can have
the same effect as not enough income. Debt includes minimum
payments on credit cards, student loan payments, installment loans, car
loans, alimony or child support, and other debt that shows up on a
person's credit report.
If you have a client that needs to be qualified for
a home loan, have them call me directly at 602-999-5939 or
contact Sun Nations Mortgage at
602-993-0000.
They can also fill out my Do-It-Yourself Worksheet
which will assist them in determining how much they can qualify for and
compare that to a variety of common financing programs out there. |
