So, you finally found the home you love – but too quickly realize there are others who also want this home as much as you do!
In today’s strong “seller’s market” there is a lot of competition on desirable homes, especially here in Central Florida. For the seller, this is a great news, as home prices are pushed up, often higher than the asking price. For buyers, especially those who are dead-set on a certain house, this scenario can make the home buying process extremely stressful.
Here are some steps to make your offer stand out from your competition.
Get preapproved, not just prequalified. A Pre-Approval is the most powerful tool a buyer can use to prove their ability to purchase a home. A buyer with a Pre-Approval means less surprises or problems! Anyone who wants to buy a home in today’s market should first review their financial situation with a lender. The understanding of how much can be borrowed reduces the possibility of problems later.
There is a big difference between a letter of pre-qualification and a letter of pre-approval, and it is important that you understand this difference before we start looking at homes.
The Definition of a “Pre-Qualification”
When a lender grants a buyer a “Pre-Qualification”, it means the lender has reviewed the buyer’s finances and has done a basic calculation to determine how much that buyer may be able to borrow. While pre-qualification can reduce the processing time for home loans, it does not guarantee that a loan will be made by a lender.
The Definition of a “Pre-Approval”
When a lender grants a buyer a “Pre-Approval”, it means the lender has actually approved the loan with only two additional requirements. First, that the buyer chooses a home to purchase, and second, the home the buyer chooses appraises at or above the sales price. The “Pre-Approval” letter represents an actual commitment on the part of the lender. In order to secure such a letter it is necessary to complete a formal loan application and pay the associated fees. Credit, salary and bank funds will be checked, and if the loan is a good investment, the lender will issue a pre-approved letter that provides a commitment for a period of time, subject to a satisfactory property appraisal and title search.
In order to purchase a home, you must either have the funds available or a pre-approval from a lender. If you do not have a lender to work with, please contact us and we will get you in touch with one of our qualified lending partners.
Offer the highest price you can
In today’s market, it’s no longer the norm to offer 10-15% less on asking price, especially if you found the home you love. Offering the highest price upfront may eliminate any multiple offer situations, as the other interested buyers may offer less than the asking price, putting you in the lead.
Be patient, and don’t give up
If you get that dreaded call from your realtor informing you that the sellers have accepted another offer, be patient and don’t give up just yet. Ask your agent to find out if the sellers will accept a back-up offer. All offers are contingent on a multitude of items (appraisal, inspection, financing, taxes and more) and offers fall apart, more often that you can imagine. If you have a back-up offer in place (that is signed and accepted), you will automatically fall into first position. I’ve personally had several buyers get the home they wanted through this situation.
Even if you have your heart set on a home with another offer, it’s best to keep looking. If you work with a great realtor, they should be able to find you another home you love just as much!
All my best,
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