Qualified or NOT |
DON'T GET "PRE-QUALIFIED”!
Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller.
In years past, I always recommended that buyers get "pre- qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here's why! None of the information has been verified! Oftentimes unknown problems surface!
Some of the problems I've seen include recorded judgments, child support payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the client's bank account long enough, etc. So the way to make a strong offer today is to get "pre-approved".
This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It's VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.


Using a buyers agent can be a very smart move. This is a definite buyers market, and a great time to buy. Mortgage rates are still at all time lows and there are many properties out there to buy. Some sellers however have not realized that they can not get the same amount of money for their places that they could just 2 years ago. For the first time in a long time, home sellers that bought in the last few years may not be able to sell and get a profit. So they will test the market so to speak by pricing their home on the high side. What if you fall in love with the house but you know it is priced to high. The seller is not ready to talk lower price. Your buyers agent can really help with the negotiations. He or she will keep in touch with the sellers agent having a pulse and a phone call when the seller is considering a price reduction. They will know what is important to the sellers, price, selling quickly thus having a short closing period. A good buyers agent will guide you through a very stressful time. The best time to put in an offer is just before the seller is ready to do a price reduction. Otherwise you might end up paying too much because after the price reduction you run the risk of other buyers being interested in the house. Your buyers agent will be able to tell you when the time is right.