Mar. 18, 2007 - Market timing

I just read "What's in" and What's out" with homebuyers in 2007 written by Mark Nash.  One of the things he said was in was 'Market Timing.  He said that many sellers were on their own timeline in 2006 and missed opportunities by not recognizing the ebbs and flows of the real estate market.  Spring is the high market where you get the most demand by the largest number of buyers, Summer is a good market, fall is fair and winter is the remnant market, the left-over buyers and sellers from the high, good and fair markets.

I would agree.  I had several listings that were put on the market late in the season last year and ended up missing the busy market and not selling.  We are coming in to the spring selling season if you are thinking about selling your house now is the time to think about getting it on the market so you can take advantage of the high market.

Mar. 14, 2007 - Pre-approval vs. Pre-qualification

One of the most common reasons for a real estate transaction to fall apart before closing is due to the loan not being approved.  The buyer usually thinks they are approved but  the lender often issues pre-qualification and pre-approval letters based on limited information.  The lender pre-qualifies the buyer on nothing more than what the client tells them their income is.  In addition they often don’t run a credit report before issuing a pre-qualification letter.  If you think you are pre-approved but have not provided the lender with income and asset documentation you are not.  A pre-approval will require income and asset documentation.  Credit reports are also required on all loan types.  The only exception are certain no document programs.

Being pre-approved gives you an edge when you start looking for you home.  If you get in to the situation where there is more than one offer on a home it is often the person who has been pre-approved who will get the home.  I have even had the situation where the other offer was a little more but my seller preferred the person who had a true pre-approval.

What is a Pre-Qualification?

A prequalification is simply a meeting between a lender and a potential buyer to determine what the mortgage needs of the buyer are.  Income and assets are not verified.  The credit report may or may not be checked.  The information is not submitted to an underwriter therefore the lender does not have enough information to make a credit decision.

What is a Pre-Approval?

Pre-approval includes a complete loan application.  A credit report is pulled and asset and income are verified.  The information is submitted to an underwriter for a “credit only” decision.  Once you have been pre-approved your credit package can be used with any property.  Final loan approval will be subject to the underwriter approving the property only.  A pre-approval is normally good for 90 days.  The borrower receives a written pre-approval letter.