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IF BUYERS ONLY KNEW!
· Talk with a lender first.
No exceptions. If you are going to borrow in order to buy, the lender is the first person to see - even before the Realtor® gets too deeply involved. If lenders talk to the borrower before getting into a Realtor's® car, and the borrower has a job, pay stubs, copies of tax returns and credit that can be checked, the lender stands a 97% to 98% chance of funding a loan and closing the transaction. There are that many different ways to get a buyer into a house and loan. However, if lenders don't talk with the borrowers until after they've been looking at property with an agent, the odds of funding and closing drop to just 55%. Why? Lender-qualifying up front steers us to the right price ranges of available property; it keeps impossible buyers out of the cars. And people are always more candid and accurate about their income and credit history when they are talking to the person who's going to read their tax returns and credit reports.
· The lowest loan rate isn't always the best loan.
In truth, some mortgage companies promise the lowest rates - which magically creep up just before the closing. Some loans have low annual rates and high loan fees (just like cars advertised for just $199.00 a month ... small print: plus $12,000 down). Some lenders are more reliable than others and will close on time - a low rate loan that never closes isn't worth much in the end. Sometimes it seems there is now a unique loan program for every individual buyer. Don't be afraid to explore and look beyond the surface.
· Lenders know more about your money than you do.
Lenders see people in your financial circumstances all the time and they measure at what points people get into trouble. That's where income to loan ratios come from. The lender does not want to take your property through foreclosure, not at any sales prices. They simply want you to make all the payments on time. They are in the lending business, not in the property ownership business. If the lender says you can afford it, you can - even if you didn't think so. And if the lender says you can't, you should listen.
· You can't accidentally over-pay for a property.
If the property is not worth the price, the appraiser will blow a whistle on the deal. Buyer money troubles (can't qualify for the loan, can't put together the down payment, can't scare up the closing costs) are the number one most common reason that a purchase will fall through. So if you can't afford it or the property isn't worth it, there's no way to get you in by accident. But if you knowingly choose to pay the cash difference on the property of your choice (you agreed to pay $160,000, the property appraises at $150,000; you can get a $120,000 loan [80% of $150,000] and put $40,000 down if you want to.)
· Look at your best home options, not at all of them.
Looking at more and more houses just gets you confused. Before long you will remember this house in that neighborhood; that house with this kitchen. The advantage of working with a professional agent who knows the market is that he/she can take you directly to the homes that closest meet your needs in a given price range.
· Take your agent's advice, at least most of the time.
An average buyer has purchased several homes over a lifetime, while most agents close anywhere from a half dozen to several dozen each year. Experience - especially current experience - has great value and wisdom. Pay attention to it. When you are paying an agent to represent you, the advice you get is for saving you money, not costing you more.
· Choices don't get better with time.
What you see is what there is. Exceptional opportunities don't wait for the conditions that cause you to buy. So thirty days from now, you may have slightly different properties from which to choose, but they will still be in the same range - not better or worse. The best purchase you can make is the one you choose now while you have the need to buy. Everything else is just a fluke - purely an exception to the rule.
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