Before beginning to look at properties, shop various lenders, decide on one, and receive a Pre-Approval Letter (not a Pre-Qualification Letter.) This is important because:
- The lender has a multitude of different types of loans. By looking at the credit score, the work history, the amount of available funds, the possibility of receiving help from a family member, how long the buyer anticipates living in the property, whether a third party such as a Relocation Company is involved and other variables, the lender will recommend the best loan for the buyer(s).
- Meet face to face with the lender. Establish a rapport so that when questions arise there is a person to whom you relate that you can contact. The internet is a great tool for some procedures. Getting a loan for the biggest purchase one will make is not one of them!
- Three types of lenders are: 1) Large, full service banks that often have offices in various locations. 2) Local, full service banks which have offices in the Tri-Cities area, and 3) Mortgage Companies. Mortgage companies typically do nothing but fund mortgages. Some lenders with whom I have worked to close loans and who have typically performed in a personal and professional manner are:
- Greg Pechmann: Hancock Mortgage
- Rose Fulton: Citizens Bank.
- Jeremy Livesay: Movement Mortgage
- The difference between a Pre-Qualification Letter and a Pre-Approval Letter is significant. To be pre-qualified means simply that the information you provide regarding income and debt indicates that you should be able to buy a house at a certain price or monthly payment. Receiving a Pre-Approval Letter means that the individual is approved for the loan, subject to finding an appropriate house and meeting the requirements of the lender to close on that property.
- Having financing in place means that the buyer will look at affordable properties rather than pipe dreams. Once the property is selected and the offer is written, negotiation is much smoother because everyone involved has confidence that the buyer has a reputable lender’s indication of the buyer’s ability to purchase the property.
Establish clear lines of communication with a Realtor®. Only real estate agents who are members of the National Association of Realtors® and who pledge to abide by the Code of Ethics of the organization are Realtors®.
- In Tennessee, when working with buyers, an agent works either as an agent for the buyer, or as a facilitator. We will discuss this document at our first meeting. Informed buyers are happier buyers!
Prepare to find the best home for you by doing the following:
- Before beginning to look, try to determine what is most important to you. Location? Size of the house? Size of the yard? Number of bedrooms? Design of the house? Price? What else?
- Communicate as clearly as possible to me your wants and needs.
- Realize that, as you look, your ideas may change. This is ok! No buyer finds a house with everything that was on the original list at the anticipated price, location, etc.
- Especially when coming from another market, remember that each area has its own characteristics. These are determined by the topography, weather, and demand. “Flatlanders” who are unaccustomed to basements may find the storage space very useful. And…our basements are not for protection from tornadoes since they are rare to non-existent here!
- When looking, try to remember only a small number of houses. Research shows that the average buyer can remember no more than three houses simultaneously. Look objectively at the first two houses, then, discard from your mind the one that least meets your needs. Continue doing this as you look. One house will come out on top!
- Communicate, communicate, communicate with me! Express your feelings. Ask questions. You won’t hurt my feelings, and will only help me to help you.
When writing a Purchase and Sale Agreement, (sometimes called “An Offer”) consider the following:
- The purchase price, terms, and closing date are the most commonly negotiated components of the document and can affect each other.
- I can provide statistics from the Multiple Listing Service showing the sales price of comparable properties and the listing price of comparable properties still on the market. Remember that the seller has this information available through his agent, as well. A “low ball” offer is usually not effective and may risk causing the loss of a sale.
- Being pre-approved and knowing the terms under which the property will be purchased is a positive. Asking for help from the seller on closing costs may affect the reaction to the purchase price. Usually, no one component “makes or breaks” a “deal.” The total offer to purchase with all its parts functions together.
- Being reasonable on the closing date is to your advantage.
- Including in the Purchase and Sales Agreement the right to have a home inspection done by a reputable inspector is a generally accepted procedure. The Purchase and Sales Agreement has a clause spelling out in detail this process. Hiring the inspector is the responsibility of the buyer. I can provide you with a list of licensed inspectors. Interviewing them by phone to determine their experience; their professional affiliations, and the type of report they provide is my recommendation.
- Being prepared to present earnest money is important. This check is presented to the buyer’s agent following the Offer to Purchase becoming a contract. This money is deposited in the escrow account of the real estate firm and is held until closing. At that time, the money is credited to your side of the settlement statement. Understand the ramifications affecting earnest money should either the buyer or seller default, as spelled out in the Purchase and Sales Agreement.
- During the time between presentation of the offer by the agent and the final execution of the contract, there may be negotiation. I will do this for you, with your input. Proper negotiation results in each party feeling positive.
Between the time of execution of the contract and closing date:
- Continue to communicate with the lender and me and to provide such documents as requested.
- Arrange for moving
- Arrange for insurance on the house being purchased
- Arrange for change over of utilities
- Ensure that all funds needed for closing will be available
- Work, work, work! (Yes, moving is hard work!)
- Dream, dream, dream!
- Bring any documents requested, including your driver’s license
- Bring necessary funds as directed
- Ask questions regarding anything not understood
- Breathe deeply!
- I’ll stay in touch with you and want you to contact me with any needs that you have. We will have developed a relationship that, I trust, will be long-lasting!
- Please refer me to others!