In most real estate transaction the seller requires the perspective buyer to have a pre-approval letter from their financial institution and/or proof of funds to submit with their offer of contract. This is especially true with short sales and bank owned transactions. They do this to protect the seller by giving them an indication of the buyer’s credit/financial worthiness prior to them taking the property off the market by putting it under contract.

A smart buyer who has done their homework prior to beginning their search is a buyer who is ready to jump on a good deal when one comes up. Not only does it allow the buyer to move quickly it also lets them know what the can and can not do upfront, thus avoiding issues later in the process. This is a win-win necessity.

In our local market there is an abundance of low priced bank owned houses becoming available everyday. This has brought out the cash investors who are looking for great deals and have the cash available to move quickly to lock up these opportunities. As an individual buyer trying to break into this market either as an investor or to purchase your personal home you have to be ready to compete with the cash investor.

During the last several weeks I have seen several buyers lose great deals on a possible new home because they were not prepared to make a quick offer on the property. By the time they got there paperwork ready the listing agent said he already had, in one case, five offers on the property and 3 were cash offers. This could have been avoided and may have resulted in a contract if the buyer had done their homework and been prepared.

It is relatively simple to seek pre-approval from a financial institution. If you have a preferred financial institution or bank that you like dealing with go to them and request it. If you don’t have one then ask your real estate agent and they will be able to refer you a reputable financial institution. In either case you will have to answer questions about you income and financial status and the institution will run a credit check on you to help determine if you meet their credit standards. Typical they can have you an answer within 24 to 72 hours.

There are two important caveats to this. The first is this is only a pre- approval and not a final guaranty of credit. A more in-depth approval process will be completed once you have a contract and the mortgage lender has all the information on the property and any additional information on you they may require.

The second is that there is a difference in a “Pre-Approval letter” and a “Pre-Qualification” letter. Generally a pre-qualification letter is not worth the paper it is written on and often used as a sales gimmick. Be sure to specify to your financial institution that you want a “Pre-Approval Letter.”

This is a tough market for both sellers and buyers with stiff competition on all sides. But, you can help level the playing field by doing your homework upfront and being prepared.

Just remember; “If you snooze, you lose.”

1.   Keep the thermostat as high as you are comfortable with; not as low as you like.

 2.  Replace the filters often.

 3.  Keep your air registers clear and clean, making sure they are not blocked by furniture, carpeting, drapes and dust.

 4.  Turn off kitchen, bath, and other exhaust fans within 20 minutes.

 5.  If you not going back into a room for a while turn off the ceiling fan.

 6.  Keep draperies and shades on the south and west facing windows closed to maintain constant temperature.

 7.  Take shorter showers.

 8.  Wash clothes in cold water.

 9.  Check and replace all worn weather seals under doors and windows.

 10. Turn off the TV and lights when you are not in the room.

 Try these tips and see if they help stop your energy bills from heating you up.

In our initial discussions, prior to looking at homes, one of the questions I ask is “How’s your credit.” Often I get the following answer “My credit is excellent; I don’t have a mark on it.”

I always suggest they get a mortgage pre-approval letter, as it gives them more leverage to bargain with and lets them know what they can afford. I will refer them to several loan brokers I trust or suggest they check with their preferred financial organization.  Three out of the last four I referred came back with the same response from the mortgage company, “Yes, you do not have bad credit. In fact you have NO credit.”

A lot of people do not understand that having no credit history can be as bad as having “bad” credit when it comes to financing a house. Establishing a good credit history is a very important part of modern day life. This is especially true today when your credit history is used to determine so many things in life such as mortgages, insurance, job offers, etc. Avoiding credit in your life can have many negative repercussions in all areas of your life. 

Responsible credit takes work and does not just happen.  Building a good credit history does not occur over night and takes planning to accomplish.  You have to understand and know your financial position and make good decisions based on that position.

 Begin building your future today.

“We are always getting ready to live, but never living.” – Ralph Waldo Emerson

How much time do you spend each day planning. We have 5 year plans, yearly plans, monthly plans and daily plans. If you go by the books you have thoroughly scheduled and planned out ever move you make. You hold meetings to plan when you will hold the next meeting. You schedule time to plan your schedules.

It all reminds me of an old saying: “You don’t call a meeting to kill a rattlesnake – JUST KILL IT!”

Your life should be a verb not a noun. Life is active and changing constantly. To stop changing and being active, going from a verb to a noun, is to start dying. Life is not a spectator sport where you spend all your time sitting on the bench watching the game go by. It is a participative sport which needs your input. Whether it is coaching, encouraging or actively playing you have to be a part of a game. When you go to a sporting event you may not be playing on the field but you are an active participant if you are cheering and encouraging your team on.

Planning is important but it is not the end all, it is only the first step in the process. You have to put your plans to work and evaluate their successes or failures. Then adjust your plans and try again. Far too often we develop a plan and put in on the shelf in case we have to justify something in the future and never dust it off.

There comes a time in every plan and schedule where you have to take action.

NOW IS THAT TIME!

This type of seller is hard to work with and can be very frustrating to our buyers and to the agent. One of the dead give always to this type of seller is when the seller says “I know the price is too high, but bring me offers.” If the price is too high you may not get offers. Buyers have too many choices and will not waste time making offers on property that is ridiculously over price. If they do make an offer it will be so low that the only purpose it serves is to insult the seller who will only blame you for being a poor agent.

 The seller may not be motivated to lower his price during the listing and continually argue with you about it.  It can be extremely frustrating and time consuming to to the agent and the seller to attempt to get the price lowered.  The opening price should be close to what the comparatives say it will sell for.  Again, the agent will be blamed for being a poor agent only interest in a quick sell.

Remember it is not a “Listing Appointment” but a “Listing Interview”.   As an agent I am interviewing the seller just as much as the seller is interviewing me. ASK QUESTIONS! In order to make an informed decision on listing the property I need to understand your motivation for selling it.  If either of us do not like the answers it is better to walk away now than after we have invested time and money in a “Property that is Listed” verses a “Property that is For Sell.”