Larry Gray

Posts Tagged ‘Florida real estate’

Remember the old Boy Scout motto “Be Prepared.” As in most aspects of life this is especially true when you decide to get into the short sale and/or bank owned real estate market. There are a lot of great deals out there but, you must be prepared to move quickly when you find the property you want.

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.”

“Do you want to List your property or do you want to Sell your property?” This has become one of the first questions I ask on a Listing Interview. It is surprising how many people, in this market, just want to list their property and if it sells, great.

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.”