BUYING POWER IN MULTIPLE OFFERS

what you need to know...

BUYING POWER - In Multiple Offers

Buying a home in a Sellers Market can be tough to navigate! Let me walk you through some best practices to set your offer up for a successful transaction and the keys to your next home!

Most of us require a loan in order to purchase our first or next home. Choosing the right Lender partner is crucial and understanding the difference between Loan Approval and Loan Qualification. In Multiple Offer situations you may be competing against a cash buyer so you want to make your financing as strong as possible!

According to Mike McDermott, Loan Originator with The Gibraltar Group ......here are the key differences between:
Pre Approval Letter and a Pre Qualification Letter.....

So you want to buy a home, have your loan application in good order, and now you are ready to make an offer. Whats the difference in qualification letters? Well... a lot actually.

A pre-qualification letter simply means you provided basic verbal information to a lender over the phone or perhaps through email. The lender analyzes your information and determines you meet the basic qualification standards. The lender can issue a pre- qualification letter, but must acknowledge that the information used to determine qualifications is all verbal; nothing validated in writing. As a buyer, this is a very weak position when making an offer.

A pre-approval, or conditional approval, letter puts you in a much stronger position as a Buyer. This means you have completed an Application, provided income and asset documentation, and the lender has fully analyzed your documents and qualifications. This may even include an initial automated underwriting review, or perhaps even a formal underwrite (meaning an Underwriter, who is someone employed by the lender, has completed a formal review and issues the authority to approve a loan).

The stronger your lender letter, the better your chances at winning an offer to purchase a home.

If you have questions about the lending process, please reach out to Mike McDermott at mmcdermott@gibraltarlending.com, or 713-904-3890.

PRO OFFER TO PURCHASE TIPS:

Work with a Real Estate Agent - do your homework. Request a Buyer Interview. Ask Questions, Listen, Learn and understand how a Sales Agent can protect your interests throughout the buying process

Sign a Buyer Agreement Contract - this protects all parties and sets everyone up for success in the negotiation and sales process. This is a key step - otherwise everyone works for the Seller

Sell before you buy - if You have a home to sell first - get it on the market and SELL it - this will allow you to have better purchasing power without the Contingency of Sale of Property

What is your top buying power? Look for homes 50,000 - 75,000 less - WHY?

- In multiple offer situations to be competitive you will most likely be offering ABOVE the listed price. If you start at your maximum buying power - you could get stuck

- The Property may not Appraise at the Price you offered above List Price - so how will you and the Seller negotiate to meet in the middle? - Only if you have Buying Power

Come in Strong - Understand the current market sales in the neighborhood, the trends to help set up your Best and Highest Offer - set your limit

It’s not just about PRICE - Look at all key Terms and Conditions that the Seller is asking for - longer closing Date, assuming Tenants, Taking the hot tub, Lease Back for 90 days etc. Try to accommodate where you can

Know when it’s time to walk away..... Be prepared to move on to a different property if the bidding war is out of control. Stay positive and learn from each and every offer you write. The keys to your next home are waiting for you!

WENDY RICHARDSON, 832-540-3817

REALTOR, Better Homes and Gardens Real Estate Gary Greene wendy.richardson@garygreene.com www.wendyrichardson.garygreene.com