No doubt about it. Most shrinks put a normal real estate transaction right up there with death, divorce or losing a really great job when it comes to stress triggers. But while home buying is normally stressful, does it really have to be all that bad?
Well, there is stress, and there is gratuitous stress. And you can minimize gratuitous stress. How?
Most of the issues that make buyers crazy involve money, especially if they are getting a mortgage for their purchase.
If you will be getting financing, very, very early in the process, get your loan completely pre-approved by a good lender. Your agent will have a lender list, and mine is really hard to get onto and easy to get off of. My criteria? I want a lender whose pre-approval will actually mean something to the listing agent. I’m not talking about the guys who advertise on TV all the time, although they may be great for refinancing. I require them to be able to produce a very strong pre-approval letter to submit with the offer. (Most produce letters that just say the loan officer looked information the buyers provided, and it looks pretty good.) I want to be sure the lenders I recommend for purchase mortgages have reputations for getting the deal done, that they respect the important deadlines in the contract, and that they will give my buyers, the listing agent, and the sellers a good experience.
Also, strong pre-approval letters cannot be spit out of the loan officer’s printer on 30-minutes notice. I like them to state that the buyers have gone through the actual underwriting process with the bank’s real, live, human underwriters, and that they have been fully approved for at least as much as it will take for them to buy the house – it’s even better if the number is higher than the price of the home. This letter should state that employment, income, assets and credit have already been verified. This entire process could take a few days, so waiting until the day that deadlines have been set for offer submissions is not a great idea if there will be financing involved.
Your offer will usually include a financial statement that you fill out to be shared with the sellers. This disclosure will ask for your income, debt, assets and liabilities. You want to make this statement as strong as you can without overstating your assets or understating your liabilities. And it’s better if you can show you have more liquid assets than you need to complete a transaction.
Many of today’s buyers are getting help from the Bank of Mom and Dad for a down payment. If you are doing this, the lender will have a set of criteria. They must be able to verify whether your family is giving you a gift or a loan, and they don’t want to see your family borrowing the funds to pass onto you. So squaring away your family issues is another thing that is best done early in the process.
Starting the loan process early will give you time to establish a good relationship with the loan officer who will shepherd your loan to the settlement table. You can get to know and trust this person, who will play a big part in educating you about the risks of strategies that like waiving the contingencies in the contract for loan approval and appraisal. And there will be lots of questions you’ll have along the way – feeling able to trust the answers from your lender is comforting.
If you are dealing with your lender issues from the time you begin your search, you can eliminate most of the gratuitous stress when you find your Dream House. You will be able to make informed decisions about the risks you will take on by making your offer as clean as possible – and therefore more attractive than to the sellers than the offers other buyers may be making.
No matter what you do, there is likely to be some nail biting, especially between the time you submit an offer and the time you hear from the sellers’ agent. If you are getting a mortgage, putting the house before the money can not only create huge amounts of avoidable stress. This buying strategy can totally sabotage your ability to get your offer accepted at all, especially in the strong sellers’ we are experiencing right now.
If you are getting ready to buy or sell a home in this busy market, I can help! And I’ll never be too busy to work with you, your friends or family members to make their next move – and to make it as smooth and enjoyable as possible. Please contact me at 202-549-5167, and I would be honored to help.