It’s a seller’s market – Mortgage business

The most recent statistics from the Association of Interior Realtors confirm that there is a low inventory available to choose from for those looking to buy a home.

This creates more competition for the available homes and possibly multiple bidding situations in which homes are sold higher than the asking price.

If you are currently looking for a home or are considering a purchase this spring, here is my tip to increase the chances of you being the successful bidder in a potential multi-listing situation. Take these steps and you might be avoiding some of the craziness that could happen to this spring market.

This is my best tip and easiest tip.

  • Get pre-approved for your mortgage financing. Not pre-qualified but full pre-approval.

Before you start looking for a home or place an offer, you must provide a full mortgage in advance with your mortgage broker. This includes gathering all the supporting documentation that a lender will need to provide a final approval for your funding.

I will advise you on your purchase budget, look at any challenges and make sure you go beyond finding a suitable home.

We can also review the types of property you are interested in and advise if there are any potential financing issues due to real estate issues.

Doing all the work ahead of time could prevent your offer from falling apart because you were unable to secure financing for your purchase or because you may lose the home by applying for an extension to finalize your financing, which will make the seller may not be willing because of backup offers on site.

As a pre-approved buyer, you could be in a more favorable position in a multi-offer situation.

I see more unconditional offers, which means that the offer does not contain a financing condition.

I have to say this first:

  • Do not be tempted to make a subject-free offer.

Subject to adequate funding is a key clause that must be included in any offering. You could be the most qualified buyer in history. Great credit, great income, and job stability with a significant down payment, but in the end, a lender can still turn down your funding application.

It is impossible for a mortgage broker to say absolutely that no condition for financing is required as there are factors related to the property that can occur after the offer is made that can affect the financing.

This can be the location, appraisal value, the general condition of the property, etc. Some banks don’t even allow branch-level unconditional bids.

My best advice to you would be to never post a subject-free offer no matter what others recommend, and think long and hard about it unless you have the money in the bank to cover your purchase in case you’re not sure can be satisfactory financing.

But the reality at this point is that to get your hands on a property in this market, you may need to make a free offer. Please understand that this is a decision between you and your broker.

If you are confident with their direction that the property’s value is supported, you always have the option to remove terms. As a mortgage broker, my permit prevents me from advising you on this.

In these situations, I’ve had clients who sent me the listing before going with any offers and I can let you know ahead of time if I see any issues.

You can make any decision you want regarding an unconditional offer. My job is to make sure you understand the potential risks and I will always make my recommendations and I would encourage you to have a detailed conversation with your mortgage broker well in advance of making a subject-free offer.

There are some strategies to minimize your risk, but an individual conversation is required. To minimize the risk, it is wise to have a mortgage professional guide you through your financing now.

In a seller’s market you need to be prepared to be successful so please call me to see your options at 1-888-561-2679 or email me [email protected]

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