1. It is generally a
good idea to get pre- qualified.
Many sellers require a pre-qualification letter with your
offer to purchase. So you should have that readily available when
it comes time to make an offer. In general it will make your offer look
2. There is no cost associated with getting
Your Finances in Order. -
Often when people are considering buying a home whether it
be a first time investment or another home, they believe they can just
purchase one like buying a new item for a kitchen. That is not usually the
case. Here are some things you should do before you buy a home.
Check with a lender to see what you qualify for.
You should know facts such as:
Amount of Cash you have for a down payment*
Other Home Loans
Credit Card Balances
Other Loan Balances Vehicles, etc.
Other factors affecting your income e.g. child support, tax payments,
*Note: Some first time home buyer loan programs do not require a down
Pre-qualification is where you have spoken to a lender about a possible home
This is when you have spoken to a lender, usually over the
phone. You will provide him with the information described above. They in turn
will give you an estimate of what they believe you would qualify for if all
the information you have given them is accurate.
IT DOES NOT MEAN YOU ARE APPROVED!!
People often think because they are pre qualified they can
get the loan when they find the home of their dreams. That is not true. At
this point in the loan process they have not run a credit check, or verified
any of the information you have provided. There may be things on your credit
report that are inaccurate or that you have forgotten about that may inhibit
the loan process, or affect the loan amount.
5. When we find a home we like how do we
It is a many step process here is a brief overview of the process
You will need an earnest money check to accompany the Offer
to Purchase. This may be in the form of a personal check, or in some cases a
certified check. A minimum of 1% of the sales price is deemed adequate in most
cases. When your written Offer to Purchase is presented to the seller, he has
1. He can accept your offer
2. He can reject your offer
3. He can make a counteroffer.
Negotiations after the initial written offer are conducted
verbally until an agreement is reached. When the seller accepts your offer, or
you accept his counteroffer in writing, you have a binding contract for sale
on that property. Your earnest money will be deposited in the listing broker's
trust account to be held until closing.
6. Is it best to make a really
low offer at first?
It is important to remember that if you make a low offer on
a home and the offer is rejected or countered, another prospective buyer may
submit an offer that may be accepted by the seller before you have the
opportunity to submit another offer or accept the seller's counter to your