In today’s competitive housing market where many areas nationwide are seeing a far-leaning seller’s market with limited inventory, it’s important for buyers to put their very best foot forward and have all their t’s crossed and i’s dotted before they find “the one”.
Most buyers don’t consider just how much their mortgage lender can help them land their
dream home, but aside from a buyer’s real estate agent, the lender is the next most important asset a buyer has when putting together an offer. Using these 5 tips will help ensure you’ve got yourself in the best position to get an offer accepted.
Work with a Reputable Lender
One of the things a listing agent will consider when advising their seller whether or not an offer is a good one is the name of the mortgage company on the pre-approval letter. Especially in a multiple offer situation, a seller is likely to choose the offer that’s most likely to make it to the closing table on time and with no headaches or financial harm. That means if your competition is working with a reputable lender and you’re pre-approval is from anonymousmortgage.com or ABClowestrateXYZ Mortgage, you’ll be at a disadvantage with all other things being equal.
It’s a bonus if the listing agent knows the company and has had a good experience in the past. If the seller asks for their input, reassurance and a seal of approval from their agent can help an offer in getting accepted. On the flip side, if a listing agent has had a terrible experience with the lender, the seller will likely hear all about it before making a decision. Choose your lender wisely, and be wary of internet refinance lenders.
Have a Responsive Loan Officer with Stellar Communication
Sometimes that dream home is viewed at 7pm, or 10am on a Saturday. Sometimes, that dream home will be slightly above the amount on your pre-approval (or maybe you have a pre-approval, but need one for a different amount). In a competitive market, if you need an update from your loan officer and their business hours are 9-5 Monday-Friday, or if they take days to respond to your questions or voicemails, you’ll be at a serious disadvantage if other offers are going in ahead of yours.
Your loan officer shouldn’t be available 24/7, but a good loan officer is always responsive, always returns phone calls, and has an eye on their email in the evenings and on weekends – after all, the real estate business doesn’t stop in the evenings and weekends. Your loan officer shouldn’t, either.
Get Pre-Underwritten (and DON’T get “prequalified”)
If your lender hasn’t reviewed your application, your credit, and supporting documentation, then you’re not pre-approved regardless of what they tell you. A ‘prequalification’ is a flimsy notice that you may qualify for a loan, but it’s not nearly as assuring as a pre-approval, which involves a complete application, credit, automated underwriting, and supporting documentation reviewed by the loan officer.
Better yet, work with a lender that offers a pre-underwriting program to let the seller and their agent know that if they choose your offer, there won’t be any surprises. With pre-underwriting, your mortgage lender will put together a full file and submit it to underwriting before a property is found. This way, once an offer is accepted, all that’s left to do is the property-related work – inspections, appraisal, and insurance – giving a buyer the same strength as a cash buyer. Pre-underwriting says to a seller “we’re better than pre-approved, we’re fully approved pending you accept our offer”.
Your Loan Officer Should Explain Your Pre-Approval ON Your Pre-Approval
Put yourself in a seller’s shoes and consider what looks better:
“Mr/s Seller, this buyer is preapproved” OR “Mr/s Seller, we have reviewed this buyer’s credit, income documents, proof of funds needed to close, and have received an approval through automated underwriting.”
Of course letting the seller know that the loan officer completed a thorough review of a buyer’s loan application is the better way to go – but few mortgage lenders do this. Make sure you work with a loan officer that does.
Make Sure Your Lender Calls the Listing Agent
Your loan officer should act as a huge advocate when you’re putting an offer in on a house. Calling the listing agent offers the opportunity to explain your strengths as a buyer, but just as importantly shows the listing agent that the lender you’re working with is professional and a good communicator (one of the biggest complaints of real estate agents is that lenders lack proper communication skills).
When buying a home, it’s a team sport. Buyers want to buy a home, and sellers want to sell. A loan officer should let a seller and their agent know that they’re a part of the team, and that they’ll do everything they can to make everyone’s life easy, not just the buyer. A quick phone call also gives the loan officer a chance to explain the pre-approval process, and gives the listing agent a chance to ask any questions they may have. Communication is very important in the home buying process, having a lender that’s proactive in this area is a major bonus. If you’re currently perusing your mortgage options, please reach out to one of our Mason-McDuffie Mortgage professionals.