EXHAUSTING! That is what is can be like for agent working in this market. Telling the same things to different people over and over. It’s not their fault. These people have likely bought and sold MANY homes in their life. They are sure they understand what it takes and what they need to do. Well…our job is to welcome them and educated them to the “new reality” of today’s lending environment.
In 2005 it was VERY common to get a loan based on “stated income”. This meant that if your FICO (credit) scores were lets say…over 700…you could just “state” your income and do a “no docs” loan. The lenders were lending to almost anyone. Well…I won’t dwell too much on what happened after that. But it resulted in our market being ON SALE now at about HALF OFF the 2005 prices. Some areas more…some a little less…but every area in the Valley of the Sun has been affected. WITHOUT EXCEPTION.
Homeowners were (and still are) losing their homes daily. For a variety of reasons I will not go into here…we have A LOT of very attractively priced inventory.
Fast forward to now. People are calling me all the time saying they are wanting to take advantage of the low interest rates and even lower sales prices. My first suggestion? Call one of my trusted lender partners and get pre-approved. In fact, our Realtor Association has recently revised the form we need to submit with our contract to be VERY specific as to where the potential buyers are in the qualification process. You can view this form here.
Actually…it is MORE than just a suggestion that they get the loan process started. I seriously wonder about folks that won’t do it. I try my best to educated them and let them know that getting this going can make the difference in ending up in their DREAM home (or their dream income producing property)…or not. It is hard to negotiate as a buyer’s agent on their behalf if I can not provide proof to the seller that the buyers have the ability to purchase the home. Cash investors are also asked to provide proof of funds to the seller to be taken seriously. Would you take your home off the market and just “hope” the buyer can perform. Probably not.
My writing of this is because I had a situation where I was convinced by a customer that they had “no doubt” they could qualify. They came in town for only one day. She said she did not know if this was a buying trip or not…as they were planning on buying several investment properties either here or in Vegas. She even stated they would be putting 50% down if not paying cash. I naively (odd… as I have been an agent for over 20 years!) spent time identifying and showing properties to this nice couple. I liked them very much.
What happened? They identified a couple of homes they were interested in buying and THEN they agreed to call one of my preferred lenders. And SURPRISE! They are overextended with rental properties they have NOT been claiming on their taxes. Therefore their ratios do not work out and they CAN NOT qualify…for anything right now. Pay cash? Well…now they are worried about their financial picture and need to talk to a tax advisor and a financial planner and come up with a plan.
The moral of this story? LISTEN TO YOUR AGENT AND GET PRE-APPROVED PEOPLE!!! And to agents…if your customers won’t make the call trust your gut feelings. INSIST. If they do not listen to you about this they might not listen to you and respect your professionalism about other important aspects of the transaction.
I really, REALLY like my clients…and I think the vast majority feel the same way about me. I made a mistake on this one though, One I do NOT intend on repeting. They would have respected me more if I insisted they make the call before we got in the car to view homes. If they had been “mad” about it? Well…they are better off with another agent I guess.
As always… if you are looking for a GREAT agent to help with your real estate needs please e-mail me at Adele@GreaterPhoenixHomes.com or give me a call (or text) at 602-504-3898 or 888-897-7821 x 114. Plus, I have a GREAT search tool on my web site that gives you the ability to search the entire MLS…just like agents do. Very COOL! Go to Metro Phoenix Homes and check it out! YOU can create and save as many searches as you would like…and it is THE SAME SEARCH I DO AS AN AGENT! You will LOVE it!
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