I often lack words to describe to my clients exactly how mind-bogglingly fast the world of mortgage lending is changing lately. Home buyers not only need good credit, a steady income, and piles of documentation to back all that up.. . . . . you need to be aware that loan guidelines change near-daily.
Yep. Nearly daily loan investors make changes to their rules about what they’ll lend on, what they won’t, who qualifies for a mortgage and who doesn’t, and how to properly fill out 9 inches of forms in triplicate to get the loan money.
I subscribe to a daily email that discusses changes in lending standards throughout the industry. It’s usually 2 pages long. Two pages of changes in loan guidelines per day!
Don’t assume you’re going to have zero trouble getting approved for a mortgage. If you have excellent credit you’ll probably get approved, but you’ll have to produce more paperwork than you can imagine.
Get approved. Then start shopping. Trust me. You don’t want to spend weeks looking online at this:
only to be told you’re approved for a mortgage to buy this:
Want to get pre-approved? Our favorite lenders, in no particular order:
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Kevin Reiser, AmeriFirst Loans, 480-289-7635
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Andrew Schmidt, WJ Bradley Mortgage, (602) 999-1912
Heather Barr is a Realtor. She's a chow hound, a gym rat, and the only political junkie in the USA who can actually keep her political views to herself. Instead, she focuses on educating her clients about the often-confusing world of residential real estate.
Tagged as:
From the Trenches
In yesterday’s post I promised 1 sure-fire way to avoid the stress of getting embroiled in dealing with a so-called bidding war. It’s bonus day here at The Phoenix Agents; here’s 2 ideas.
Option One - Make your best offer right out of the gate
Are you willing to pay $176,500 for that home that could be your Dream Home? Offer it. Don’t pussyfoot around offering $158,900 and hoping the seller comes back with a counteroffer. Just make your highest and best offer right out of the gate.**
I can hear the reply now: “But I don’t pay too much!”
Easy solution here folks. First, decide what is “too much” and what is “too little” for you and for this particular house. Mentally walk backwards from “too much” in increments of $1000 or so until you get to a number that you’d be satisfied with if you were the new owner of the home. Offer that.
There are a couple of scenarios that could play out here.
1) You bid low and don’t get the house – very likely
2) You bid your best and don’t get the house – could happen and would be disappointing, but at least you’ll know you gave it your best shot. Someone else – who was willing to pay what you believe is too much – got the house. Move on.
3) You bid your best and get the house – congratulations!
4) You bid low and get the house – in a true multiple offer situation, this is about as likely as winning the lottery.
Option Two - Stop Shopping
There is one sure-fire way to avoid the stress of multiple offer situations. Take your ball and go home. Don’t buy a house now. Keep renting and come back to play the game when the stakes suit your temperament.
Again, I can hear the reply already: “But I want to buy a house!”
You’ve got a choice to make.
Determine that you’re going to get over your fear of bidding wars by employing one of the strategies I’ve outlined here and yesterday. Or stop shopping for houses. Or at least stop shopping for houses that have bidding wars.
Hopefully this is helpful information. Still worried? Call or email me or Chris and we’ll talk you through it.
Heather Barr
**In metro Phoenix, in 2010, in prices under about $400,000 or so, bagain priced bank owned homes (a.k.a. forclosures or REOs) dominate the market. Remember Economics 101? Low price = high demand. If you’re shopping in this segment, expect bidding wars and bid accordingly. Not shopping in this segment? You might have a little more leverage in a multiple offer situation.
Heather Barr is a Realtor. She's a chow hound, a gym rat, and the only political junkie in the USA who can actually keep her political views to herself. Instead, she focuses on educating her clients about the often-confusing world of residential real estate.
Tagged as:
From the Trenches
