Many people go about the home finding process backwards.  They go through the entire process of searching, evaluating, and writing an offer on their home, WITHOUT being financially prepared.

And it usually costs them money.  Big money!

Completing a few things up front before you go searching will save you a lot of money, time, and hassles.  What are those things?

Here are three of them:

First, find a MOTIVATED lender. 

No, don’t just go down to your local bank where you’ll likely to be slowly tortured by bureaucracy and paperwork.   Your banker may be a good friend for your checking, savings and perhaps an auto loan.   But most bankers are not motivated to work hard to earn your business (although some are changing their ways). 

That’s because one of the quotas bankers have to live by is: “How many BAD loans did you originate?” 

         They don’t get measured by their production…

         They don’t get measured by their service…

         They only get measured by the MISTAKES THEY AVOID! 

Now, I know if your local banker sees this, he’s going to cringe a bit, and start reciting all the ad campaign jargon most banks are spouting these days.  But the truth is…

There Is Absolutely NO Incentive For A Traditional

Banker To Serve Your Best Interests

What you want to do is find a mortgage lender who is MOTIVATED to take your loan.  One who represents many different products, and can offer you many options for making your loan most affordable.

Here’s an important tip: Ask your REALTOR® to refer one or two lenders to you.  Why?  Because agents have power over lenders because they send them lots of clients.  It’s not just YOU alone talking to them. 

If they don’t give you first class service, the agent who sent you will refer (ALL) their clients to someone else.  So they’re motivated to SERVE YOU.  And the minute you have a problem with your loan, you can turn to your agent…who has much more influence and leverage over the lender than you alone.

After all, your agent and lender both want to see the transaction close.  There’s power in numbers and influence.  Use it to your advantage.

Now, the second thing you want to do is GET PRE-QUALIFIED with a lender.  Better yet, try to get PRE-APPROVED.

Why?

Because the first question any home seller will ask when an offer is presented is “Is your buyer approved for a mortgage?”

And rightfully so!  The seller doesn’t want the deal to fall through because you couldn’t get financing.  When they accept your offer, their home comes OFF the active market. If you fall through, it costs them time and money.

Plus, there’s one more reason to get pre-qualified or approved…

You Will Have Much More Power To Negotiate

Price And Terms When You’re Financially Qualified!

When you have money behind you, the seller knows you’re serious.  And a serious buyer ALWAYS has more influence to negotiate.  So do yourself a favor, GET PRE-QUALIFIED or PRE-APPROVED!

Now, the third way to become financially prepared is to have deposit funds available immediately.  One way to do this is to write a check in the amount of 3% of the highest price you’ve been qualified for financing.

Make the check out to the Brokers Trust Account. The broker or title company are trustworthy fiduciaries by law, and will hold the check un-cashed until you make an offer that’s accepted.

Now I know what you’re saying… “It’ll be a frosty day in Tahiti before I write a check before we’ve even located a home.”  I understand.

But you may want to consider this…

Jim and Susan were buyers from outside their immediate area.  Because of their distance, they could only get together with their agent with two days notice.  And the market was pretty good.

Three homes came on the market, and were sold before they could get together to visit them.  Twice, they lost other deals because of bidding wars. 

Finally, out of frustration, they placed an un-cashed deposit with their broker.

When they finally found the right home, they decided to write an offer…

And because they placed an un-cashed check on deposit, their agent could enter negotiations with verbal authority to make the offer.  And because the agent could demonstrate that he had earnest funds, the buyers were able to sign a faxed copy of the offer, and their deal was secured.

And it’s a good thing! The very next day, three more offers came in on the home they just put into escrow!