The most basic mistakes made by buyers can be avoided by working with an experienced realtor. Even so, buyers can at times present significant challenges to their real estate agent, compromising their home purchasing process, by having a reluctance to fully communicate and by not having proper loan approval.
Be Open About Your Financial Situation
Buyers often resist being asked personal and financial questions before they feel comfortable with their real estate agent. As a consequence, even if the agent has the skills to provide in-depth counseling and makes every effort to understand the prospective buyer’s needs, the beginning of the purchase process may suffer simply due to a lack of communication and complete information. If the buyer’s financial situation and basic lifestyle preferences are not identified clearly enough to enable a more accurate property search, several months can be lost identifying a suitable home.
A Quick Way to Avoid Failed Escrows
It is surprising how often agents present offers for potential buyers who are not fully prepared financially, and are inevitably disappointed when they lose out to another buyer who is pre-approved before making an offer. Many would-be buyers assume that their online research into loans gives them enough assurance to move forward, only to later discover they were not aware of the numerous conditions and hurdles that may arise.
In most areas of the country, prospective buyers are required to meet with a lender to obtain loan pre-approval before they begin to seriously look at properties with an agent. The buyers have to provide a verification of sufficient funds for the down payment, or all-cash purchase, so the lender and agent can know what price level the buyer can afford. This process also enables the buyer to be in a much stronger position once an ideal property is found.
Don’t Pretend to Be Ready to Buy, Be Ready.
Clients who insist, “Trust me, I know what I can afford,” or “Don’t worry, we can always get more funds if we need to,” often end up in failed escrows when things do not work out as they had hoped they would. Also, buyers who enter into contracts with the expectation that they can get the price down during the escrow process, or delay contingency timing to see if a more suitable house comes on the market, may put both the sale and the relationships involved at risk.
Though it is not always easy for agents to prevent some of these mistakes, an experienced agent is better prepared to ask the right questions and be alert to issues that can and do arise.
For the past 32+ years, Michael Edlen of The Edlen Team has provided real estate counseling services to prospective buyers and sellers and has sold over $1.5 billion.
