I have wagged my finger at both buyers and sellers on the current real estate market, and today it is once again the buyers’ turn. While we are indeed far from an overall recovery, all real estate is local and in Westchester we are in a busy spring sales cycle. In more than a few locales, there are multiple offers on some select, well -priced properties. In those cases, I am witnessing a unique way for buyers to fall on their spear: not providing a mortgage approval letter.
No matter how many times we preach to buyers of the imprtance of being pre approved, there are still those who insist they’ll get one only after they find a house, and there are still to many enabling agents who are willing to show them properties. It is living dangerously of course, because if you don’t know of a mistake on your credit, identity theft or an old debt, you could be in for weeks or months of work you don’t know about until it is too late.
In the sellers’ case, no home owner is going to tie their home under contract with a buyer until that buyer has been rigorously checked out. To not do so would incur the risk of missing out on all those May and June buyers and face going back on the market later in the summer. That is costly, and can easily be avoided in most cases by simply calling a loan officer to verify the buyer’s ability to perform.
In a best case scenario, a well qualified buyer without a pre approval letter can miss a weekend and be outbid by someone with their act together. In those cases, they lose the house. Even if they are comfortably bankable, the house is gone, because they didn’t prove so soon enough and someone else did.
I am seeing two cases where the buyers are out in the cold in the past week. There are competing offers, the other offer has similar price and terms, and guess what? A good solid letter from a lending institution with a loan officer’s signature and direct number for any questions come from their competition. Contrast that with a wink and a promise, and the seller’s decision is easy.
Spring comes but once a year. We are seeing a tenuous balance between the old buyer’s market of the past few years and what we hope is the seed of a recovery, but at the very least a busy cycle of the season. Given the amount of money changing hands in a home sale and purchase, it seems simple enough to spend 10 minutes on the phone with a loan officer to make sure you aren’t wasting your time. Caution is still the operative word on both sides, and it behooves buyers to make sure their house is in order before they find a house they love.
 
          


 
					 
					
60 Seconds of My Life I’ll Never Get Back Again
<phone rings>
ME: J. Philip Real Estate, this is Phil, how may I help you?
Telemarketer: Is this Mr. Philips?
ME: *sigh* Yes, this is Phil.
Telemarketer: Hi, This is <Whatever> with <Company>, and I am calling to see if you’d like to do business with the 20,000 people who shop at the Briarcliff Manor A & P supermarket in every month? Are you familiar with the Briarcliff Manor A & P?
ME: I know the A & P, but I am not going to buy print advertising on supermarket carriages and walls. We have had more success with our Internet marketing.
Telemarketer: So if someone called and said they found you at A & P you would tell them you didn’t want to sell them a house?
ME: I would never do something that illogical. We are happy to do business with anyone no matter how they find us. I simply don’t think it fair to my clients to devote resources to a marketing effort that is not as finely tuned as my Internet efforts.
Telemarketer: Don’t you think your clients would appreciate you getting your name out in front of the 20,000 people who shop at the A & P every month?
ME: My clients appreciate that I built my company through marketing targeted at people who are specifically seeking real estate online, not people seeking milk and eggs.
Telemarketer: OK. Have a nice day.