Wanna buy a house without first speaking with a lender? Here is a flag on that play…
By
paris911
It is incredible when we here at REMAX of Santa Clarita and REMAX of Valencia receive floor calls or sign calls that those out hunting for homes expect to be met at properties. First, there is a safety aspect. Maybe not for the caller, but for me. Maybe the caller is not to be feared, but maybe I am. Not that I would ever hurt anyone, that is not my way. But how do you know someone or who you can trust when you just call them and they are a voice over the phone?
What if the "place" they called is a den of thieves or worse? Taking our 20 minute "get to know" you routine is very important and will answer a lot of questions that will be necessary later on in the home buying or selling process. Plus, don’t you want to look us in the eye and see what we are about, or will it be like looking into the eyes of a cow? I know I can tell a lot about someone by how they speak, look, act, and in which way they place emphasis on words. www.ListingBook911.com – Search as Agents Do for Homes!!!
Whenever you’re shopping for a house – whether you plan on living in it or using it as an investment property – you can usually get a better price when you have cash in hand. Why? Three reasons:
• A bird in the hand is worth a half dozen in the bush. Smart homeowners would rather sell to someone who is more likely to close on the deal rather than a buyer who might not be able to secure financing. This gives the sellers confidence to move forward with their purchase.
• Distressed homeowners may need to sell in a hurry. With cash, you can buy in a hurry, without having to wait for a lender to approve your loan.
• If you want to bid on a property at a foreclosure sale, you will need a certified check for the opening bid amount or at least enough to cover the deposit (usually about 10 percent). You have very little time to come up with the rest of the money – hours or days, not weeks or months.
Having "cash in hand" means having the cash sitting in your bank account, but you can have the equivalent of "cash in hand" by lining up your financing in advance. For example, you can have any of the following financing already in place:
• Home equity line of credit: With a home equity line of credit, a lender allows you to borrow against the equity in your home. For example, if your home is worth $200,000, and you owe $80,000 on it, you may open a home equity line of credit for $100,000. The bank provides you with a check book for your home equity line of credit account, so you can make payments out of that account. You pay interest only on the money you borrow.
• Hard money loan: These are usually high-cost loans: points (interest paid up front) and high interest. Hard money loans are often useful for investors who plan to flip (rehab and sell the property quickly). In most cases, hard money lenders allow you to borrow against the future value of the home. Talk to your mortgage broker about hard money loans.
• Pre-approved financing: A lender can provide you with a pre-approval letter, essentially stating that based on your income, assets, liability, credit history, and other financial records, you are qualified to borrow X amount of money.
Don’t confuse pre-qualification with pre-approval. If a lender pre-qualifies you for a loan, the lender is saying that based on the information you provided, you will probably be approved for a loan. Pre-approval indicates that the lender has examined your financial records and has determined that it will approve a loan up to X amount of money. Pre-approval is like having cash in hand. To provide final approval, all the lender needs to do is determine whether the value of the collateral (the appraised value of the property) is sufficient to cover the amount of the loan.
Remember, in the real estate business, money talks – and buyers with cash in hand are the buyers who get the best deals.
Ralph R. Roberts, GRI, CRS is an experienced real estate agent and investor and author of Mortgage Myths: 77 Secrets That Will Save You Thousands on Home Financing (John Wiley & Sons).
There are many options when it comes to lending, both creative and straight. But the type you need depends on you. What you like, how you like to have things structured. We here at the Paris911 Team are all about playing it forward and not having anyone we are working with taken advantage of. We want to make sure you loan is on the up and up and that you are not getting into something that you will regret later on in life.
After escrow closes, most agents hang their hat until the 4.7 years later when those buyers become sellers. Paris and I are not of that make up. We want to be in your lives from now on. We want you to call when you have questions, concerns or comments. We want you to call and not stew over any questions you might have. Don’t every let your head hit the pillow without first having us resolve any issues you might be having.
With as much HONOR as we can muster I would suggest you check out our www.ActiveRain911.com and our www.TopProducing911.com or even our www.MLBroadcast911.com to see what we have to say about things that are to be feared. – CONNOR with HONOR
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[...] have been in operation for over 10 years now in the Real Estate Industry. Paris used to do loans, but I have been operating for the entire time on the Real Estate End of it. The loan thing is [...]
Great post, as I too have wondered about what prospects must be thinking sometimes!
I love the book you mention – “The Mortgage Myths” by Ralph Roberts and Chip Cummings. For new clients, it’s actually one of the first things I give them when they walk through the door. I don’t want to waste my time with a “rookie” homebuyer, so this not only educates them, but I am finding it also ties them closer to ME as the real estate professional, and prevents them from walking.
Ralph and Chip also have a follow-up coming out called “Foreclosure Myths” which should be a good read as well.
Thanks Connor, and Keep up the good work guys – you help make our industry look better!
All the best –
Roger