. . . .And Why You Should be Working with an ‘ABR’
Well, sit back and relax – if done right, it can be both exciting and fun.
The first thing to do, of course, is contact a Realtor who is an Accredited Buyers Representative – ABR. The coveted ABR designation behind their name indicates they are well-trained and of a mindset to always put their buyers’ needs first. And isn’t that what you should expect from your Realtor?
When working with a buyer, the first thing I do is refer my buyers to a lender if they don’t already have one. It is extremely important that we know right away the price range that we will be dealing with. And since I’ve had buyers who for various reasons could only use the income of one spouse, the price range of the homes we would be looking at is not a matter that can be taken from granted.
Once we establish a price range, the next thing my clients need to do is decide on their list of ‘needs’ and ‘wants’. What’s a ‘need’ for the husband, might not even be a ‘want’ for his wife! LOL – that’s okay. . . . We’ll work through it.
When we finally narrow your choices down to one or two homes, you will be provided seller disclosures to read over. This is a very helpful document for letting you know if the house has flooded before, suffered fire damage, age of the roof, etc. Of course, there are circumstances, such as with foreclosures, where the seller cannot provide this information since they never lived in the house.
The next step is to negotiate price and terms. Your Realtor should be willing to provide you with recent sold comps as well as the current market competition. She should also be a good negotiator on your behalf, striving for a win/win contract – buyers who are only focused on trying to ‘steal a deal’ most often end up losing out on the house they love.
Once we are ‘in contract’, it’s all about dotting the i’s and crossing the t’s. There will be the inspection period during which we may ask for repairs that are deemed to be so serious, that without correction, they would be a deal-breaker. If the seller decides not to cooperate, the entire deal could come to a halt right there.
The exception to this are the foreclosures and ‘short sales’ – they are always a ‘take it or leave it’ type purchase since the sellers have no money budgeted for repairs, and the price has been lowered accordingly. In these cases, the inspection simply helps the buyer decide whether the price is good enough that he wants to move forward with the purchase anyway, or stop the process altogether.
In the meantime, the loan officer has a LOT to do to make your home purchase a reality. The loan process involves qualifying the buyer based on credit, income, employment, and verification of funds. Often it means clearing up questions on a credit report, or obtaining ‘gift’ letters to justify cash funds. For the work the loan officer does, he or she deserves every bit of cooperation and patience from the buyer…. The details are never ending, and any hiccups here could kill the deal.
The cost of the appraisal goes to the buyer, but the loan officer is actually the one who orders the appraisal – not the seller and not the buyer. The appraiser must be a totally neutral party. And except for an all-cash purchase, a house must appraise for at least the purchase price since no mortgage company is going to put up their money for a house that is over-priced at the time of purchase.
Finally the buyer’s loan package moves from the loan officer to the underwriting department. They may take as long as two weekw to review every detail of the loan package and give their final blessing – and during this process they may ask the loan officer for additional information and documentation from the buyer.
The main thing to understand is that from the lender’s vantage point, it’s all about making good loans. Even though the home will be used for collateral, they don’t ever want to end up with the house – their goal is to end up with iron clad buyers who will honor their commitments and pay their mortgages on time.
And last but not least, let’s not overlook the work of a good title company. Ultimately, they will pass the ‘Act of Sale’ (or ‘closing’ as it is called elsewhere), but before that can be done, they must research the court records to be sure any outstanding liens against the title will be cleared up prior to passing title to my buyer.
Whew!!! Does all this seem overwhelming? Well, relax.
Your Realtor and loan officer will see that everything gets done in a smooth, timely manner, and all you need do is follow their lead. During the entire process, your Realtor should be willing to answer any concerns or questions you may have… another reason to choose someone like me with the ABR designation, rather than an agents name off a yard sign.