You can spend months trying to sell your property, but if you aren’t working with the right buyer you could be doing nothing more than wasting your time. Any time you are looking to sell to an end buyer, the quality of that buyer is almost as important as the price you are selling for. With all of the changes in guidelines and mortgage programs, a preapproval your buyer received just a few months ago may not be relevant today. If your buyer is not really approved for their mortgage, you will miss out on other potential buyers and it will set you back months.
Imagine negotiating with a buyer for weeks and making any changes to the property they want only to find out a week before the closing that their loan is not approved. This happens more than you think. You cannot know everything about who is buying your property and every step in the process, but there are some basic things you can do to put yourself at ease. The first step is to contact the lender or broker and see how updated their preapproval is. Many times, their prequalification letter may be months old. When they are finally ready to make an offer, things could have changed.
There is only so much information the broker can tell you about their buyer. They cannot, and should not, tell you their credit score, their income and where they work. They could give you an idea as to the relative strength of their credit by telling you it is strong and their debt to income ratio is low, but they should not get into specifics. This leaves you having to have faith in the process and in the buyer. What you can do is to ask the broker or lender to keep you in the loop throughout the process. Between the title, the inspection, the appraisal, the underwriting process and even the insurance, there are things that could derail the purchase. If you ask the lender to be upfront with you every step of the way, you will have a better idea as to where you are and what is going on.
A new credit card could lower the buyers score just enough to deny the loan. A storm could damage the roof of the property. The point is that the loan is never closed until you sign the closing paperwork and have that check in hand. What you don’t want is to be dragged around by a buyer looking for extension after extension. Every extension request must be accompanied by a valid excuse and a remedy to the problem. At some point, even if you are 45 days into the process, you need to walk away and find a new buyer. If you don’t feel that the issues are real or can be fixed, the quicker you can move on the better chance you will have at finding someone else at your price.
There is a lot that goes into buying and selling real estate. Finding the right buyer is the most critical step in the process. Stay on top of the lender and know what is going on every step of the way.