Vail Daily column: Be ready to buy at the right time
It seems lately I’ve developed a number of email pals that are looking for a home but still think that if the right one comes up they will have weeks, if not months, to put in an offer. In today’s market if a home is well priced and in good condition it will often sell in a matter of weeks, if not days. This is particularly true with properties less than $1 million, which attract attention from the area’s residents.
The buyers who are being successful in their quest for a home are those who are fully prepared to make an offer they know they can qualify for. They have already decided on how much they can comfortably put down, and what their comfort level is with monthly payments.
The potential buyers who seem to fail time and again are the ones who have the mindset that if they see something they like they will then start the process of getting their paperwork in order to pre-qualify for a loan. Often it seems they agonize about how much of their savings they wish to put down and how much payment they are comfortable with (note there is a difference between what they might qualify for and what they are comfortable with).
Thinking things through
Typically, these potential buyers call me and ask what the payments would be on a particular scenario and how much they might need to put down. Then they have to think about their future comfort level and where the down payment will come from and more often than not, when they finally decide to make an offer, the property is long gone.
Often, rather than use this as a motivation to be fully prepared for the next opportunity the buyers will wait until another hot property comes up and go through the same decision-making process.
The successful buyers are the ones who have committed to parting with a set amount of their nest egg, and have come to grips with a payment range in their comfort level. Often, if they are currently property owners, they have their place up for sale, and have accepted that if their place sells before they find a new one they may be consigned to roughing it and renting something for a short period of time until they find the right new home to buy. Others are confident that their current home will sell, they will find a place and everything will work out fine — and usually it does.
So what are the steps a prospective buyer needs to take to be ready to move quickly when an offer presents itself? There are two sides to this.
First, a buyer needs to find a mortgage lender that they feel comfortable working with and get fully pre-qualified. This entails giving the lender your income and asset information and getting your credit report checked. The lender will tell you about how much of a mortgage loan you can qualify for, and what your options are for down payment and terms.
Second, the borrower must then firmly decide on his or her comfort level in terms of down payment and monthly payments. There should be a range and some flexibility but definitely set a high and low range. A flexible set of parameters on what you want to buy in terms of size, neighborhood and amenities is good to have as well.
If the buyer has a home that must sell prior to buying something new, and have it listed for sale, then it would be wise to study the for sale ads and consult with a Realtor to see if there are at least a few likely options out there for purchase if your place should sell quickly, and certainly continue the house hunt on a regular basis so if you get a contract on the place you are selling you will have a good idea of what you want to purchase.
The last thing you want to do once you have a contract for the purchase of your home is to realize you have no idea of what you want to try and purchase.
By being prepared you will be far more likely to score a great property when the timing is right.
Chris Neuswanger is a mortgage loan originator with Macro Financial Group in Avon, and may be reached at 970-748-03424. He welcomes mortgage related inquiries from local readers. His web site and blog is http://www.mtnmortgageguy.com.