Limited inventory has more buyers competing in the marketplace and asking sellers to “pick me.” And, those buyers “not picked” are left feeling they missed out on their dream home. So, how can you leverage your lender to position your buyers for success?
- Have your buyers meet with a local lender that you trust. Applying online for a mortgage is great if your buyer has done this before. First time buyers benefit from having a face to face conversation with their lender. Meeting in person has proven to reduce stress, build trust and instill confidence. There are many loan programs with differing rates, payments and cash needed at closing. Getting all their questions answered and finding out which option is best requires more time than emails and phone calls allow. Although there are no bad loan programs, there are certainly programs that don’t match up to the best interest of every buyer. An educated client makes a better buyer!
- Get your buyers pre-approved (not just pre-qualified) before you make an offer on a home. A pre-approval is a conditional commitment to lend and means that an underwriter has reviewed the buyers documentation and has determined that it meets the requirements of the loan program. Granted, there could be issues with the home (title, condition or value), but the bulk of the loan review has already taken place. A pre-approval letter will put your buyers at ease and make the offer look stronger in the eyes of the seller.
- Make the closing date sooner rather than later. Everyone wins with a fast closing (say 2 weeks)! Consider a rent back if the seller needs more time to vacate the property. The seller gets their proceeds early, the buyer may get rental income to offset expenses, and both agents receive their commissions quickly. If you forgo a quick close, work with a lender that will allow you to remove contingencies quickly!
- Ensure that the lender reaches out to the listing agent to share that the buyer’s file has been reviewed by an underwriter and sets a communication schedule highlighting milestones for both agents.
- Reinforce with your buyer the need to do what the lender requests – get documents to the lender asap, do not make any changes to income, assets, or debts, and not to open or close credit accounts.
Have you thought about creating a “one stop shop” experience? Surveys show that today’s consumers, especially millennials, prefer this. You, the agent, are almost always the first point of contact. If you can assure the homebuyer that you have the ability to shepherd them through the process from pre-approval, to contract, to home inspection, and to settlement, you have a greater chance of them becoming your client.