Which Comes First, the REALTOR or the Loan Officer?

It is often debated, the philosophical question, “which came first, the chicken or the egg?” There are many ways to address that question. (Though my preferred way is to show a lolcat photo of a cat in a chicken hat and avoid the discussion all together.) But really there is no definitive answer.

When buying a house, there is a much less philosophical but equally confusing dilemma, "Which comes first, the loan officer or the REALTOR®?" Both professionals are equally important in purchasing a home but who should a home buyer contact first?

As a REALTOR® I would prefer for a buyer to contact me first. Whether you are a first time buyer or have a property to sell, contacting an agent is an important first step.

If you have a home to sell, the loan officer will need to know an approximate value of the home you will be selling. Of course, you and the mortgage professional can guesstimate. But if the estimated sales price of your current home does not reflect a realistic selling price, you may find yourself short of funds for a down payment.

But even a home buyer without a house to sell could find it easier to contact an agent first. Recently, I was called by a first time buyer who was preapproved with her bank for a first home. She explained that she was going to be buying with a conventional mortgage and showed me the letter from her lender. Something just didn’t seem right so I had her run the numbers with a different mortgage professional that I know who has years of experience. It was a good thing she did. The first loan officer discounted a dispute on my client’s credit report and her limited credit history. She would have never been able to obtain a conventional mortgage. If she had written an offer using the original preapproval letter, her earnest money could have been put at risk if she didn’t qualify for the mortgage.

Home buyers do not always know where to find a good loan officer or what questions to ask to determine the experience level he/she has. As an experienced real estate agent, I have a list of  high quality mortgage professionals I have worked with previously. Experience can prevent most situations from becoming big headaches down the road.

The bottom line is, start with someone you can trust. If you find a real estate agent you trust first, then ask for a referral to an experienced, professional loan officer. Conversely, if you know a high quality mortgage professional that you trust and want to work with, start there. Most REALTORS®, myself included, will work with any loan officer that represents their client in a professional manner. The key is to get preapproved before starting to look for a home. Knowing what you qualify for, down payment required and an estimated monthly payment, will ease the stress when you start viewing properties. It’s hard to write an offer, if you do not know what you can afford!

Copyright 2013 www.terieckholm.com

The News is IN! Homebuyers Wanting a Good Deal Need to Move Now!

Just two weeks into 2013 and you’re thinking this is the year to make that move. The Minneapolis St Paul real estate market is on the move again so it you are planning to get that “bargain of the century”. Well, maybe you should have bought last year. Check out the recent Pioneer Press article, which outlines the Twin Cities year to year sales statistics. Prices are on the rise. But there are still deals out there for buyers, even if you do not want a foreclosure or short sale.

Chart from 1/11/13 Pioneer Press article by John Welbes

Traditional sellers are getting houses on the market early this year. What is a traditional seller? Those are the people who own a house and have enough equity to sell it without having a bank involved. Many traditional sellers have been hiding in the woodwork so to speak for the past few years when prices were so unbelievably low. Now that they are on the rise again, they are ready. Homeowners have spent the past few years updating and repairing their properties so they would shine in a changed market. When a traditional seller gets a showing, the home is a joy to enter with a shoveled walk, warm temperature in the home and sometimes a cookie on the counter. When a traditional seller gets an offer, they respond quickly. It’s a joy to work with a traditional seller when buying a home.

So what should a potential home buyer do if they want to make a move in 2013?

• Get PREAPPROVED. Those updated cozy homes offered by traditional sellers are getting multiple offers. Sellers want to know that you can buy the home when they receive the offer. Having a preapproval from a professional, educated loan officer means you will not miss the change to put in an offer on your dream home. Even if you tried to get approved before but were denied, it could be worth talking to a loan officer again. Mortgage preapprovals are up 11% …And the best news, rates are still at all time lows! (If you are not sure where to get pre-approved, call or email me as I have some great contacts!)
• Work with a REALTOR® It is not the time to run around willy-nilly calling every agent that has a home listed to see the property thinking you could save money. While you are trying to connect with the agent of the perfect home that just listed, another REALTOR® could be showing the home to a preapproved buyer who could write an offer that day. Having your own agent, doesn’t cost anything in most cases but can get you into any home on the MLS that you want to see. Plus you can build up a rapport so when it comes time to write your offer, you know your agent is on your side.

What should a potential home seller do if they take advantage of this 2013 momentum?

• LIST NOW! Don’t wait until spring. You will get the best price for your home the earlier you list it. There is less competition now but there are many, many homebuyers in the market. Take advantage of this opportunity!

 

Copyright 2013 www.terieckholm.com

My First Question to a HOME BUYER--"Have YOU Talked to a Loan Officer?"

"Hello, this is Teri!"

"Hi Teri! I saw your ad for the home you have listed on 2 acres in Anoka County and would like to set up a showing."

"That is a nice home and it is still available but I have a few questions for you before I can show the home. Are you working currently working with a REALTOR®? No? Well, have you talked to a loan officer yet? "

That is how I begin almost every single conversation with a potential buyer. Have you talked to a loan officer yet? Okay...I realize it is my second question but it is the first real question regarding the buying process. See, there often is no point in setting up a showing on a home unless you have spoken to a loan officer. And this is not just about credit issues and ability to purchase either. You've no doubt heard the proverb about not putting the cart in front of the horse...which means don't get ahead of yourself. You as a home buyer need to understand type of loan you will be using, what payment you would be comfortable making and, yes, whether you have enough income and suitable credit score to get the loan. If you do not know these very important specifics on your home loan, there maybe no point in seeing the property.

An experienced FHA loan officer and blogger, Jeff Belonger, recently wrote a post about what REALTORS® need to know about specific loans in order for the deal to go through.  It is an interesting read that got me thinking about the home buying process and where it really starts. I do know that there are requirements for the sale of an FHA appraisal that would prevent me from showing most foreclosure homes to an FHA buyer. So for instance if a listing  I have is an as-is estate or foreclosed home that needs a  new roof,  but the seller refuses to replace, I know buyers that plan to use an FHA mortgage, will not be able to purchase the home. But if you haven't talked with a loan officer yet, you as a buyer will have no idea whether the type of mortgage you will use will work with the home.

So the conversation with myself and the potential buyer usually continues with the following:

"I would be happy to show you the home as soon as you have met with a loan officer to be pre-approved for a loan. That way, you will know what type of financing you will be using and if the payment is something that will work with your budget. I would be happy to refer you to a loan officer that would be able to assist you."

Please don't think that requesting you speak with a loan officer first is to putting  off showing you a home. This is really about "putting the horse in front of the cart" rather than the other way around. No buyer ever wants to be looking at homes they cannot afford. Knowing what price point for a home is considered affordable to your budget and the type of loan you will be getting will make the home buying process smooth and relatively stress-free!

Copyright 2011www.terieckholm.com