According to Realtor.com, there are eight common buyer questions. We will address THREE of those questions today and the others next month.
1. What home can I afford?
Before assisting any buyer, an experience agent makes sure that the buyer has spoken to his bank or a mortgage broker. The information provided by the buyers allows the broker to give the buyers a range within which to work.
That agent will search within that financing framework. Based on the bubble our industry just experienced, along with the new TRID* rules, no buyer should experience a short sale or foreclosure because they were not properly informed of what they could afford (if his income earnings remain the same and there are no circumstances that could not be avoided).
2. Can I buy a home and sell my current one at the same time?
According to the Florida Realtors, the TRID rules may have created a “traffic jam” regarding simultaneous closings. They advise to avoid simultaneous closings, at least initially, because that would involve “multiplying by two the anticipated complexities TRID will likely cause, and the second transaction may fail if the first closing does not occur.” However, once the new TRID rules have been in existence and we as an industry learn to comply and work through these new rules, you will see simultaneous closings.
Cash transactions do not involve TRID.
To effect a simultaneous closing, your home needs to be on the market for sale before you begin looking for your new home. The ideal situation would be to close and rent back your current home so that the contract could be written without any sale-of-current-home contingency. If you are financing your new home, the qualification letter written by your lender will not have to mention that you can afford your new home subject to selling and closing on your current home.
Some buyers have lost bids due to the pending closing of their current home – especially if they are bidding against a cash buyer with absolutely NO contingencies.
An experienced sales associate will help a seller/buyer navigate these waters.
3. How many homes should I see before making an offer?
Some have fallen in love at first sight; however, a look at the entire list of opportunities before making any decision – and an attempt to protect that buyer’s interest to keep him from losing his first love is the work of an experienced agent.
Because South Florida is seated in a seller’s market with low inventory, there have been occasions where a buyer had to act quickly, having all his ducks in a row with his financing and contingencies.
CoreLogic’s latest Equity Report revealed that 256,000 properties regained equity in the third quarter of 2015. This is great news for the country, as 92% of all mortgaged properties are now in a positive equity situation.
If you are a sitting-on-the-fence buyer, these facts should convince you to get off the fence NOW.
*TILA/RESPA Integrated Disclosure rule