Across the Picket Fence - Interacting with BuyersReturn to article list
Across the Picket Fence
Topics: Pricing | Contracts | Disclosure | Offers | Financing | Buyers | Agents | Buyer Issues
Dealing with Buyers
Seller: How do I go about pre-qualifying buyers? I don't want to take my house off the market for someone who won't be able to afford it.
Simply request that the buyer provide you with documentation from a lending institution within a certain number of days after the contract is signed (five business days is customary) varifying that they should qualify for the mortgage amount at the current interest rate. This is no guarantee that the financing will be approved, however. Rather, it is a statement from the lender that the loan should be approved provided the borrower does not have problems with his/her credit report, and that all the information provided checks out (income, amount of debt, assets, etc).
If your buyer come to you already pre-approved by a lender, this is the best you can hope for. It means their information has already been verified by the lender.
Seller: The problem I'm facing is that buyers are automatically offering me 5-6% less than my asking price, arguing that since I don't have to pay a commission I should be able to sell it for that amount. It's priced very competitively now, and I can't afford to go any lower. Should I raise my price 6% to avoid this confusion?
No. If you raise your price, you'll lose your competitive edge. First, are you sure you're "competitively priced"? Have you had an appraisal done within the last year? If the answer is yes, then you should have no problem convincing your prospective buyers that the house is worth what you're asking. You may even want to show them the appraisal document to demonstrate that the asking price is fair.
Also, explain to your buyers that the agent's commission is typically added on to the seller's bottom line! Since you didn't have to inflate you price to cover this fee, yours is already at a bargain.
Seller: I have a pretty nice house and would like to sell it myself, but I'm not much of salesman. I can be honest to a fault, and am afraid that I'll turn off interested buyers.
An attractive, fairly priced home sells itself! A buyer's decision to purchase is based upon theor space and location needs, taste and style preferences, and financial capability. The buyer looks to you for information, not a sales pitch! So relax... no one knows your home better than you do. As for your honesty, it is a plus -- not a fault. The buyer will be more likely to trust you if he knows you aren't withholding the truth. Try, however, to initially focus on the many positive features of your home, rather than the negatives, when showing your home to a prospective buyer. In any case, the less you say the better. Let your house do the talking!
Q: Buyer: The seller of the property I want to buy recently had a professional appraisal done. Why does the mortgage lender need to do another one (at my expense!)?
Most mortgage lenders will accept a recent appaisal commissioned by a second party (the seller, for example). It could be that the particular appraiser is not someone that the bank usually does business with. This does not mean that there is anything wrong with the appraiser or the appraisal... just that the appraiser is not on the lender's "list". It might be worth your while to shop around for a lender that does business with this appraiser, since it will greatly speed up your loan approval process, as well as save you a couple hundred dollars (to have another appraisal done).
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