Buyers: why I care about your loan pre-approval Part 1

One of the first steps in a shopping for a home is for buyers to get pre-approved for a loan.  This pre-approval starts the lending process, lets the buyer know how much they can afford and helps buyers decide about the price range in which they want to shop. Make note, many buyers are pre-approved for more than they are comfortable spending.  Often buyers, once they get a pre-approval, figure they'll actually shop for a loan and commit to a lender once they find a house, using the first pre-approval to submit with an offer.

Ack!  Equipped with that pre-approval letter, we, as buyers' agents, write an offer to purchase based on that pre-approval.   In the offer, it states the buyer will get financing, and if there are changes ; new lender or switching to a different program, the seller must be told promptly. In certain cases, the seller must agree to the changes (to a new loan program).  In any case, failure to tell the seller of the change can be seen as a breach of the contract, which could in turn lose the buyer the house and their earnest money.  It really does matter and I really do care.

New, stringent loan processes make a 30 day close difficult.  Part of the purpose of the pre-approval is,  the loan process is actually started BEFORE the offer is accepted.  Credit reports are run, employment  verified, assets and liabilities verified.

Changing lenders after the offer is accepted makes for a longer closing, makes the buyer look flakey for not having completed their research before making an offer, and can look as though the buyers agent is not doing a good job of managing the transaction.

So, dear buyers, the time to shop around is BEFORE you make an offer. If I seem less than thrilled when you switch lenders part way through a transaction without asking me, its because you have just jeopardized your ability to buy the house.

I care where you get your loan because the success of your purchase, which is seen as my responsibility, rests largely on your lender.  Many real estate companies, RE/MAX equity group included, have in house lenders.  This is not some nefarious scheme to somehow trick you, and my commission on your purchase is the same no matter what lender you use.  But, I know how our in house lender works.  I know when a pre-approval letter is written that the file has actually been through underwriting.  That pre-approval letter you get after talking on the phone to a lender, and submitting zero paperwork,  has definitely not been through underwriting and isn't worth the email it is sent in.  I know the rhythm of our in house lender's loan processing and best of all, if push comes to shove, we may have the ability to get certain conditions waived, or fulfilled in a more expedient way.

There are several lenders in town, either in house lenders in other companies, or merely reputable lenders who do a high quality of business, with whom I am happy to work, know they'll do a good job and have confidence in the process.  If it feels like I'm steering you to certain lenders, its because I am.  No, all lenders are not the same.  The  benefits I get when you work with a lender I suggest are same benefits you enjoy; a smooth escrow period and  the successful purchase of your new home.

I maintain a list of several lenders in the area with whom I have had successful transactions.  I'm more than glad to provide this list to you before you start shopping.  Just ask :)

In the next post, I'll tell a few stories of lenders and transactions gone bad.

October 2014 Portland Market Statistics

Statistics are out, showing Portland area real estate activity for October.  We're still in that active, but kind of flat market in which we have been.  Yes, the increase in closed sales reflects the predicted increase in activity in September, (once kids went back to school and folks got back to conducting real estate business).

 At our current rate of sales, it will take 2.8 months to sell all the properties on the market.  This is a slight decrease from September (3.1 months), and a drop from October 2013's  3.4 months.  So yes, the market is still moving quickly, with not many properties to sell.   Make note, 2.8 months of inventory has been, here and there our low.  We haven't seen less in recent memory.

Pending sales were down a bit from September, by 2.8%  but were up 16.7% from October 2013.  Closed sales also rose 13.6%  from October 2013, and 4.6% from September  2014.

Oddly, our market time got a tad longer, 65 days in October 2014 vs. 60 days in September 2014.  October 2013 had a market time of 76 days. .

The median year to date sales price is $285,000 up 7.5% from the median year to date sales price in October  2013 of  $265,000.

Typically, we see the market slow around Thanksgiving, until just after the first of the year.  I'm not sure how much slowing we'll see this year as the market still feels pretty brisk.  Our office, the NE Broadway branch of RE/MAX equity group, is on track to pass November 2013 in the dollar volume of sales, and in the number of transactions.

I have buyer clients in the market right now, and a listing (close in SE) hitting the market next week.  Fall is the time serious buyers and sellers get it done.

Call me if you want to jump in.  503-312-8038

Read the full Portland area report here.

Lipstick on a pig, or attention to detail?

In this continued market of high demand properties and multiple offers,  little things can play a large roll in the success or failure of a transaction.

Here are a few "little things":

When an agent arranges to show my listing, they are good communicators about when they'll be there.  They show up on time and leave the property as they found it; lights on or off, doors locked.  Extra points if something is out of place and they call to let me know.

When an agent says they are writing an offer, they do and send it to me when they say they will. The offer is complete., They have merged the various pdf's into one pdf. The offer is accompanied by a pre-approval letter, a letter from the buyers to the seller and a note from the agent about the buyer and their process.  If I have indicated a specific escrow company in the listing , that same company is named in the offer.  If we're looking at seven offers, and we often are, and they are similar, and they often are, the little things in the offer can make all the difference in its getting accepted. 

And once accepted; the promissory note for earnest money is redeemed within the required timeline, and I am provided a receipt or proof. I don't have to ask or go hunting for it.  Inspections are scheduled promptly and I am informed in a timely manner.  So when we get the repair addendum in which the buyer is making certain repair requests of the seller, we still feel good about the buyer and their agent.  If the inspection process has been a shitstorm of bad communication (and it can be), the seller isn't super pre-disposed to satisfying buyer requests.

And sellers; agents and home inspectors very quickly form an opinion if your house has been well cared for, or neglected.   We notice all sorts of things, but here are a few that jump out at me.  There is a bathroom fan that works and is used.  There is a service record of the furnace on, or by the furnace.  All the doors are opened with one key, and they do open. The swing of the screen/storm door is on the same side as the actual door, there are no burnt out light bulbs leaving us wondering if its a bad light bulb or a bad receptacle, and hand rails are solid.

Oh yes, staging, de-cluttering and judicious painting work wonders.  But those cosmetics can be lipstick on a poorly cared for pig.  If you're thinking of selling and want some tips on putting your house in shape.  I'll be glad to help.  503-312-8038