Why Austin New Home Builders & Resellers Prefer Pre-Qualified Buyers

April 20, 2007

I am writing this speaking to Austin first home buyers, but there is a tip later for the move-up buyer, so there is something here for all.

First of all, first home buyers must understand that when we ask you to pre-qualify, it’s not always just about your credit rating.  It is well believed that a serious buyer will not only know their credit standing, but also how much home they qualify for.  So, basically, you could be out looking for a simple starter home, not even realizing that you could actually qualify for a notch above or maybe even a nicer subdivision with more opulent amenities!  Everyone loves a pool, but ooh la la- a water slide?! Maybe you could live a little closer to your work because a qualified loan officer has weighed your debts versus your income and sees the potential for an additional 10K in spending money.  At Single Pointe Realty, we call this knowing your buying power!

Your credit score (or your FICO score) is also an issue; however, it is possible to have a lower FICO score and still qualify for a fantastic rate.  More on this later…  The lender is more or less looking to see how well you manage your monthly bills; looking for slow pays, late pays, or discharges and/or judgements.  Now, many of you know how well you pay your bills, but often times we assume (out of guilt or buyer’s shame) that every late payment we make is recorded (as if all retailers are that speedy or organized).  In fact, that is often not the case, or sometimes looking at your report it may reflect late pays that never happened and you can prove it!

I can go on and on, but I think I’ve made my point that the truth is that we will not know until we look.  A great pre-qualifier can help go over the details of your report and break it down for you, create a plan for what we need to do, or discover if anything on your credit is even adversely effecting you!  Chances are, it isn’t!  But your Real Estate Agent will certainly appreciate knowing if there is a battle to be won over your credit upfront before you go out and put yourself at a negotiating disadvantage by NOT Knowing Your Buying Power!  In fact, when I lead in to begin the negotiation process, one of the first things out of my mouth is- “my buyers are qualified and are prepared to buy now for $X price.”  See how that works?  Have chills? Don’t be nervous about this part of the process, as it only strengthens your hand in home buying. 

So to answer the question of why Sellers prefer pre-qualified buyers? Because! Who wants to take a home off of the market for those who do not even know if they can buy?  In fact, they rarely will, and it changes the subject from, qualified/buying/at what price to we’ll hold it at the origional price for 72 hours while you and your agent play catch up.  Who wants that? You sure don’t!

So you’re welcome to get started on qualifying while I chat with the Move-Up buyers…

Move-Up Buyers, I cannot stress this enough- before you put your home on the market to buy a new home, it is in your best interest to also pre-qualify.  Imagine selling your home with a decent profit, only to realize you are not qualified to buy!?  It does happen.  So, when you meet with your Listing Agent to List your home, put together not only your selling strategy, but your buying strategy.  I assure you, this advice may save you one heck of a nightmare.

Happy Buying!

That Real Estate Guy

Posted by Benn, Single Pointe CEO | Filed Under Blog, Buying, New Construction, RE Practice 

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