Get Pre Approved first | MD home buying process

Wednesday, November 25, 2009
Buying a home can be one of the most exhilarating and exciting times in ones life. It can also be a very emotional, difficult, & stressful time if you do not have the correct advice and process explained. The first step should always be to know where you stand financially if you are obtaining a loan in order to purchase the property. Getting a pre-approval and looking over a GFE(Good Faith Estimate) is increasingly important due to the strict loan approvals and all costs that are included in your monthly payment outside of just the principle & interest. A new buyer or even an experienced buyer, should speak to a loan officer as soon as they start to consider a purchase.

The Internet has made it easier and pretty much fun to look for homes. As a result buyers are looking at homes and wanting to shop before they even know what they are fully approved for, if they have the sufficient down payment, and if they would be comfortable with the monthly payment. Loans are more difficult to obtain, rates change regularly, there is no longer 100% financing options(Outside of VA loans & Rare Unorthodox Programs), and you must think about the other factors that make up the monthly payment. This includes not only the mortgage payment(Principle & Interest), but a few other important and often costly factors. First, if you're putting less than 20% down you will need mortgage insurance. Home Owners Insurance will be required as well. Second, you have property taxes. Last, you have to consider home Owners and condominium association fees.

All of this can be broken down and illustrated by a loan officer on the Good Faith Estimate.If you're thinking about buying, first see what loan amount you are approved for. Then have a loan officer run a GFE at that amount on a specific property that reflects what you desire. After that, you'll be fully aware of your buying power and it will make the process a lot smoother.

Ben White, Montgomery County Realtor
Specializing in first time home buyers in Rockville
240-848-3322

Buyer Agency- The Misconception

As an agent who uses the internet to interact and meet clients I consistently receive phone calls or e-mails from a potential buyer who is interested in a particular property. As always, I eagerly pull up the information and offer my assistance.

However, I often times run into the same question: “So, you’re not the list agent?” I explain the nature of the marketing and that I can help them even more than the list agent. Still, there seems to be a misconception about buyer agency and agency in general. People seem to feel as if they can possibly get a better deal or save themselves money if they contact and/or work the list agent directly. The misunderstanding extends further because buyers may not know that they do not need to pay a buyer agent for their assistance. Buyer agents are paid out of the seller’s proceeds and only if the agent can find you a home and successfully reach settlement.

It is imperative for an active buyer to obtain a sole Buyer's Agent (like me) and have the agent committed to working for them. Especially in this very competitive buyers market, which is still the case even with the change of seasons.

Without that full level of service the buyer will lose out on opportunities and have nobody representing them or their best interest. When the list agent is contacted they may try to work both sides of the deal (leaving the buyer with no representation) or they may refer you to a buyer’s agent who already works with the list agent.

This can leave the potential buyer in a situation where they do not have full representation because that particular buyer’s agent and the list agent whom made the referral will have extra incentive to sell the initial property. Furthermore, the idea that a better deal can be had is entirely untrue. The list agent will be the only one getting a “deal”, for they will get both sides of the commission (buyer & seller agents). If you’re a serious and active buyer, obtain a buyers agent ASAP!

Maryland Buyer's Agent, Ben White
240-848-3322 -- Get pre-approved

Short Sales- Good for Seller, worth your time?

Time and time again, buyers are contacting me and instantly informing me that they want to buy a short sale or foreclosure. I fully understand everyone’s desire to get a good deal on a home, but not every foreclosure is a great deal and short sales often times only hinder a buyer’s chance to obtain that goal.

When writing an offer or perusing a short sale the buyer must understand that once the owner/seller signs off on the offer and sends it to the lien holder for final approval, they are typically under contract for a certain amount of time depending on how the offer was written.

The list agent may ask for 30, 60, 90, or even 120 days to obtain “third party approval”. Anything less than that would be near impossible unless there had already been an offer that did the initial waiting. That commitment is negotiable, but it has been my experience that agents will request 60 days for approval. Meaning for 60 days you cannot write on any other properties. You are legally bound by a contract until that time expires.

Not to mention, majority of the time, the approval never comes and if it does you may be shocked to learn that the bank actually wants a higher sales price than what it was listed at. The list price is set by the agent and they may have no idea what the bank is looking for unless they have already had a buyer submit an offer who did the waiting.

There are many other negative variables that weigh against short sales, but the main issue is YOU NEVER REALLY KNOW how long it will take and if it will be approved.

Montgomery County MD Realtor, Ben White
240-848-3322