Pre-recession mortgage loan approvals where all the buyer had to do was fog a mirror are a dinosaur of the past we’d like to leave buried. Those mortgages were known as stated income: The borrower states the income they earn and the bank says: Yeah, okay, we’ll give you a mortgage we know you can’t afford, especially when the interest rate resets.
Mid Silicon Valley home buyers actually have to qualify for a mortgage. The bank wants to see tax returns, pay stubs, bank statements. The less the buyer has for a down payment, the more closely the bank will review the documents.
Selling your home here in the Mid Silicon Valley home market is much different than other parts of the country. Diligent realtors require the buyer to be pre-approved for a home loan; that’s not a standard everywhere. In some places where the homes don’t sell like a rocket ship to the moon, the buyer puts an offer on a property and then they go get pre-approved while the seller waits for the outcome.
Agents require that home buyers prove they have the down payment available. We want to see bank statements. Their word is not good enough anymore. Why? Because people lie.
Another line of defense is knowing the agent who represents the buyer. Their reputation has an impact on whether you should consider that offer.
If the agent is known as a professional who gets the job done, their offer should be considered seriously. If the agent is a dummy that either doesn’t know what they’re doing or doesn’t care, their offer and their buyer should be scrutinized closely. By asking questions about the buyer’s situation we can find out well approved they are.
For example, is the buyer’s credit so shaky that if they buy a popsicle they’re going to lose their loan? Where is the deposit coming from? Is it from mom and dad who are actually going to make the decision on whether junior buys this house? So that when you accept the offer the parents then pop into the picture and have to see the house – and approve the purchase? Where is the buyer from? Are they local and know the Mid Silicon Valley housing market? Meaning they know how ridiculous the prices are here with Mid Silicon Valley home sales. Or are they from out of state, they just got here and they’re in complete shock? Are they writing their first offer ever? That matters too. Typically homebuyers don’t get the house with their first offer. They want to test the water with the seller. They don’t believe their agent when she says: You can’t do that.
Even with the precautions your agent will take there are still things the buyer can do to royally screw up the sale of your Mid Silicon Valley home.
Here are five ways a buyer can ruin the sale of your Mid Silicon Valley home
Getting a new job
A buyer is approved for a loan based on the information they supply. They work at Google; they make X dollars per year; they have X dollars for a deposit. If they get a new job at Apple during the escrow, the bank is going to have a fit. If they stay in the same industry, same job it’s not as bad as going from one profession to another. But it’s still going to require talking the bank down from a ledge.
Before IPOs became so well known, it was worse. If the buyer changed jobs – no matter the situation – they lost the loan. Now banks are familiar with employees jumping from company to company. That doesn’t mean it’s an easy process to get it approved.
Obviously buyers are concerned about the interest rate and the fees associated with their new mortgage. Radio and TV ads are a catalyst in making home sellers’ nightmares come true by advertising incredibly low “teaser” rates and no fees.
So if the buyer says: Oh, that sounds good. I think I’ll call Quicken Loans. The problem with that is Quicken Loans will pull their credit. Every time the credit is pulled the credit score goes down. The original bank sees that they’re applying for another loan – not that they’re shopping. Poof! There goes their mortgage.
Pulling a credit report to buy anything from furniture to a phone to a new car will ruin your Mid Silicon Valley home sale.
Making a large deposit that can’t be documented
The bank wants to know where every penny in the account came from. It will throw off their average income and the bank will not be pleased if money falls from the sky and into their account.
If it doesn’t cause the loan to be revoked it could cause a delay in the close. When the mortgage lender learns about this big deposit they’re going to want proof of where it came from. They’re not going to loan the money without it. If it doesn’t delay the close it will still give everyone a giant headache to provide the documentation the bank wants.
Paying credit card late
Before the mortgage lender gives the final okay, they will check to be sure nothing has changed. Get a late on the credit card payment, credit score goes down, you see what’s coming next.
Closing a credit card
Closing an account, settling an account or paying it off is just as bad as opening a new account.
Credit is approved based on past performance. If the buyer closes the card, it changes the credit that’s available to them and also erases the history of responsible payments.
Buyers get cold feet. Did I pay too much? They talk to their friends who tell them they paid too much. Maybe I should have asked for the seller to pay for… OMG, can I afford this mortgage?
They can’t sleep because they’re so nervous. They lay there in bed and think about all the things they should have done or could have done or were told to do. They drive to work wondering if they’re doing the right thing. They’re stressed out all day questioning everything.
Now, in the Mid Silicon Valley home market buyers either have very few or no ways to allow them to get out of the contract. However, it happens. To keep that buyer in contract when all they want to do is go home and hide under the blankets is hard to do. It will keep you from selling your Mid Silicon Valley home to someone else. It could involve attorneys, costing a fortune. Most of the time it’s just easier to let them out and sell the house to someone else.
Other helpful articles about selling your home:
Today’s Real Estate article “Things buyers do to ruin your Mid Silicon Valley home sale” was written by Vicki Moore, Today Sotheby’s International Realty.
You’ll find Vicki selling homes in Mid Silicon Valley, San Mateo County, in the cities of Foster City Homes and Condos For Sale, Pacifica Homes and Condos for Sale, Redwood City Homes and Condos For Sale, Redwood Shores Homes and Condos For Sale, San Carlos Homes and Condos For Sale, San Mateo Homes and Condos For Sale.
Call Vicki at 650-888-9268 or email [email protected] if you have questions about boosting your home’s value.
Vicki Moore, a licensed California Real Estate Agent serving Mid Silicon Valley | San Mateo County since 1998. Today Sotheby’s International Realty, San Carlos, CA.
You can speak with Vicki by calling/texting her at 650-888-9268 or you can email her at: [email protected] if you need to sell your Mid Silicon Valley home.