When calling on a listing and hear that there are multiple offers, I prepare myself and buyers for battle. But hopefully, we are already prepared and are in what I like to call “an athletic stance.” In other words, we are prepared and ready to move at a moment’s notice.
Frequently, the number of buyers searching for their dream homes in San Diego greatly outnumbers the number of homes for sale and they are faced with multiple offers from competing buyers. This has led to a highly competitive market arena where buyers will need to stand out. There are many ways to prepare for entering this competitive market, but the first step should be to get pre-qualified or pre-approved for a mortgage. A pre-approval in hand will be necessary to attach to any offer you make–along with proof of funds to close.
Speaking from experience as a listing agent, we won’t consider an offer that doesn’t include a pre-approval letter from reputable mortgage lender along with proof of necessary funds to close. This is especially true when we have multiple offers.
Even if you are in a market that is not as competitive as ours in North County San Diego, understanding your budget will give you the confidence of knowing whether the home of your dreams (or something close to it) is within reach.
Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”
Especially when facing multiple offers from competing buyers, it can be very important to work with a local real estate professional who has relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”
Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:
- Capacity: Your current and future ability to make your payments
- Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
- Collateral: The home, or type of home, that you would like to purchase
- Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.
Finally, we find it helps to have our clients write love letters to the seller. Some of our clients have included pictures of themselves, their family and even their dog. It helps sellers to know that the buyers of their home will love and appreciate it as much as they have.
Bottom Line
Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so. To discuss this further or to begin the pre-qualification process, call Scott or Roberta Murphy at either 760-402-9101 or 760-613-6190. Alternatively, you may email roberta@sandiegopreview.com