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2 Things That Sellers Need To Know About The Mortgage Process

Saturday, March 30, 2019   /   by Dennis Isip

2 Things That Sellers Need To Know About The Mortgage Process

Mortgages are for buyers, why do I need to know about it, if I’m selling?


There are 2 things a seller needs to pay attention to:

  • Buyer Pre-Qualification or Pre-Approval
  • Seller Concessions


Price-It-Right-STM.jpgPreQualification


I often come across a lot of renters who do not have an idea of what it takes to buy a home. The variety and number of documents alone can be intimidating, but being a homeowner can be one of the most financially rewarding experiences in one’s life. However, that’s assuming that the buyer gets the right house, done in the right way.


Of course, there are other non-financial benefits too: fenced backyard for the dog, school for the kids, no neighbors above or below you, customizing your kitchen, and in some cases, having an attached garage. (This knowledge gives the seller a leg up in negotiations.)


Here’s What Buyers Need To Qualify in Today’s Market
  • Down Payment - Generally between 5-20% of the purchase price. (Many buyers are putting down 10% or less - with some qualifying for as little as 3%, especially those eligible for a VA loan.).
  • Income Verification, Credit History and Asset Documentation
  • Impartial Third-Party Appraisal: Your lender needs to verify the value of the house you want to purchase
  • Stable Income
  • Good Credit History

As a seller, it is important to make sure the buyers are qualified, as outlined above, before accepting their offer.


If the buyer is represented by a good real estate agent and/or lender, they will provide a Pre-Approval letter instead. This means that the lender has actually verified the income and debt documents. In a hot seller’s market, the pre-approval letter is always a good option for both parties.


From a seller’s standpoint, accepting an offer without a solid financial foundation is risky. The property can get tied up during the escrow, thus repelling away other potential buyers. If after 3-4 weeks the deal falls through because of financing, then all of that time would have been wasted unnecessarily. 


Seller Concessions


Depending on what type of financing the potential purchaser is obtaining, the option to receive seller concessions may or may not exist.  There are many home buyer’s in the marketplace with impeccable credit scores and solid jobs but are short on the money required to purchase a home.  Seller concessions allow a home owner to contribute a percentage or dollar amount towards a buyer’s closing costs and/or pre-paid items.  For example, a buyer who qualifies for an FHA mortgage can receive up to 6% of the purchase price towards their closing costs.  

There is actually a section in the standard WA State Purchase and Sale Agreement, that the buyer can optionally use when writing up their offer. Knowing when and how to use this option can make or break the sale of the home.


While this is normally initiated by the buyer, the smart home seller, where applicable, can also make use of this technique in a counteroffer to keep the cont


This can be a significant amount of money and can be the difference of a buyer being able to afford a home or not or the seller being able to sell their home!



Bottom Line

Being aware of the buyer pre-qualifications and seller concessions can potentially put more money in the seller’s favor.


Please don't hesitate to reach out to me directly,

Dennis Isip | Spokane Realtor
Haven Real Estate Group
Dennis@SpokaneHaven.com
(509) 795-0202

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Haven Real Estate Group
Cambria Henry
304 W Pacific Ave; Suite 360
Spokane, WA 99201
509-590-4701

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