The Homebuying Process: Step 1

I was in a real estate class the other day with an agent who works in a mountain ski town - tourists, second homes, big bucks.  She said she doesn't take a prospective buyer out at all until they have spoken to a lender and are reasonably sure they can purchase a property.  She does this in part because some folks from out of state may be surprised by the price tags they see and not know if they can afford the area, but mostly because it's become a favorite hobby of visitors - call up an agent on the weekend and have them drive you around to see all the fantastic houses.  Like your own personal tour of homes, driver and lunch included.

Don't fall in love just yet...

I know quite a few agents who won't schedule showings until the buyer has been pre-qualified.  This ensures that everyone's time is spent productively, seeing homes in a range that the buyers can afford.  It's hard to recover if you find that you must reduce your budget by $30,000 after you've already set your sights on a particular house.  Also, sellers these days tend not to look twice at an offer if it isn't accompanied by a pre-qualification letter.  This indicates that, at the very least, the buyer has begun a financing conversation with someone.

It's also important to talk to a professional and not get too discouraged by media stories about the industry.  Markets are hyper-local these days, and national statistics will often not apply to your area.  In addition, there are many financing programs available that buyers may not be aware of.  Recent changes to underwriting standards may loosen up mortgage lending and help the pendulum begin its swing back toward equilibrium.

In other words, don't let media hype discourage you from investigating your options.  It is never too early to have a conversation with a mortgage lender.  Even if you are still in the surfing-the-internet-for-properties stage, your expectations will be more realistic and your search will be more productive.  Often, a lender can take some basic information from you over the phone, pull your credit, and let you know that day the amount you can likely get approved for.  They can also alert you to any problems in your credit report that you need to address.  This doesn't obligate you to work with one lender in particular; I always encourage clients to talk to at least two to be sure that they find someone they are comfortable working with.  I have relationships with some great people in the area that I really trust - give me a call if you'd like a few names.

images:  Triumph Mountain Properties

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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