Getting pre-approved is a great first step for buyers, but there can be a number of hurdles in the process. Here are a few cautionary steps that can be taken to make the experience as smooth and worry-free as possible.

Pre-Approval

Getting pre-approved has many benefits for buyers: it strengthens their buying power, assists in identifying their price range, helps communicate their preparedness to sellers, and, once their offer is accepted, helps to speed up the closing process.

Pre-approval is broken down into two steps: pre-qualification and pre-approval. During pre-qualification, buyers will share their financial information with their bank or lender to understand the approximate loan amount they can expect to qualify for. The pre-approval process is a little more involved, as the lender will conduct a thorough review of the buyer’s financial health to give them a more detailed picture of how much they can borrow, estimated monthly costs, and what interest rate they can expect on their loan.

Mistakes to Avoid After Pre-Approval

Being pre-approved doesn’t mean buyers are all set. There are certain mistakes that can throw buyers off course, and in some cases, lead to a denial of financing. Here are five common mistakes that can do just that:

1. Large Purchases

   Any large purchases—credit or cash—made after getting pre-approved can easily cause trouble for buyers. Making a large credit purchase equates to increasing debt, which raises a buyer’s debt-to-income ratio. Large cash purchases decrease a buyer’s cash-readiness from the time when they were pre-approved. In both scenarios, the lender may call into question a buyer’s ability to make their mortgage payments.

2. Quitting or Changing Jobs

   Knowing that a buyer has a stable source of income is important to lenders. Accordingly, it is best for a buyer to wait until after the home loan process is complete before taking steps to change their employment. Not only could changing jobs potentially put their mortgage pre-approval at risk, but it could also delay their settlement, since it takes time to prove a new salary.

3. Unpaid Bills

   Missing bill payments can be especially harmful to a buyer’s candidacy in the time between getting pre-approved and closing on the home. During pre-approval, lenders are using your ability to pay bills on time to help them paint a picture of your finances and it’s important to keep that picture consistent.

4. New Credit

   Opening new credit accounts will likely change a buyer’s credit score, which may cause adjustments in their interest rate. Lenders, upon seeing a new line of credit, even a store credit card, may elect to review the buyer’s risk of non-payment.

5. Paying Off Debt

   While most people would think paying off debt is a good thing, if a buyer pays off any significant loans or credit card debt after pre-approval, their lender will want to know where the money came from. The decrease in debt will also have an effect on the buyer’s debt-to-income ratio, which may alter their creditworthiness.

The period of time between pre-approval and closing on a home can be a tedious one for buyers. Before making any significant financial decisions, it’s helpful for buyers to speak with their lender to get an idea of how it may impact their financial standing. The complexities of this process also highlight the importance of working with an experienced agent.

What is a Buyer’s Agent?

A typical real estate transaction involves a buyer’s agent representing the buyer and a listing agent representing the seller. A buyer’s agent helps the buyer identify potential homes to pursue, advises them on negotiations, and helps navigate any hurdles during the buying process. Once they are under contract, the buyer’s agent will work to close the sale, monitoring all the key dates and deadlines along the way. Once the transaction is complete, buyer’s agents split the commission of the sale with the listing agent.

Advantages of Working with a Buyer’s Agent

Find the right home

A buyer’s agent not only possess expert knowledge of local market conditions, but they also have access to tools that will help their clients see the widest array of available homes, and eventually, find the right home. By exploring the Multiple Listing Service (MLS), they can access the vastest network of available listings, and receive up-to-date alerts on open houses. They are usually the first to know when a home hits the market and are sometimes aware of homes that are scheduled to list in the near term.  Buyer’s agents can advise their clients on how a home’s outstanding repairs and improvements could affect their decision to purchase, whether the home is in need of an inspection, and discuss the necessity of a home warranty.

Save time

Buying a home takes time, but a buyer’s agent will help streamline the buying process. This includes paying close attention to their client’s budget and preferences in order to focus their home search to only those listings that match their needs. Buyers can then decide which homes they would like to view in-person and their agent will contact the corresponding listing agent to set up showings. Buyer’s agents are founts of knowledge, able to provide or track down information a buyer may not be able to readily access on their own. Additionally, they are connected to a network of professionals and can produce references for mortgage brokers, real estate attorneys, inspectors, and more as needed.

Making an Offer

Once you’re ready to make an offer on a home, the importance of working with a buyer’s agent kicks into high gear. There are many different elements that impact an offer’s success, and this is where a good buyer’s agent’s specialty lies. Through their expertise, they can help their clients craft a more competitive offer and negotiate as needed. Sometimes the most competitive offers are not just about the price. Offers can win when a buyer’s agent has researched the seller’s needs and pulled together an offer that speaks to those needs. Any advantage buyers can gain to make their offer stand out will strengthen their case. This is especially important in competitive markets when multiple competing offers are on the table.

Throughout the process of making an offer on a home, a buyer’s agent is there to answer any questions that may arise and pore over the details so that nothing goes unnoticed. This is critical since sellers will likely toss aside any offers that come in with missing documents, errors in the contract, and other inconsistencies. When buying a home, buyers often fear that they will miss something during the buying process, that they are going to pay too much, that there will be something wrong with the house after they buy it, or that they’ll lose the home to another buyer. Buyer’s agents help to alleviate these stresses and make sure the buying process runs smoothly.

When determining which agent to work with, it’s important to ask questions to gain an understanding of their expertise, see their personality, and get a gauge of how well they understand what you’re looking for in a home. If you would like some help connecting with an agent, you can get started here: Connect with me

For some homeowners, purchasing a second home – or a vacation property – provides a place where they can have a change of scenery and an escape from day-to-day living. Since the start of the pandemic, a number of homeowners have chosen to move into their vacation homes to do exactly that on a longer-term basis. However, certain aspects of buying and moving into a vacation home differ from a traditional home purchase, so it’s important to work with a buyer’s agent who understands the nuances of both.

Before You Buy

One of the first things to consider before buying a vacation property is whether you are financially ready to take on everything that comes with managing and maintaining another home. If you’re still in deep with your primary residence’s mortgage and are not cash-ready, it may not be the best time to purchase a second home.

Like any home purchase, there are pros and cons to owning a vacation home. Vacation properties are likely to retain their value depending on where they’re located. They also allow you to experience the never-ending vacation lifestyle. However, owning a vacation property can come with its own set of unique expenses. Not only will be you responsible for all the maintenance work that you might normally leave to a property management company, but if the vacation home is located on the water or a steep hillside, you can also expect higher homeowner’s insurance costs.

Moving In

Any moving process presents unforeseen challenges and moving into a vacation home is no different. Whereas previously the home provided accommodation for relaxing, moving in will require it to meet the demands of everyday living. It may be high time to make repairs or upgrades to the home, which could drive up your move-in costs.

Before moving in, assess the condition of all furnishings to get an idea of what needs replacing. Making the home your main residence will put added strain on your appliances, so what may have previously worked well for short-term stays won’t cut it for full-time living. Check your refrigerator, dishwasher, and washer and dryer to see if they need updating before moving in.

If you’ll be working remotely in your vacation home, think about your desired work conditions before putting together your home office. Having a designated workspace will help balance your home and work life.