Find a Home. Buy a Home.
The most challenging part of purchasing a home today isn’t coming up with the down payment or qualifying for a loan. It’s getting your offer accepted when there are so many multiple buyers for each property.
While it is as true today as it was yesteryear, Sellers typically accept the highest offer. And with so many cash buyers, this puts those looking for a deal with or without paying cash way behind the reality of getting their offer accepted. It’s a tough market to say the least. Are you struggling with the home buying process? click here to sign up for more help.
Best Plans to Get Your Offer Accepted
Cash. Not for most but from a Sellers perspective, usually the best. This assumes the cash offer amount is very close to the highest offer with a financing contingency.
Financing with No Appraisal Contingency. Simply put, you are offering to purchase a home regardless of what the property appraises for. If your offer includes a 20% down payment and the property appraises for less than the agreed upon price, not to worry, you still have a couple of options.
Let’s use an example where the agreed purchase price is $950,000. Your offer is includes financing with 20% down and a loan amount of 80% of the purchase price. Your loan amount is set at $760,000. You are prepared to come in with $190,000 as your down payment. Even though your offer is not contingent upon an appraisal, your lender will likely require one. Unfortunately, the appraisal comes in at $900,000. Here are your options:
- Come in with more down to keep the loan amount at 80% of the Appraised Value so you will retain the same rate and terms locked in at (you are priced at 80% financing of the lower of the Purchase Price or Appraised Value). The loan amount would be reduced to 80% of the appraised value or,$720,000. You would then have to come in with an additional $40,000.00.
- Continue with your original plan of coming in with $190,000. You are now borrowing 84.4% of the ‘appraised’ value. Your payment will be slightly higher due to an added monthly mortgage insurance premium of about $63
charged because you are now borrowing over 80% of the appraised value. Probably not a deal killer and a pretty good option.
Before moving forward with looking for a home, here are a few fundamental things you should do in the order of importance
- Unless you are paying cash, get pre-approved for a home loan early– This process should only take a day or two depending on the Broker or lender you decide to go with. You will not only know what loan amount you are approved for but what your monthly payment will be. Get approved for a loan based on the worst-case scenario where you are borrowing a larger amount or showing less down payment due to an appraisal coming in lower than the purchase price.
- Connect with a Realtor– This person is a professional who knows the market and will work diligently to find you a home and formulate the best strategy to get your offer accepted. It is vital that both your Realtor and your Mortgage Broker work together as a team to make this happen.
Now that you have a bit more knowledge about how to the home buying process works, let’s get started!
Find a Loan Officer
Start with a qualified broker or licensed loan officer that has your back and is available to assist you from start to finish.
In general, Brokers are generally more flexible with their time and their loan products.
You will want to connect your Loan Broker to the Realtor you select so they can work together with you.
What’s the Best Way to Find a Real Estate Agent?
Make sure that your Realtor understands the current status of the market. Realtors here at GoToHome have the experience and knowledge to help make your dream of homeownership a reality.
Start your search and connect right away with a top-notch realtor in Orange County, CA right here at GoToHome