Recently a bitter buyer walked away from a purchase that had been in escrow for several months.  The lender had finally rejected the loan and the deal flubbed.  Enraged and embarrassed by the process, the buyer severed all communications except for blaming everyone else for his failure to secure financing.  At the beginning of the process, he had been given a pre-approval letter from an out-of-state lender who assured him that he could get a loan.  After the rejection, he spewed vile comments about the lender that “had jacked him around,” revealing to me that he had suffered an acute misunderstanding of the process and had not been exactly honest with the lender.  At the initial contact the lender could not substantiate anything the buyer had said over the phone.  Their subsequent pre-approval letter basically said, “If everything you have told me is true, then you qualify for a loan”.  The problem in this case was that the over-exuberant buyer had overstated his unsubstantiated credit worthiness and his ability to produce sufficient down payment.  When the lender had to ask repeatedly for additional documentation, the buyer became angry with the process and failed to comply.

     This story illustrates what many naïve buyers go through when beginning the purchase process and why they should carefully follow the instructions of a trusted Realtor®.  Begin the process with a thorough consultation from a trusted source who can guide you safely through the process! In the above example, the buyer had struck a deal with a seller all on his own, …and then tried to qualify.

      You should know that the process is not easy, especially if you have unresolved credit or debt issues. After the initial consultation your Realtor® can refer you to a trusted loan officer who will begin to verify all of the requested information.  Be prepared to bring a basket load of documents!  Once they have the chance to verify your income, savings, debt and credit score, they will be able to produce an approval letter which should be stronger assurance than a rushed pre-qualification letter. 

     Once that process is completed, the loan officer will relay information to the buyer’s agent that will get you started in the looking process.  They will share how much money you can spend and what type of loan you qualify for so that you don’t chase an unobtainable dream or waste time looking at properties that don’t fit the loan type.  Getting started the right way will save you a headache!