Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
When you made your offer, did you give the seller any reason to believe that there was a high probability you could afford to buy the house?
The pre- in pre-approval is key here. Pre- indicates it is done before, in this case before the contract.
I would think that "all necessary paperwork" could easily be gathered before house-hunting. There isn't that much paperwork to get together. Fill out a form, maybe turn in a W-2 or some pay stubs.
So another vote for trust the "buyer" and his agent, and forget about the short sale.
We submitted a pre qualification with our offer as well as proof of our down payment funds.
If you think getting mortgage paper work together these days just involves filling out a form, a couple of W2s and a pay stub, then you haven't got a mortgage in a while! Things have changed from the days of the wink and a handshake, although I admit our case may have been more complex as we already own a house so had to verify a ton of information we gave for our pre qual for that on top of everything else.
Again, by all means request your pre approval of the buyer - make acceptance of their offer conditional upon it if you must, but in all the places we have purchased over the past 10 years we have never once gathered all necessary paperwork prior to having a contract on a house, whatever you might like to think.
Also getting a pre qualification requires having your credit run. So your buyers HAVE already had their credit run.
I don't know, to me it seems like you are over complicating things to an extent that could cost you an offer ABOVE what you are about to reduce your price to. I'm not sure that this makes any sense.
In re-reading your OP the concern that jumps out to me is the lack of downpayment. I am not sure of the price range of your home, but if I were you I would request a downpayment, even if it's only a couple of percent of the purchase price. Buyers tend to take things more seriously when they have some skin in the game. I would also give a short window for home inspections as time waster buyers tend not to want to incur expense, and some buyers use the inspection to renegotiate the price excessively. Again if it were me I would ask for some sort of downpayment however small and give a 7-10 day window for inspection knowing that the deal could easily fall apart until that aspect is completed.
Re the short sale - this is just an assumption on your part right?
Just ask your agent to ask their agent if they have been through any short sales, foreclosures or bankruptcies which could affect their ability to get a loan.
You don't know about a short sale. That would have come up on his initial credit pull. The $360k could have been his original purchase price, not what was owed. You don't know what $360k is. In Texas, we're a non-disclosure state. You don't get sales prices. You don't get to see what people paid for a house. He might have put a sizeable down payment. He might have written a check to get out of his situation. If there was a short sale, more than likely, there would have been 30, 60, 90 day lates on his credit and he wouldn't even have gotten a pre-qual, muchless a pre-approval.
As I already said, call the mortgage person yourself and ask questions instead of just assuming you know the situation.
In NC, at least in his county, it's public information, available to anyone who looks it up. I know what his mortgage was (originally and each time he refinanced.) I know how much his second mortgage was. I know how much he sold the house for - and I'm assuming he paid commissions.
It's true they could have made huge lifestyle changes (Dave Ramsey, maybe?) and paid $80000 extra in two years. But I'm not going to assume it without some reassurance.
I will call the broker on Monday with general questions.
In NC, at least in his county, it's public information, available to anyone who looks it up. I know what his mortgage was (originally and each time he refinanced.) I know how much his second mortgage was. I know how much he sold the house for - and I'm assuming he paid commissions.
It's true they could have made huge lifestyle changes (Dave Ramsey, maybe?) and paid $80000 extra in two years. But I'm not going to assume it without some reassurance.
I will call the broker on Monday with general questions.
call the broker today. Real estate is a 24/7 world.
So you are requesting a pre approval which involves the buyer getting all their mortgage paper work into the lender and a credit check, and you haven't even accepted or countered their offer?
If I were the buyer I would tell you to take a hike.
We just bought a house and shopping the rates and available products was important to us, plus it takes a while to get all necessary paperwork together - no way we would have done that for a house we didn't have a contract on
I think it's reaonable to request a pre approval within a certain time frame after contract, but not to insist on it before you have so much as accepted their offer.
If you carry on like this I suspect you will be the owners of your house for a long time to come.
TOTALLY false if you are buying selling in the Phoenix AZ area. Good realtors will automatically submit a PA with the offer. We received several offers just last month, all with PA's. And our realtor would have advised us against looking at them with out it.
In this case, there are lots of red flags. Including the seller's realtor, who doesn't seem to be following through very well. . .
In the Phoenix area, the contract has a field that indicates if the buyer is submitting or not submitting a pre-qualification form with the offer.
Most offers are submitted with a pre-qual, and the agents will advise the seller to not accept an offer without the pre-qual.
If the offer is accepted then the contract requires the buyers loan company to submit a Loan Status Update within 5 days, to show exactly what progress the loan company has done on the mortgage. The seller can request more LSU's as time goes by; again so the seller knows what's happening with the loan.
A pre-approval is almost as good as cash because the file is ready for underwriting to request an appraisal.
Many mortgage companies will not do a pre-approval because of the amount of work required before the buyer has a valid contract. Therefore in this area there are very few pre-approvals issued.
The mortgage company I refer does do pre-approvals, and one of my buyer clients is working on getting one prior to coming to the area to begin the search.
If the offer is accepted then the contract requires the buyers loan company to submit a Loan Status Update within 5 days, to show exactly what progress the loan company has done on the mortgage. The seller can request more LSU's as time goes by; again so the seller knows what's happening with the loan.
Our agent finally asked buyer's agent if his sale a couple months ago was a short sale, and she admitted it was. Buyer's agent has also called VA loan center (as I have) and found that buyer can't get a VA loan for two years (same thing they told me - how about that). But the loan guy says he can do it. They can mess with someone else's sale, I guess. Doesn't sound good to me.
This would a good reason for them to actually get pre-approved and is something their agent should have been working on with them prior to even showing any houses. A good agent would deal with this problem up-front before wasting anyone's time.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
