I recently met a new client who is interested in buying a home this year. She had a pre-approval from last year, but it expired, so she asked me if she could get pre-approved without having her credit pulled. Good question! A pre-approval is generally good for 90 days, but after that, a buyer needs to go back to their lender and refresh their pre-approval.
I called a few mortgage lenders I work with and asked some questions which confirmed what I suspected: You cannot be pre-approved without having your credit pulled. You can be pre-qualified, but not pre-approved. So what's the difference? A pre-qualification is when the lender meets with you, asks a lot of questions about your income, debts and assets and gives you a ball park idea of what you can afford. As one lender said, this is "useless for an offer situation" as sellers want to know that your financials have been examined closely and that you really can afford their home. Sellers certainly do not want to take their home off the market and then discover the potential buyer is not qualified.
So why would someone be concerned about having their credit pulled? Inquiries make up only 10% of your credit score, but if you are hovering near a 740 credit score you may have a valid reason to be concerned. Scores over 740 get the best pricing on interest rates. A lower rate means a lower monthly payment and significant money saved over the course of the loan. If you plan to have a FHA loan and put the minimum 3.5% down on your home, the credit score does not matter as much as if you are putting down say 20% or 30%. First time buyers or buyers with low to moderate income generally select a FHA loan if their credit scores do not qualify them for a conventional mortgage.
So how much damage does pulling your credit score really do? The answer: it depends. If you are considering buying a home and visit a few lenders within a few weeks, and they pull your credit, these multiple pulls are considered one inquiry. As a result of this inquiry, your credit score could be hit from 3 to 15 points, according to my lenders. However, if at the same time you are thinking of purchasing a car and the car dealer pulls your credit, then you choose to add a new credit card to your wallet and have your credit pulled by a number of lenders over a 2 month period, your credit score will take a serious hit.
It is in your best interest to keep your credit score in mind when you are getting ready to purchase a home. Once you apply for your mortgage, your lender will tell you not to incur any new debt. It is best to close on the home before you start looking to finance a new car or new furniture for your home.
Securing a pre-approval is an important step that cannot be avoided when purchasing a home, but how you go about doing that, and what the impact will be on your credit scores can vary greatly. Let me know if you need the name of a reputable lender to help you navigate the financial piece of the home buying puzzle and minimize the impact on your credit score.
Showing posts with label sellers. Show all posts
Showing posts with label sellers. Show all posts
Tuesday, January 1, 2013
Monday, March 12, 2012
Multiple offers
Everything old is new again. The multiple offer frenzy is back in the greater Seattle area! I spent time with my local banker today, and we were talking about market trends. He surprised me by saying, "well, it is a buyer's market." I wondered where he's been. Certainly not following me and my buyers as we rush to a listing, only to see multiple buyers lined up to take a look inside. What is happening? The market is changing. Just this last week, our Coldwell Banker Bain office in Bellevue had more than a dozen multiple offer situations. The escalator clause is back! One agent said she backed away from writing an offer for her interested buyers when she learned there were already 24 offers. Buyer's market? Not here! Homeowners, this is the time to list your homes. We have a buyer looking for your home. Give me a call and I'll help you determine what your home will sell for. Buyers....beware. If you find a home you like....be prepared to act quickly and don't be surprised if the home sells for more than asking price. Oh yes, everything old is new again...multiple offers and bidding wars, here we go!
Monday, January 17, 2011
Our Changing Market
I went to our weekly business meeting this Monday morning. Each week we talk about our market, tour homes and rub shoulders with other Realtors who primarily work Seattle's Eastside. We had very few new listings come on the market over the holidays and today I went with the expectation that we would have at least a half dozen new office listings to preview. I was surprised when I picked up the office tour sheet and saw just one home on Mercer Island listed. I was even more surprised when the listing agent told us that even though it was a new listing at $1.4 M, she already had four offers on it and was expecting a fifth, but more offers were welcome. This lead to a lively discussion of what is going on in our market.
Those of us who have been working with buyers in recent months have been frustrated. A great number of homes closed before year's end and we've been telling our clients, "just wait until after the holidays...." Well, the holidays have come and gone and we are not seeing a large number of homes coming on the market...at least not yet. In quizzing our top listing agents we learned that they have seen the number of homes coming on the market drop and the number of multiple bid situations increase. One agent spoke about having a competing bid on a property valued at over $1.2M. There were 33 offers on the property and the winning bid was well over the asking price. Was this an aberration? I had a similar situation in recent months. My clients found a wonderful foreclosed home in Kirkland with a phenomenal lake view. Price was mid $900s and we bid full price. The listing agent called me the next day to say it was a multiple bid situation and that we should submit our "highest and best" offer. My clients came up $6,000 over the list price but the winning bid came up well over $1M. Last week in the West Bellevue market in the $1.25M to $2.25M range, 9 homes went pending. In 2010, 45 more homes sold on Mercer Island than in 2009. To cite yet another example, the volume of waterfront home sales on Mercer Island tripled in 2010 over the number sold the previous year, indicating that velocity even in this price category is increasing tremendously.
What does this mean for buyers and sellers? If you are looking to buy a home, you need to work with a Realtor who has their pulse on the market and sends you listings as soon as they are available. Check your email often and when your agent flags a home and says, "we need to see this one asap," then you need to act quickly. Just last week, I sent what I identified as a "hot" house to six buyers, letting them know we should see the home within a day if possible. One of the six heeded my advice and saw the home. While they decided not to bid on it, it was good they got in quickly, as the next day the sellers had an accepted offer in a multiple bid situation. Later in the week, another buyer finally returned my call and said they hoped to see that home on the weekend....but alas, it was too late.
For sellers, you may be rubbing your hands and thinking now is the time to list your home for sale. You are right! Finally, we have buyers who are serious about buying. The rising interest rates are helping push some to act, but what I personally have seen is an influx of new hires in the greater metro Seattle area. Open Houses offer an interesting snapshot of our market. What we have seen is large numbers of buyers moving into our area, currently renting, but looking to buy in 2011. Microsoft is hiring from all over the world, but so is Expedia, Starbucks and Boeing, to name a few. But while the demand has increased, we are noting that buyers are still very discriminating. People are turning up their noses at dirty, dated or overpriced homes. Buyers are looking on line, doing their homework, and ready to act, but the property must be clean, staged and properly priced. If they are: the home will sell.
Yes, our market is changing. While we expect more foreclosures and short sales to come on the market in 2011, our projections are that the demand will take care of the supply and we will soon be back in a balanced market situation with property values once again increasing: and isn't that something all homeowners want?
If you are thinking about buying or selling a home on Seattle's Eastside, please give me a call. It would be my pleasure to help you understand our ever changing market and represent your best interests in either purchasing or selling a home.
Those of us who have been working with buyers in recent months have been frustrated. A great number of homes closed before year's end and we've been telling our clients, "just wait until after the holidays...." Well, the holidays have come and gone and we are not seeing a large number of homes coming on the market...at least not yet. In quizzing our top listing agents we learned that they have seen the number of homes coming on the market drop and the number of multiple bid situations increase. One agent spoke about having a competing bid on a property valued at over $1.2M. There were 33 offers on the property and the winning bid was well over the asking price. Was this an aberration? I had a similar situation in recent months. My clients found a wonderful foreclosed home in Kirkland with a phenomenal lake view. Price was mid $900s and we bid full price. The listing agent called me the next day to say it was a multiple bid situation and that we should submit our "highest and best" offer. My clients came up $6,000 over the list price but the winning bid came up well over $1M. Last week in the West Bellevue market in the $1.25M to $2.25M range, 9 homes went pending. In 2010, 45 more homes sold on Mercer Island than in 2009. To cite yet another example, the volume of waterfront home sales on Mercer Island tripled in 2010 over the number sold the previous year, indicating that velocity even in this price category is increasing tremendously.
What does this mean for buyers and sellers? If you are looking to buy a home, you need to work with a Realtor who has their pulse on the market and sends you listings as soon as they are available. Check your email often and when your agent flags a home and says, "we need to see this one asap," then you need to act quickly. Just last week, I sent what I identified as a "hot" house to six buyers, letting them know we should see the home within a day if possible. One of the six heeded my advice and saw the home. While they decided not to bid on it, it was good they got in quickly, as the next day the sellers had an accepted offer in a multiple bid situation. Later in the week, another buyer finally returned my call and said they hoped to see that home on the weekend....but alas, it was too late.
For sellers, you may be rubbing your hands and thinking now is the time to list your home for sale. You are right! Finally, we have buyers who are serious about buying. The rising interest rates are helping push some to act, but what I personally have seen is an influx of new hires in the greater metro Seattle area. Open Houses offer an interesting snapshot of our market. What we have seen is large numbers of buyers moving into our area, currently renting, but looking to buy in 2011. Microsoft is hiring from all over the world, but so is Expedia, Starbucks and Boeing, to name a few. But while the demand has increased, we are noting that buyers are still very discriminating. People are turning up their noses at dirty, dated or overpriced homes. Buyers are looking on line, doing their homework, and ready to act, but the property must be clean, staged and properly priced. If they are: the home will sell.
Yes, our market is changing. While we expect more foreclosures and short sales to come on the market in 2011, our projections are that the demand will take care of the supply and we will soon be back in a balanced market situation with property values once again increasing: and isn't that something all homeowners want?
If you are thinking about buying or selling a home on Seattle's Eastside, please give me a call. It would be my pleasure to help you understand our ever changing market and represent your best interests in either purchasing or selling a home.
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