How To Be The Buyer Every Seller Wants To Deal With

How To Be The Buyer Every Seller Wants To Deal With

For years, the real estate market in Denver has been a buyer's world, with ample inventory, fewer qualified buyers, and highly motivated (desperate) sellers. This spring, most signs are pointing to a seller's market.  If you're shopping for a home this spring and summer, chances are you'll face increased competition from other buyers.

So how do you ensure you not only land the home of your dreams, but get the best possible price from the seller and the best possible mortgage deal from your lender?  By becoming the buyer every homeowner wants to sell to a financially stable, credit-worthy, pre-approved purchaser.

"Just as lenders consider many factors beyond your credit score, when deciding whether to finance your home loan, sellers consider more than just the offering price when evaluating potential buyers," says Barrett Burns, president and CEO of credit score model developer VantageScore Solutions. "Buyers who can move quickly and decisively, who walk through the door with their financing lined up and their credit in good shape, are best positioned to stand above the competition this year."

Steps toward being a better buyer

You can be a better buyer - one that will appear attractive to both lenders and sellers - with some simple steps.

First, understand your credit score and the role it plays in the home buying process. While a good credit score can ease the borrowing process for home buyers, it's not the only factor lenders will use to gauge whether to approve you for a loan, Burns says.

"A credit score predicts the likelihood of whether a borrower might default in the first 24 months of a loan," he notes. "But lenders will also consider how much of a down payment you bring to the table as a percentage of the purchase price, your income and your debt-to-income ratio when considering a mortgage application."

Remember that lenders will pull your score from all three major credit bureaus, so it pays to check your credit report and score with all three. Reviewing your report and score allows you to catch and correct errors, and have a better idea of how potential lenders might view your credit worthiness, and rest assured that obtaining this information does not impact your credit score.

Understanding your credit score is a more complex process than you might expect. You can test your knowledge about credit scores at www.CreditScoreQuiz.org, a website created by VantageScore Solutions and its partner, Consumer Federation of America.

When you have a handle on your credit, consider other factors that can make you a better buyer, including how much you have to put down on a house.

The days of no-money down mortgages are virtually over, industry experts say. Today, even FHA borrowers will likely need to make a down payment. How much you need will depend on many factors, including the loan program you apply for and the price of the house you're buying. Generally, it's a good rule of thumb to save 20 percent of the purchase cost for a down payment.

Keep in mind, the more you put down, the more instant equity you'll have, the lower your monthly payment, and the better your chances of not needing private mortgage insurance (PMI), which can add hundreds of dollars to your monthly payment. If you're able to put down more than a lender requires, a mortgage company may be willing to give you a pass on other issues on your application, such as a less-than-stellar credit score.

"Lenders and sellers are all looking for buyers who are 'the complete package,'" Burns says. "While you should take care of your credit score, you shouldn't obsess over it. Instead, look at it as an important part of the overall package of assets that can make you the kind of buyer everyone wants to work with."

Karen Venier is a Broker Associate at Keller Williams. She is a part of Carr Peck Group which has been recognized locally and nationally as in expert in real estate.  Locally they are 6th in Denver Metro home sales out of 5,000 agents and have been recognized by the Wall Street Journal and Real Trends as one of the top selling agents in America.  For more information feel free to contact her  or call 303-908-9584.  

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Content provided by emerge marketing


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Dated: March 13th 2014
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