Although I certainly would agree that finding a great real estate agent would be the most important part of successfully selling your home, the best FIRST step would be contacting your mortgage lender! Here are a few reasons why:
#1. If you are planning to buy another home after you sell, make sure you CAN before selling your current home!
#2. Your mortgage lender can help you figure out how much cash you need make your new purchase work… which could affect pricing on the home you are selling!
#3. If you don’t already have a great real estate agent you trust, your mortgage loan officer might be able to save you time and recommend a good one!
Most sellers I talk to are already too deep in the process when they contact me for help. If there is a problem, they have already spent tons of time and money trying to sale their home that would all be wasted! One thing I have learned in general is that most major goals can be accomplished much easier if you start at the end result you desire and work backward from there. If you plan to sale your current home and buy a nicer one, wouldn’t the closing on your new home be the best place to start your planning?? If you figure out how to get there the rest of the process becomes much more clear and simple.
Why do most sellers put the cart before the horse?
I think it’s because they feel very confident that they will not have any trouble getting the financing they need. They already own a home and are making the payments on time, why wouldn’t a lender give them a new loan???
That kind of thinking used to make sense, but in the new lending era we all live in today, thinking like that might cost you thousands of dollars or prevent you from buying altogether. Let’s take a look a few examples…
#1. I have a had several VERY wealthy and accomplished clients recently that had small medical collections on their credit report. They had no idea these small collections were there because they were errors. Their credit was still very good but just being a few points below certain targets can mean a higher interest rate on a conventional loan. On a JUMBO loan (anything above $417,000 in this area) a few points can mean the loan being denied. If a seller in this situation contacts their lender first, the loan officer can let them know where they are and make suggestions for improving their score. If they do this in the beginning of the listing process they will have plenty of time. If they contact their lender once they have already found a buyer for their home, they could be stuck and be unable to get the loan they want or end up paying substantially more in interest and fees!
#2. If you haven’t had to qualify for a mortgage in several years, your financial situation could be indentical but lenders might not see it the same way! Lending rules have changed a lot since 2008, and new rules could prohibit you from from qualifying for the type or amount of mortgage loan you need. It only takes about 30-45 minutes to talk to a loan officer and get everything checked out… and I don’t bite! 🙂
#3. Many homeowners have changes in their income but don’t realize it might cause a problem with their loan. One major cause is divorce situations. The buyer is getting alimony but doesn’t realize they have to receive it for set period of time before it can be used as income when qualifying for a mortgage. Many buyers switch jobs but don’t know that even though they are in the same field, they might not be able to use 100% of their aniticpated income because of the change. There are endless little details that can cause an issue… why have to worry about all of that? One phone call can eliminate all of the stress!
I hope this article is helpful! If you are planning on selling your home, do yourself a favor and start with a loan officer you trust. Of course, I would love to help so please feel free to call me directly at 980-721-7478.