While 30% of buyers today are paying cash, 70% are using a mortgage to purchase their new home. Even with a good pre approval, buyers still worry about getting to the closing table.
Here are the top five worries buyers fret over:
Good Faith Estimate – This is the form given to a buyer when first meeting with a lender. It outlines the costs of obtaining the loan. Buyers worry if the numbers will hold true and if they do indeed have enough to bring to closing.
Appraisals- two worries here. Will the value come in at the purchase price or above, and will the report come in on time. If the value is not as high as the purchase price, that could blow the deal. IF the seller is not willing to come down, the appraiser is unwilling to amend the report when give better comparable properties, that leaves the buyers with only 2 options. Pay the difference or walk away. If the report is not delivered on time, it could hold up the formal loan commitment. That may open a window for the seller to void the offer.
Late Figures – It is not uncommon to get your final numbers within just 24 hours of the closing. That really stresses buyers, as they are still wondering “do I have enough?” It also can be an issue not allowing a buyer time to get to the bank or do online transactions to get the money needed at the closing table.
Accurate Figures – Numbers come from several sources. Buyers want to be sure they are correct. The sellers closing agent will prepare a closing statement as if the sale is a cash transaction. The lender then adds their costs of obtaining the loan (which should be pretty close to those on the GFE Good Faith Estimate) and then buyers are credited for costs paid up front. Those costs could include the earnest money deposit, appraisal fee or application fee.
Money At The Table and Timely Closing – Many lenders still play the game of faxing at closing. Buyers and sellers sign all documents and then the giant pile is faxed to the main broker who is “funding” the loan. Once it is reviewed, they release the wire. Many times we sit at closing for an extra hour or two waiting for “the wire.”
There are many ways to prevent or lessen these stresses during your home buying process. When I am first contacted by a potential buyer, I meet with them in person and do what is called a Buyer Counseling Session. In this session we not only discuss their wants, needs and dreams for their new home, but also the process we will be going through, what to expect and how to avoid some of the Five Loan Worries for Buyers. If you are thinking of purchasing a property, call me to meet and map out a smooth road to closing!
Submitted by: Pat Tasker, Shorewest Agent