Expediting the Home Buying Process

As Congress considers extending the first time home buyer tax credit, and as the recession comes to an end, many people are interested in getting into a home. The process, though, can be rather long. The good news, though, is that there are some things you can do to help expedite the home buying process. Carolyn Warren, author of Homebuyers Beware: Who’s Ripping You Off Now? — What You Need to Know About the New Rules of Mortgage and Credit, has these three tips that can help you get things moving a little faster:

1. Beware of short sales that will never close– A short sale property can seem like a bargain, but it’s nothing more than a mirage if it can’t close. What surprises a lot of people is that some short sale properties will never sell, because there is a second—and sometimes a third—mortgage. The lender in second position is going to lose; therefore, they cannot and will not agree to your price. And since the values have declined, no one will offer enough to satisfy the second mortgage holder. This is a property that will end up going to auction to an investor who has cash, so don’t waste your time. When considering a short sale property, the first thing you need to find out is whether there is a second mortgage lien on the property. If so, pass it up and look for a “more eligible” home.

2. Set a deadline on your offer– Give the seller a deadline for responding to your purchase offer. Home buyers who fail to do this open themselves up for more competitors to outbid them. In addition, if you’re making an offer on a bank-owned property, if you don’t have a deadline, you could be left waiting in suspense for months. I know homebuyers whose offers have been simmering on the back burner for over 90 days. In the meantime, they’re wasting a lot of money on rent and a lot of energy worrying about what will happen.

3. Make sure your pre-approval is solid– A homebuyer who presents a pre-qualification letter rather than a solid pre-approval is setting himself up for a disappointment. In today’s uncertain market, sellers want to know your offer is backed by solid financing. It’s a good idea for your loan officer to be available to answer any questions the seller’s agent may have. For your own peace of mind, you want to know your financing is secure, too. After all, who needs an ugly surprise after your offer is finally accepted?

You can see how the above can help. And, if mortgage rates remain relatively low, and as long as Congress really does decide to extend the first time home buyer tax credit, you are likely to find a good deal, and get it done.