One of the scariest parts of selling your home FSBO is not having a hand to hold during the monotonous, yet critical, areas of finances and legal issues. Though common advice states that you should consider every offer you receive, which is true, you should not eagerly accept a bid before you know if that buyer can actually obtain a mortgage loan large enough to pay for the house. If the buyer is not yet preapproved or prequalified, the sale of your home could go on for months without any progress.
The first step is to find out if the buyer is preapproved, meaning he or she has been approved for a loan by a lender, or prequalified, meaning he or she has figured out the amount that is probable for him or her to afford and be approved for. A responsible buyer will obtain preapproval before offering a bid. However, since this is not always the case, there are steps you can take to approximately decipher whether or not your interested buyer has fair credit or not.
Online calculators are available, which allow you to sit down with your potential buyer, plug in critical numbers like their monthly income and expenses, and estimate the maximum loan amount that buyer is likely to obtain. There are also do-it-yourself worksheets that you could print out, which ask for similar information but require more pen-and-paper work on your part.
If you’d rather have a third party help with the preapproval, local mortgage brokers and Internet mortgage services are available to do the dirty work. Once you know what your potential homebuyer is likely to obtain in a mortgage loan, the more at ease you can be while you wait for the process to unfold.
To steer your potential homebuyer in the right direction for obtaining that mortgage loan, send them to GuaranteedRate.com, which is the authorized mortgage company for Buy Owner.