I'm preapproved for a Santa Rosa Mortgage. Why can't I get my purchase offer accepted?

Fantastic question!  Before we dive down to the nuts and bolts, consider the present market. There’s been more government regulation including a recent legal settlement heavily influencing banks to remove bank owned property from the market, clean up their books and expedite short sales (which now take 3 to 4 months).As a result, less homes are available on the market, rates have remained quite favorable, and the economy overall is feeling more optimistic about housing.

What we have is a reinvigorated housing market as evidenced by the strong upward trend in home prices driven by tenacious home buyers trying to get their offers accepted. If you’re preapproved home buyer or if you’re planning on becoming a potential home buyer for later on down the road, know that you’re going to be dealing with intense competition. Additionally, you will want to prepare yourself for the fact that you might have to make multiple offer in order to successfully get into contract. You just never know what the seller is going to say until you take action.The worst the seller can say is no right?

Why your purchase offer to buy the property despite the fact you’re preapproved, can’t seal the deal.

Two most common reasons, you need a seller credit for closing costs which weakens your offer or you’re not coming in with a strong enough offer.For example, if you’re seeing a house listed for $400,000 and you need credit for closing costs, call it 2% of the purchase price, that’s $8000 which is what the seller gives up for your benefit, thus making your offer weaker.

The more common reason however, is purchase price. Price rules in a real estate purchase offer negotiation. Everyone needs to feel like they’re walking away from the transaction with something in hand. The seller enactment net a certain amount of money from the transaction, and the buyer wants a fair price to keep his mortgage payment in line with his income and liabilities.

Tips to make your home buying efforts more successful.

  •  Make an offer at the purchase price or even higher than the purchase price, at times several thousand dollars higher than the purchase price. You will want to have a conversation with your real estate agent about this.* You still have to get an appraisal, the appraisal can be a bargaining chip for reducing the purchase price to match the appraised value.
  • Have your loan officer specifically put in writing on the preapproval letter, listing agent can directly contact the loan officer should they have any questions about your qualifying integrity. Typically, when you’re in the running for a home, the listing agent will call the loan officer and ask questions about our ability to qualify. While the loan officer must abide by privacy restrictions, they can however give a degree of confidence in their ability to get your loan done in 30 days to the listing agent. This is big especially when there’s multiple offers on the property.
  • Include proof of funds to close with your preapproval letter, and purchase offer contract. This draws a clear line in the sand between the men and the boys whose serious and who is not. This can be accomplished by simply providing a bank statement with your purchase offer package.
  • Subscribe to Zillow’s pre-foreclosure service which is free. Doing so allows you to identify foreclosures before they hit the market, as well as short sales. Once you identify these homes, have your real estate agent do the follow-up and/or watch the property for when it hits the market so you’re in first position with a strong purchase offer.
  • Include a motivational letter about why you want to purchase that particular property. This can go a long way in the eyes of the seller looking to take advantage of the market and know that their property is being sold to someone who’s going to live in it, cherish it and create many happy memories in it.
If you are looking into buying a home, start by getting preapproved online today for free.

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