As a seller of a for sale by owner home, the possibility of wasting time with a potential buyer who will not be pre-approved for a mortgage loan is high. Such situation is certainly frustrating especially if you have already spent months negotiating the sales price. What is worse is that you might have even turned down other offers.
With the tighter lending guidelines being implemented today, almost 50 percent of home buyers were lucky enough to obtain mortgage loans.
This is based on a study conducted by the Mortgage Bankers Association wherein they have observed lenders reject applications due to inability of the applicant to shell out a bigger down payment amount or low credit score.
In order to avoid such time-wasting situation, sellers are advised to focus their attention on buyers who already have obtained a pre-approval letter. Keep in mind that this is different from being pre-qualified, which still lacks the credit score, income and other financial background check.
In case the potential buyer is not yet pre-approved, you should first inquire about the steps they still need to take in order to obtain a mortgage loan. Make sure that you do this before negotiating the sales price. This way, you will not be only wasting time but you will also be giving great advice to the buyer.
By doing so, you also encourage them to transact with for sale by owner sellers instead of hiring brokers or agents.
One of the advices you can give the buyer is to look for a mortgage lender either in person or online. There are so many available information and resources they could utilize from the internet in order to ensure that they get pre-approved.
By providing assistance to the buyer, sellers of for sale by owner homes will be able to save time. In addition, they will benefit much from the experience, which they can use to help out a fellow FSBO seller.