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Unformatted text preview: s. Once again, you have informed the buyer as to the maximum affordable house price. If the buyer wishes to purchase a higher priced house, the buyer must meet the requirements mentioned. In addition to knowing the maximum house price before seeing any property, the prospective homebuyer will then be familiar with the methods the lenders will use to establish whether the buyer can qualify for the mortgage. If you take the time before you begin showing your prospective homebuyer any properties to determine the maximum mortgage the buyer can qualify for, you can avoid many headaches for both you and your buyer. Many times the buyer will tell you the desired price range without really knowing how much home he or she can actually afford. If this is the case and the real estate salesperson takes the prospective buyer at the buyer's word and starts to show homes without first qualifying the buyer, there may be surprises for both you and your buyer. For example, you have as buyers a young couple who say they want an $200,000 house. You take them at face value and begin to show them homes in this price range. After looking at several, they find one that fits their needs and they make an offer. Let us assume the offer is accepted. Later, back at the office, you suggest several
13-4 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 13: QUALIFYING THE BORROWER
lenders to whom they may make application for the mortgage of $160,000. At application, however, they state that they only make $25,000 a year and have several long–term debts. This causes them not to qualify for the mortgage at time of application. This not only will cause you to lose a sale, but will make the mortgage lender less anxious to work with you again. The buyers will lose faith in your ability and turn to another agent. This is not to say that with your qualification of the buyer you will eliminate the possibility of rejection of your buyer by a lender, but it will greatly re...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10