Can Buyers Do it Alone?

This week I came across a variety of issues that all started because my buyers have so much information at their finger tips via the Internet. What I have found is that the information they find is not always current or accurate when it comes to buying a home. Below are three examples, but I am sure similar situations arise across the entire spectrum in terms of the steps taken when buying a home.

1 . The first issue that came up this week was when a client called and said that her credit score was good and they were ready to look for a house.  My experience has taught me to never show a home until I have a prequalification letter from a known lender. In this case, the FICA score, which is the score used in obtaining a mortgage, was significantly lower than the credit score you get when using an online credit service. So, if you are tracking your credit in anticipation of buying a home, you should contact a mortgage lender and confirm your FICA score to make sure your ready to start looking for a home.

2. The second issue involved a buyer who tried to put together his own budget for his house. I appreciate every individual who puts thought into their monthly budget for a home. However, once they get an idea and are ready to start looking, again I highly recommend a mortgage lender consultation. In this case my buyer used a 5 percent interest rate. He estimated a figure for his taxes and insurance using numbers that were actually higher than they would be. This caused his monthly payment to be about $60 per month higher than it would have been. Also, by using 5 percent when my recommended mortgage lender was currently quoting 4.75 percent, he mistakenly added money to his monthly budget. In the end, he had overestimated his monthly payment by $120 per month. This $120 per month  would have allowed us to look at homes worth about $20,000 more in asking price. That $20,000 makes a huge difference, especially when you are looking at homes between $150K and $200K.

3. One more thing buyers need to be aware of as they look online at homes is that the information they see is at least one day behind what a realtor sees. This happens because all public websites are generally populated by the actual Multiple Listing Service that realtors use. These public websites are not live, but the data does synchronize during the night. This means the data is always one day behind. This could be critical if a super hot property hits the market. A realtor will know one day before a buyer, unless the buyer has been working with a realtor and has an automatic alert set up.

Don’t get me wrong, I love that buyers have access to a lot of data. Many times, a buyer has called me and asked to see a property. I love when a buyer takes the initiative and starts tracking their credit and puts together a budget. However, at some point, the buyer has to start to use a mortgage lender and a realtor as their consultants in the home buying process.

Good luck and good buying.