1. Always get your financial records ready, have pre-approval letter in hand from a major bank ( These days, if you are bidding for a REO – bank-owned or foreclosed property), seller will not take a mortgage broker’s approval letter.
2. It is a good idea to figure out your highest offer amount, in the situation of counter offer. And stick to the amount and percentage you would like to spend on the property.
3. Make sure you will have enough down payment to qualify for the loan. In the event the final purchase price is higher than the original asking price, your closing cost and earnest money deposit all go up proportionally.
4. Avoid bidding too emotionally. Some extra-nominal adds up still happening in the market, but you have to take appraisal into consideration. When you win the bid, you will start apply a mortgage loan for the property. If the purchase price went up substantially due to multiple offers, but it is not a realistic number compared with the CMA report (CMA – comparable market analysis), you may not get an approved loan, your purchase process may fail.
5. Don’t waste time in short sale (the subject property is selling at the a lower price while its loan is bigger than its asking price.) Average processing time in short sale is six months. If you REALLY want to buy, no need to go through something cannot guaranteed.
Any questions, please send me an email. More tips to come.