FSBO's- Is Your Buyer Qualified?

Unless the buyer who makes an offer on your home has the resources to qualify for a mortgage, you may not really have a sale. If possible, try to determine a buyer's financial status before signing the contract.

1. Has the buyer been prequalified or preapproved (better) for a mortgage? Such buyers will be in a much better position to obtain a mortgage promptly.

2. Does the buyer have enough money to make a downpayment and cover closing costs? Ideally, a buyer should have 20% of the price of the property as down payment and between 2% and 7% to cover closing costs.

3. Is the buyer's income sufficient to afford your home? Ideally, buyers should spend no more than 28% of total income to cover PITI (principal, interest, taxes and insurance).

4. Does your buyer have good credit? Ask if he or she has reviewed and corrected a credit report.

5. Does the buyer have too much debt? If a buyer owes a great deal on car payments, credit cards, etc., he or she may not qualify for a mortgage.

There are several complexities when selling real estate. Knowing current laws, contracts and the intricacies of closing the transaction. Contact me if I can be of any assistance.