The 1st step in buying a house
You are about to enter into a competition for homes you are interested in. To win you must be prepared, and that means having the proof of funds that sellers require for accepting offers and removing their property from the market.
In this article we will discuss:
- How to prepare for buying a property
- What is required to secure a property
- What detail should be provided
You and I both know you that you are able to pay for the property
But the seller of the apartment or house you want, and their condo association...they don’t. If you are in the market for a home it is important that you know:
- No seller will accept an offer, sign a contract and take their property off of the market if they don’t have proof that you have the funds to complete the transaction.
- No association will approve of your purchase if you cannot show your ability to pay the monthly maintenance fees.
The competition you are entering in is real, we are not being metaphoric
If you think us northeasterners are not an agressive breed then you must have been living in Canada! (When I lived in NYC prospective renters arrived to see a place with a blank bank check for several thousand dollars and a pen ready to sign any lease!).
You and thousands of people who you can't see are all in their breakfast rooms searching for properties, looking at photos, and scheduling appointments. Who gets the property? The one who is most prepared when the seller is ready to make a deal, and that means having the proof of funds that sellers require for accepting offers so that they will agree with removing their property from the market for others to consider, (thats what occurs when an offer is accepted).
If you will be financing
...then we will work with you to expedite a pre-approval. Pre-approvals have an approximate 45 day validation period so if you dont secure a place in 2 months you will have to ask your mortgage representative to create a new pre-approval with a an updated date. It is best to have it emailed to your agent as soon as it has been completed by the person working with you on the financing.
If you would like us to recommend a mortgage professional we will be happy to make the introductions. Stay away from major banks. They are notorious for promising to finance... and then failing to do so within weeks of closing. Regardless, major banks only sell their own product, and beyond not knowing their competition, there is no financial consequence or disincentive to a banker for NOT approving a mortgage.
What you need for a seller to accept your offer
If you are paying cash, or you are financing and want your offer to be accepted before you have your pre-approval in hand...then we will work with you to obtain a letter on letterhead from a recognized representative that affirms sufficient cash available for this purchase.
This works because a licensed professional can be prosecuted for communicating false or misleading statements, so anything they write or say is them vouching for you wholeheartedly.
Such a letter must be from either:
The letter must:
- A licensed professional (your CPA, bank representative or financial adviser)
- The HR personnel or higher level manager in your company
- A manager or director at your bank
The letter must detail:
- Be written on letterhead
- Be signed and dated
- Include the representative’s license number, position, contact information
- Be verifiable with a call
Have a copy of the letter sent to us
- How many years you have been a client (or employee)
- That you are in good standing
- That you have the legal, liquid finances available to make a purchase of up to $X or in excess of $X
Make a PDF, scan, or take a photo of it then email it to anyone here in our office
Regardless of how you are financing, have your letter indicate the MAXIMUM you are approved for. The amount written has no bearing on negotiations, it's merely a checkmark for the seller.
For those of you outside of the US the letter does not have to be written in English, but if translated should be notarized. Of course alternatively, you can always send us a snapshot of your account information with account numbers crossed out. We just prefer that you keep that information private if possible.
- You are competing with thousands of buyers for property. It's just not easily observable
- Prepare yourself or you will lose a home you loved and wanted
- The letter mentioned before is all you need to get things started
- Provide the required detail to your mortgage broker so you can get a pre-approval