FSBO BLOG

This third video takes you behind the scene of what every FSBO seller should be doing while they get prepared to sell their home For Sale By Owner.  I believe it is important for sellers to be as prepared as possible so that they in no way delay the buying/selling process, or lose a potential sale because they did not know what the next step is, or waste time with a non-qualified buyer.  Enjoy the video, and scroll down to see a copy of all of the questions/answers Kal and I spoke about that were not captured on Film.

A big thanks to my good friend Kal Wayman, National Sales Director of Amerisave Mortgage for taking the time to sit with me.  If you need a Mortgage or Refinance “You Owe it to Yourself” to visit Kal at www.gotkal.com (Nationwide).

Q & A:  Mike Malkasian and Kal Wayman

Mike:  Before you read the info below, I wanted to give my opinion on why it is important for you, as a seller, to speak with a Mortgage company first.  If the answer to your first question to the buyer, have you already been pre-qualified, is NO, you want to be able to refer them immediately to someone you know and trust before getting into any further negotiations.  Give them two people to call, and tell them to get back to you after they have their pre-qualification letter.  This will save you a lot of hassle. 

Ok, full interview below:

As a seller, why is it important for me to talk to a Mortgage Broker even though I am not the one that will be seeking financing? 

As a seller you want to make sure that you are spending your time efficiently.  The more people you can get in and out of that home the more likely you are to sell it.  The last thing you want to do is to go into intense negotiations with a prospect that may not be qualified.  Even worse than wasting your time negotiating with an unqualified prospect, what if you actually signed a contract with that person!  You then would be stuck in a position where you can’t accept offers from other possibly more qualified buyers.  You may lose an offer because of that and all because of what….  If the initial person you signed a purchase agreement with never closed you have wasted your time and resources and may have even lost a sale.  You should always have a reliable mortgage broker ready to qualify any potential buyers.  You see this every day now in the current market.  If you buy a bank held property it is very common nowadays for the bank to require you to be prequalified by them (not an outside source) before they will sign an agreement.  Once you build that relationship with a mortgage broker, he or she should be happy to sift through the potential buyers and tell you who’s qualified and who’s not qualified so you can properly focus your selling efforts. 

Should I accept an offer from a buyer that has not been pre-qualified/approved?

No, absolutely not!  You should always make sure that a buyer is pre approved before accepting an offer.  The last thing you want to do is waste your time and resources and possibly lose a bid from a more qualified buyer.

Once I have an accepted offer from a pre-qualified buyer, do I need to hire my own attorney, or will the mortgage company’s attorney handle everything?

Typically the seller chooses the closing attorney.  Sometimes the buyer negotiates to use their closing attorney but not often.  If neither the seller nor buyer has a preference, the Mortgage company can help both parties select one.

As a buyer when and why should I contact a Mortgage Professional when searching for my next home?

You should contact a mortgage broker before you even start shopping!  The reason for that is simple Mike….  Before you know what type of house to look for, you need to know what kind of house you can afford!  If you were on a budget and were planning a date, would you not look at the menu first before scheduling a reservation?!?  With all the different loan programs out there nowadays, a lot of people don’t even realize how much home they really can afford!  Of course, as a buyer you always want to make sure you don’t overextend yourself and that you will accomplish your correct goals at the end of the mortgage as well.

What information would you require to get me pre-qualified/approved?

In order to get pre approved you need to provide proof of employment, income, and assets.  Employment is confirmed by copies of recent pay stubs.  Income is confirmed by copies of last 2 years w-2’s or tax returns.  Assets are confirmed by copies of last 2 months bank statements (checking, savings, retirement)

What is the benefit of getting pre-approved/approved before making an offer? 

Well, as noted before…. First off you know that you can afford the home and that you are not overextending yourself.  2nd and also very important…..It helps strengthen you offer when presenting your bid to a seller.  A lot of times, sellers won’t even accept an offer until they see a pre approval letter.  If they see one at the very beginning, they will probably take you more seriously and probably be more willing to negotiate on the front end.

Does it cost any money to get pre-qualified/approved?

Typically no.  It should not.

Once my offer is accepted, what happens next?

The buyer should then start the loan process.  Within 30 days of the estimated closing date the buyer should lock a rate, and fill out the loan paperwork.  The mortgage company will then order title and appraisal.  The mortgage company will also submit the file to be processed and underwritten before the buyers funds are released to the closing attorney to distribute accordingly to all parties.

What concerns should I have if no Real Estate agents are involved?

You should be concerned with what you are going to do with the extra 3-6% you saved!

So, from your point of view, what is the major difference when you are doing a FSBO deal compared to a traditional one with agents involved, and what can the FSBO parties do to make the process go smoother? 

Well, the main difference is you save a lot of money!  Yes, you give up the hand holding that an agent provides, but let’s be real here.  Times are changing.  People use to use stockbrokers to trade their stocks and pay excessive commissions.  Now everyone does it themselves online for pennies a share or flat rates.  Technology has allowed us to be more efficient with mortgages and securities.  Why not use technology in the home buying and selling process.  By eliminating agents you are able to save money because 6% of commissions are eliminated from the transaction.  That money is then able to be put in the pockets of the most important people involved with the transaction…… the buyer and the seller!