Buyer Qualification is of great importance to buyers, sellers and real estate agents alike. The buyer qualification process will remove the uncertainty for all the parties involved in a house sale.
The buyer needs to know how much he can spend and knock out a clear idea of what he is looking for. The seller needs to know that the sale won't fall through and effectively take his house out of the market for a period of time. The real estate agent needs to be sure that the buyer and seller is a probable fit where the property is concerned, because he only gets paid when the property finally gets transferred.
Buyer Qualification Factors
There are many buyer qualification factors involved in the financial preparation for a house purchase, but buyer qualfication is not only about the finances:
Buyer Finances
The buyer needs to determine how much he can borrow, how much he has saved for a deposit, transfer fees, house insurance, stamp duty etc. The RealFact Calculators will help you determine the costs involved in buying and how much you can afford to spend.
The seller need this information as well to make an informed decision to accept or reject an offer to purchase. But sellers are seldom comfotable, or in a position to ask such personal questions to a total stranger.
The buyer would improve his negotiation position by contacting his bank and obtaining a bond "pre-approval". This is simply an indication of how much the bank would be willing to lend him, based on his credit rating and income. A bond "pre-approval" is not a bond guarantee. The bank can still refuse a bond, even if it falls within the limits of the "pre-approval", based on new information about the property or the buyer's credit rating.
Even though it is not guaranteed, a buyer with bond "pre-approval" is a much safer bet to the seller than a buyer who has not been qualified. The buyer can use this lowered risk as leverage for a price consession during the sales negotiations.
Buyer Preferences
Buyer preferences also play an impotant part in the buyer qualification process. The buyer needs to identify his "deal-breakers" and preferences for a new home. Buyers can use the House Hunting Tips artcle as a guide.
Buyers who know what they need from a property and know which aspects are desireable but not essencial, can save a lot of time by only viewing properties that meet their needs. A buyer who knows what he needs can also make a quick decision to buy or not. Remember there are other buyers looking for the same property!
Buyer Qualified
A qualified buyer can look forward to an easier buying experience. The seller and real estate agent will be more eager to work with a buyer who knows what he needs, what he wants and what he can afford, and thereby makes the selling process more secure for everyone involved.
