Brad: Hello everyone it is Mike Anderson again with the Mike’s Mortgage Minute and we are talking about specifically kind of in the Dallas market in Texas but the lack of homes in inventory right now in this marketing is really, really tight. So tell us how as a consumer you can, is there some things you can do on the front end, like go ahead and get pre-qualified before you go look at homes or….
Mike: There are several different things you can do on the front end. First of all, I would get pre-qualified, and whether you use us or any other mortgage company, I would get pre-qualified, and it better have some heat in the pre-qualification because all these people give them out like candy, you know and they are not with the paper they are written on.
Brad: And we are back to that….
Mike: We need to run your credit report, go over your income, go over your debt: income ratio, and tell you what you qualify for. Second of all if I were in a competing market, let me just tell you what happened last night, my wife’s manicurist is from Vietnam and her brother just moved here and wanted to buy a house and found a for sale by owner in Richmond for $282,500 and she called about 7:30pm, the house just went on the market two days ago. I said come on over, that house is not going to be gone. So by 8:30pm I had a contact written for her, I called her realtor and said he is what I want you to do, I want you to write a contract, I want you to pay $2,800 in their closing costs which they like because he was getting a commission that he was really only to write a contract for. He was glad to write the contract, save him $2,800. I call the lady last night, 9pm, and she said it is my mother’s house and my mother went to bed but I will give you an answer in the morning. So we emailed the contractor last night for full price and here is what made the contract work out, I had the seller put up $20,000 of earns money, which is, it is show me money because it doesn’t mean anything, you get the money back if you don’t get the house and also we put a quick closing on it. So if you are going to make an offer on a house, get pre-approved, don’t be scared to put out $15,000-$20,000 earnest money because you are going to get it back, it goes toward the down payment and the title company doesn’t get to keep the money, you got a 7-10 day option period that you opt out for anything, you can call the seller on the phone and go I drove the street, backed out and I want my money back, they don’t get the money. So I would definitely say put up more earnest money because when a seller is looking at multiple contracts, they are going to take, they are going to look at it, so even if your offer is going to be a little lower and they see a short closing, like a 30 day closing in there, or they see you are putting up $25, 000-$30,000 earnest money, it gets their attention but as an example, last night when I called that lady 9pm the house has been on the market two days, she got 3 offers in but no, let me rephrase that, she had 3 people say I am going to send you a contract tomorrow but we got our contract there last night and they executed it this morning at 9am.
Brad: There you go. That is how they do it at Reliance.
Mike: And I will tell you something else that is going on, realtors that are good, they are looking for properties all the time but one comes on the market, I am not kidding you, it is not unusual to get 10-15 contracts in one day. So what the realtors are doing, if they know you are looking for a house in a certain area and screen puff comes on is priced right, they will put an offer in for you but you haven’t looked at the house. They will call you on the phone and say hey Mike, we got a house just like you want, I am going to put an offer on it and I am going to put a 7 day option in it, where I am going to put $10,000 earnest money, which doesn’t go up unless they execute the contract and you have 7 days to go look at it, they are not even waiting to get the customer out there because they don’t want to lose, so I think it is important to know what you are doing and I would definitely get a realtor that doesn’t mind working on Saturday, Sunday or 9PM because I got a realtor last night 8:30PM and he stayed up until 9:30PM/10PM writing the contracts and he made $4,500.
Brad: So call Mike over at Reliance Mortgage.