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. Ask the following:
1.
Has the buyer been prequalified or preapproved (even 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 percent of the home’s
price as a downpayment and between 2 and 7 percent of the price to
cover closing costs.
3.
Is the buyer’s income sufficient to afford your home? Ideally,
buyers should spend no more than 28 percent 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.
Reprinted
from REALTOR® Magazine (RealtorMag.Realtor.org)
with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright
2008. All rights reserved.