A contract in place never means that you have sale. A real estate professional will try to determine a buyer’s financial status before they sign the contract, but all realtors should know what buyers with follow-through potential looks like. Likewise, buyers with follow-through potential are qualified buyers. All buyers should know how realtors recognize qualified buyers so that they can be ready when the time comes.
How do Realtors Recognize Qualified Buyers?
Buyers are prequalified—or even better, preapproved—for a mortgage.
Such buyers will be in a much better position to obtain a mortgage promptly.
Buyers have enough money to make a down payment and cover closing costs.
Ideally, buyers should have 20 percent of the home’s price as a down payment. Secondly, between 2 percent and 7 percent of the price to cover closing costs. If you plan to make a smaller down payment, then will need to purchase mortgage insurance. Your ability to provide earnest money in a timely fashion will be an indicator of liquid reserves.
Buyers income is sufficient to afford the home over the long term, too.
In a perfect world, buyers should spend no more than 28 percent of their total income to cover the principal, interest, taxes, and insurance. (PITI is often abbreviated as “PITI.”)
The buyer has good credit, which they are monitoring and maintaining.
They will have recently reviewed their credit report and have actively worked to correct any blemishes or errors found.
Buyers are not managing too many other debts to take on a mortgage.
If buyers owes a great deal on car payments, credit cards, and other debts, they may not qualify for a mortgage.