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 down payment and cover closing costs? Ideally, a buyer
should have 20 percent of the home’s price as a down payment 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.