One thing I know after buying and selling many homes in my career as an investor is that the closing process can be long and tedious. When I need to sell a home in Miami Beach I try to keep that in mind when I’m looking for a buyer because I don’t want to have to start over with another buyer in a couple months. When a buyer doesn’t qualify for a mortgage loan it means my house goes back on the market and I’m starting all over again. So, I’m not just looking for any old buyer who shows and interest in my home, I’m looking for the best, most qualified buyer who will easily be able to close on the sale of my home.
Qualifying for a mortgage is much more tedious and time-consuming than ever these days, so I’m even more determined to find the best buyer up front. Some buyers have letters of pre-qualification, but that means they have only provided basic information to a lender. They can even get pre-qualified online. I’m looking for something more substantial than that, so I like to see a letter of pre-approval with a recent date on it. That makes me feel more secure about prospective buyers making an offer when I sell a home in Miami Beach because it means a lender has actually checked out their information and giving a tentative letter of approval, subject to other things of course. Every communication with a lender is somewhat tentative, and that leads me to the real subject of this article – a firm commitment.
The fact is that nobody involved in a real estate transaction really knows if there’s a firm commitment from the mortgage lender until a written commitment is received by the borrower, the buyer. A specific, dated letter from the lender to the buyer declares a firm commitment to loan a certain dollar amount at a specific interest rate on or before calendar date, and until that letter is received neither the buyer nor the seller or their agents really know if a sale is going to close. And that is the worst part of waiting for closing day, meaning nobody knows if the sale will close or not until that particular letter is received in the mail or by fax.
More often than not, buyers do not receive a firm commitment until the day of closing, unbelievable as that may sound. So, that’s why I take all the time I need and establish my own requirements as a seller when I want to sell a home in Miami Beach. I want as much assurance as possible that my buyers will get a firm commitment and be able to close on the sale.