We often have Realtors with eager buyers who want to view homes before the buyers have been pre-approved by us. To ensure no time is wasted on non-viable buyers, Realtors need to ask a few questions about the criteria that make buyers viable: (1) Credit; (2) Income; (3) Equity – Down Payment.
Criteria That Makes Buyers Viable
Credit: Ask about credit scores, and make sure the buyers have had no BKs discharged in the last 2 years, or any foreclosures or short sales in the last 3 years. If they are confident their credit scores are over 720, you are probably safe with respect to credit. If they are unsure about their scores or their credit events, have them contact us first.
Income: If they are salaried with a six figure income, they are probably viable. If their income is less than six figures, then car payments, student loans and other debts can quickly make debt ratios too high to qualify. If they are self-employed, have them contact us. Self-employed borrowers often have ample cash flow but too little income “on paper” to qualify.
Down Payment: If they have good income and credit, buyers can garner FHA financing as long as they have access to a 3.5% down payment and closing costs either via savings or gift funds from a friendly relative.
If you are ever unsure of whether or not a potential buyer will be able to qualify, feel free to have them call me at any time. I would be happy to discuss their options with them up-front and let you know if there are any issues before you spend your time showing them homes.
