Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
As if it is defying logic and all sensible projections, the housing market continues its ascent higher with each passing month. As I have been broadcasting for quite some time, the lack of available houses in the marketplace has been causing severe competition and pushing pricing higher despite the increase in mortgage rates, and despite the potentially adverse tax benefits.
Homes that are sensibly priced and well-presented are in high demand and have multiple buyers vigorously competing for them. In today’s market it is not uncommon for a home to receive a “full ask” offer, or even offers “above ask,” which is adding a lot of pressure on buyers. While this might seem like an advantage to sellers and a disadvantage to buyers, the opportunities and risks exist on both sides of the table depending on how each party is guided. Working with a competent lender and real estate agent can save buyers and sellers alike the time, money and heartache that can otherwise be avoided.
Like never before, we are working with potential home buyers much earlier in their house-hunting process, and we are positioning them to be ready to buy when they find that “right home.” Getting a firm pre-approval is no longer a good idea—it is now the difference between getting that house and having it slip away. Sellers are now carefully analyzing all offers with their accompanying pre-approvals to see how thoroughly the buyer was vetted before that approval was issued. Some are accepting secondary offers merely because the buyer is not able to present themselves in the best light.
I was recently contacted by someone who I know has a well-established relationship with another mortgage agent, but he was very concerned about the pre-approval that he got about a potential buyer for his house. Without going into too much detail, I was able to give him a few pointers and some cautionary advice on how to ensure that his buyers were serious and will close on time. I just heard from them that the buyers were not able to procure the requested items from them and are potentially thinking about withdrawing their offer. It is sometimes better to find out about potential complications early on in the process before people become too vested.
I am advising my clients to get fully approved for “max financing,” leaving no question as to the prospect of getting a mortgage in an orderly and timely manner. Get all your personal paperwork and qualifications out of the way, thereby giving the seller the confirmation that your financing will be a non-issue. Doing so will also give you and your lender the necessary information to manage the interest-rate lock-in decisions and timelines, putting the sellers at ease that you will close as scheduled. We have also been very active in helping sellers and buyers work out closing timelines and arrangements so that all parties can manage their calendar and schedule to suit their individual needs. This can only be done with advanced preparations and guidance.
Another aspect of the negotiation process that is quickly evolving is the contingencies and acceptance terms. Sellers want to ensure that their buyers will not be derailing the process because of a tepid inspection or because of appraisal, value or other financial demands. Our buyers can expedite this process and handle much of the preliminary items in advance to ensure a quick negotiation. I have experienced countless deals that got done at a beneficial price and timeline for both parties because we positioned them for a quick contract agreement. This can translate into thousands of dollars, and perhaps tens of thousands of dollars over the life of the home for those who can act promptly.
Good homes are indeed scarce, but mortgage and real estate professionals are plentiful. Finding the right home while being represented by the right real estate and mortgage professional is something everyone should be taking very seriously right now. These days, it’s a matter of more than just money.
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