Home Buying in 11377>Question Details

Harker207, Home Buyer in 11377

What are listing agents legitimately allowed to ask for these days in terms of financial disclosures from buyers?

Asked by Harker207, 11377 Tue May 25, 2010

I am looking to buy a co-op in Queens and I have a couple of questions. First of all, the first offer I made on a place was rejected because I had 10% down and the seller refused to accept any offers without 20% down because he was afraid I would not be able to get PMI, despite having a pre-approval letter that covers PMI as well as my mortgage. Another broker I spoke with has also voiced difficulty about getting PMIs lately, but I am not hearing this from everyone, so I'm a little confused. Secondly, the selling brokers have asked me to come to the offices armed with substantial financial information before filling out the offer letter-- two years of tax info, three months bank statements, pay stub, etc.

Is this normal now? Is this something they can actually require of me before conveying my offer to the seller? Or does this just cripple me in negotiations?

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Answers

6
Hi Harker 207 !

Congratulations that you CAN get a mortgage!!!! You ARE in the Drivers Seat in this "Buyers Market", however, some sellers are their own worst enemy.

As you know the economy has changed a lot of the way we used to do business. This has hit the real estate market very hard.

Yes, the seller can ASK for these things, however, a buyer can refuse and may be rejected.

Both parties loose. The seller may have unrealstic expectations of buyers and thus may not be able to sell for the terms they want. Buyers need to be prepared to walk away if they do not want to disclose all of the requests.

Is this "normal" now you ask?

Sellers are often asking for higher down payments now to reduce the chances of a buyer being unable to get their mortgage and therefore the seller loosing marketing time.

Usually a pre-approval letter stating what has been reviewed: Credit Score; Employment history; Funds to Close are acceptable to show the seller that in the eyes of the lender you meet their tough requirements.

Ask you lender to re-write the pre-approval with these statements including, in your case, that the lender has also reviewed your ability to get PMI. Then re-submit the offer, using a "Buyers Agent", demonstrating your position: nothing to sell; pre-approval in hand; can meet the sellers terms to close. If you can make the mortgage commitment a shorter time frame the sellers may feel better.

If they still say NO and request other information then you can decide if you wish to go forward.

There are other homes out there to choose from and it is a "Buyers Market".

Always be willing to walk away. If you can get a mortgage then You are in the Drivers Seat more than you know.

Best Wishes,

Mary Condon
0 votes Thank Flag Link Thu Jun 9, 2011
Hi Harker, the amount of financial disclosure being asked for here is ridiculous. The downpayment thing would be based on what the Coop board requires. Most want at least 20%. That would make a buyer with only 10% a non-buyer from my point of view.

Getting back to the disclosure. What I make sure my clients receive with an offer are:

1) Letter of Bank pre-approval.
2) Credit check with FICO score.
3) proof of income (last years' Fed return, first two pages only).
4) proof os assets (current Bank statement).

I do my own type of pre-qualification after receiving these documents. I prefer a customer with a 28% DTI ratio. Anything more could be a problem down the road.

Brokers will have their own criteria but any offer must be presented to a seller from their broker. This is required by law. Even without all documents, the offer should be submitted.

If I receive an offer verbally, I submit it but I caution my clients to consider it pending review of financial documents. This way I make sure my client receives the offer and I counsel them to wait for all financial documents before making any decision. Good luck.
0 votes Thank Flag Link Sun Sep 19, 2010
Harker

Welcome to the 'brave new world' of finance. It's actually not so new. Years ago 20 percent was the norm. The market was much more stable. People had 'skin in the game'. If you have a pre-approval for the mortgage and PMI that should be adequate unless the seller has given specific instructions to see your financial's. You mentioned that the seller has requested 20 percent down to make sure the deal goes through. If you can't comply with that then I suggest that you move on. The seller also has the right to impose conditions to make him/her feel more secure about the transaction. It is in fact more difficult to purchase a coop for 10 percent down even if you have a pre-approval. It may not be worth the paper it's printed on, who knows! Check the boards requirements also. They may want 20 percent down too. It's very frustrating for everyone right now. You may want to try for a condo. There generally is no board approval necessary but the agent and seller may make the same requests. Good luck, show some flexibility if you can. I am available to help if you need it. I cover Queens and Nassau Counties.
Allen Bauman
Century21 Yve R. E.
Licensed R. E. Agent
NYS Certified Residential Appraiser.
516-791-3846
allen.bauman@gmail.com
0 votes Thank Flag Link Wed May 26, 2010
A lot has to go into completing a sale. The lengthy
paperwork,lawers,banks and appraisals that need
to paid. Only be told after all that work that the deal
would not be able to close. If your agent dose his/her
job right you will have a smoother transaction. I know
that some of the questions seem to be a little to much
but,its for the best out come.

Fajardo Delacruz
Licensed Real Estate Agent
Century Homes Realty Group
Direct Line: 347-932-0609
0 votes Thank Flag Link Tue May 25, 2010
Do you have your own agent and is the listing agent an agent directly related to management--if not do discuss your concerns with your attorney--the selling agent is trying to verify that you meet board requirements, however there may be some privacy issues involved if the listing agent is not directly related to management, therefore before providing any personal information do consult with your attorney.
0 votes Thank Flag Link Tue May 25, 2010
The agents are doing their due diligence. Co ops have their own financial requirements that differ building to building and can be very different from that of a bank. In effect the agents are qualifying you for the building so not to waste your time, and the sellers time.
0 votes Thank Flag Link Tue May 25, 2010
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