First and foremost, get a satisfactory pre-approval letter from a reputable and reliable lender. It should be subject only to a satisfactory appraisal and a purchase and sale agreement. I have a list of trusted lenders that I would be happy to share with you. I have seen a lot of bait and switch on rates and closing costs, and many lenders who simply do not live up to the promises they make when they start doing business with the buyer. I can not overemphasize how important it is to do business with any of the people I know, because when a problem arises (they always do!) these people will be responsive to us and the team of attorneys, surveyors, title examiners and appraisers that work with that lender. If you can learn from other people’s mistakes, please learn from the many people I have worked with over the years who report that they wish they had not worked with someone unknown to me. Remember, if your bank is not prepared to close on closing day, you will be in default, and your deposit of five percent will be forfeited. Again, I’d be glad to provide a list of people who wish they had taken this advice and incurred a lot of undue stress. This is likely to be the piece of advice you are most likely to ignore, but at least I’ll sleep at night knowing I tried to help you avoid the problems you may encounter with a stray lender.
If you already own a house, your pre-approval letter should say that you are qualified to bridge if your home is not sold. If you choose not to bridge, or don’t qualify for a bridge, you may want to consider making an offer with a 48-hour kick-out clause, which would mean the sellers could come to terms with you but would continue to market their property. Should the seller receive a bonafide offer, you would have 48 hours to either drop your contingency to sell your home, or to waive it and go forward under the terms of your offer.
Your Neighborhood Realtor