I have come across a variety of issues as a result of potential buyers have so much information at their finger tips via the internet. What I have found is that the information they find is not always current or accurate when it comes to buying a home. Below are three examples, but I am sure similar situations arise across the entire spectrum in terms of the steps taken when buying a home.
1 . The first issue that came up was when a client called and said that her credit score was good and they were ready to start their house hunt. My experience has taught me to never show a home until I have a prequalification letter from a known lender. In this case, the FICA score, which is the score used in obtaining a mortgage, was significantly lower than the credit score you get when using an online credit service. So, if you are tracking your credit in anticipation of buying a home, you should contact a mortgage lender and confirm your FICA score to make sure your ready to start looking for a home.
2. The second issue involved a buyer who tried to put together his own budget for his house. I appreciate every individual who puts thought into their monthly budget for a home. However, once they get an idea and are ready to start looking, again I highly recommend a mortgage lender consultation. In this case my buyer used a 5% interest rate when my recommended mortgage lender was currently quoting 4.75%. My client mistakenly added money to his monthly budget. In the end, he had overestimated his monthly payment by $120 per month which would have allowed us to look at homes priced about $20,000 more. $20,000 makes a huge difference, especially when you are looking at homes between $150K and $200K.
3. One more thing buyers need to be aware of as they look online at homes is that the information they see is at least one day behind what a realtor sees. This happens because most public websites are populated by the Multiple Listing Service that realtors use. These public websites are not live, but the data does synchronize during the night. This means the data is always one day behind. This could be critical if a super hot property hits the market. A realtor will know one day before a buyer, unless the buyer has been working with a realtor and has an automatic alert set up.
Don’t get me wrong, I love that buyers have access to a lot of data. Many times, a buyer has called me and asked to see a property. I love when a buyer takes the initiative and starts tracking their credit and puts together a budget. However, at some point, the buyer benefits greatly by using a mortgage lender and a realtor as their consultants in the home buying process.
Good luck and good buying.