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Larry King
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You want to make sure that you're doing the right thing. You want to make an offer contingent upon securing financing. As a Buyer's Agent I have found that most people can qualify for financing - but at a variety of terms.
I require that my clients first contact a mortgage officer and take the steps to become pre-approved for their loan. This is important for several reasons. One, I can have a better idea what price range that we should be looking for; and second, once we find your home, a pre-approval letter submitted with the offer is almost like cash. Many times the pre-approval letter alone is worth a substantial price discount. In addition, if two offers were made for the same house at the same time and one was pre-approved, you can be sure that the pre-approved Buyer will be the new homeowner. But on to the question at hand - can we make an offer contingent upon securing financing? No one is completely approved for a mortgage until you close escrow. During the offer, counter offer, or the escrow process something might happen that would change your ability to qualify for the mortgage for which you have been pre-approved. You might lose your job, the rates might change drastically, or there might be any number of problems that would change things. So... There is language in the offer that will assist you called a finance contingency clause. The finance contingency clause states that your offer is conditional upon applying for and receiving a conventional loan in an approximate amount, with interest not to exceed a certain percent, stating the maximum amount of points you are willing to pay to obtain the loan. You could name other conditions if you wish such as closing costs not to exceed a set figure, or financing being obtained from a certain lender. I will assist you in reducing this to writing. Remember, the purchase contract is the place where financial information for the purchase is first agreed upon and remains the primary source for spelling out how the Buyer and Seller should perform. See my pages on the following for additional information.
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