Sound Advice 11-17-23
This week, Berkshire Hathaway Realtor Elizabeth Johnstone answers a reader question: What’s the most common deal breaker in residential real estate, and how can you avoid it?
“The most common deal breaker happens when mortgage financing is not approved. To minimize this risk and maximize a smooth path to closing, follow these steps: First, be sure any offer with mortgage financing includes a pre-approval letter from a reputable lender, written within 30 days. Next, check the mortgage contingency date in the offer. Finally, ask when the interest rate will be locked-in, to ensure mortgage payments will be within the approved range. A buyer may be able to obtain fully underwritten mortgage approval in advance, known as Buyers Advantage, almost equivalent to all cash, pending an appraisal that supports the contract price. An appraisal gap clause (where the buyer covers any gap between the appraisal and contract price, up to a certain amount) and proof of funds to cover, can mitigate this risk, as well.”
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Berkshire Hathaway HomeServices
New England Properties (Mystic)
Mobile: (860) 287-1641
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