Preapproval Recommended
It’s also advisable to have a mortgage preapproval ready before any FSBO shopper starts searching for possible FSBO purchases. With a mortgage preapproval, the FSBO shopper can close the purchase almost immediately. This is an additional negotiating advantage for the savvy buyer.
Other shoppers who have not yet obtained a mortgage preapproval will normally have to ask for 45-60 days from the seller. That is at least two more months of loan, insurance and tax payments that the seller must endure. If such payments equal the difference between the buyer’s offer and the seller’s price, then the seller is losing money by going with the higher offer (and waiting). This is something that many negotiating buyers fail to bring up with the seller:
What good is a higher price for the seller, when they have to use those additional profits to cover their costs of staying. This calculation does not even consider the worth of the seller’s time as they wait for the buyer to obtain a mortgage loan.
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