Home buyers and sellers beware: Free can cost too much

If you’re thinking about listing your home or if you’re thinking about buying a home, no doubt you have seen offers for free online market evaluations and offers for free mortgage pre-qualifications.

 

While these services don’t cost you anything in dollars, they can still cost too much. The price is in time lost and in setting unrealistic price expectations in your mind.

 

First the free home evaluations.  While a few might be reasonably accurate, online estimates can be as much as 30 or 40% off – in either direction. If you believe an unrealistically high valuation and insist on using with it when you offer your home for sale, you’re asking for months of frustration and heartache as you hope and wait for a buyer.

 

If you believe a valuation that this is lower than current market values and use it for pricing, you’ll be losing money when your home sells.

 

Or, that low price could discourage you from even trying to sell or trying to refinance into a lower interest rate.

 

Why are the values they so far off the mark? Because there’s much more to a home value than age, square footage, and city.

 

The computer algorithms used by many online companies are not able to compute things like the quality of craftsmanship, a home’s condition, the view, the desirability of the school district, the desirability of the neighborhood, or the distance to highways, shopping, recreational facilities, etc. It could compare your house to houses that are vastly different.

 

Free Mortgage Pre-qualification is a poor idea for two reasons:

  • It can lead you down the wrong path in your home search – setting you up for disappointment.
  • It can cause you to miss out on a home you really want.

Why? Because pre-qualification is nothing but an uneducated guess based on information you provide. Most of those ads are also accompanied by the promise of the lowest interest rate possible. Do be aware that those rates are only offered to a select few.

 

What you need is a pre-approval. You should get it from a trusted lender who will give it to you in writing along with the interest rate the lender will offer based on your verified information.

 

With that information in hand, you’ll know the correct price range for your house hunt. It really is no fun to fall in love with a house and then learn that you can’t possibly qualify to buy it.

 

Why will pre-qualification make you lose out? Because today’s sellers want to know the buyer can buy before they accept an offer. Only a pre-approval from a legitimate lender offers that proof. Pre-qualification may express your desire to purchase but does not do much to prove your ability to purchase in a specific price range.

 

The solution?

 

If you’re selling, get a market analysis from a local real estate professional (like me) who knows the neighborhood and knows the homes yours will be compared to.

 

If you’re buying, take the time to get pre-approved with a reputable lender who serves the real estate market. Get a consultation from a reputable company or head to BG Home Solutions.

 

Call me whether you are buying or selling! I can provide you with a market analysis – and I can refer you to local lenders who have served my clients well.

Leave a Reply

You must be logged in to post a comment.