The buyer's qualification process removes much of the uncertainty for all parties involved in a house sale. The buyer needs to know what he can afford, the seller needs to know that the sale is secure and the Estate Agent has a similar interest as he or she is dependent upon the sale for commission.

Are you a good risk?

Lenders will refer to your credit record when they determine whether you can be trusted to pay back the loan. Correct any mistakes and explain blemishes on your credit record if applicable to your potential lender. If your failure to perform is due to extenuating circumstances that are unlikely to recur it is possible that you may not be penalized for them.

For more information go to Qualifying For A Home Loan

Get pre-qualified

It is extremely disappointing to find out that you can't afford a house that you've already fallen in love with. You can partially avoid this by having yourself pre-qualified. Pre-qualification will give you a general estimate of what you can afford. It entails finding out from your mortgage lender how much you are allowed to borrow and obtaining a certificate to verify this.

None of the information used for the qualification is verified and therefore the process does not come down to a commitment from the lender. The loan is not guaranteed. Should new circumstances arise or hitherto unavailable information come to light, a bank could refuse the bond in spite of pre-qualification. Nonetheless, pre-qualification remains a useful tool. It gives you an idea which price range to shop in and the confidence to commit faster when something promising comes your way.

Pre-approval

The distinct difference between pre-qualification and pre-approval is the fact that the latter involves a preliminary scanning of the borrower's credit history and the verification of assets and employment. The loan is granted in principal before you have found a home to purchase. Pre-approval is usually only valid for 3 months and if the home is valued for at least the purchase price, the loan should be granted. This is an even safer bet than pre-qualification and will give you some leverage when negotiating about the price of the home.

Final approval

Final approval is given when all has been said and done. In other words you have found your home, a valuation has been conducted, the offer to purchase has been signed by yourself and the seller and the lender finds everything else acceptable. Once you've received final approval you are ready to conclude the sale.

Knowing your needs

Having a clear idea of what you are looking for in a home will greatly facilitate the buying process. A few points to ponder would be the size and location of the home and the things that you consider to be absolute essentials. The seller and Estate Agent will be more eager to work with a buyer who knows what he needs, what he wants and what he can afford. A qualified buyer can look forward to a more secure buying process.

Regarding agents

A buyer's "wish list" plays an important role in the buyer qualification process. A buyer that knows what he or she wants in a home can save a lot of time and effort. The buyer must identify his "deal-breakers" and preferences regarding a new home.

Qualifying is an ongoing process starting at the initial meeting and only coming to an end on the day that the property finally gets sold. It creates a mutual feeling of trust and saves time, money and effort. Knowing what a client wants enables an agent to provide a more professional service. You must establish a buyer's physical needs, financial position and psychological needs.

Obtaining information without misunderstandings getting in the way is an important skill and one that is essential to master. A 'practical, compact home' may mean one thing to the buyer and something entirely different to a given agent. It is important to listen rather than talk. Ask open questions and don't accept unqualified answers.