When Should the Buyer Start the Loan Process?

Each state has different requirements and time lines concerning the real property purchase process. A major part of this process is, of course, the loan process. As real estate agents, we must be certain to educate our buyers on this process and its importance with regard to the purchase transaction. This is especially important for those of us doing business in resort or vacation areas frequented by buyers who do not live in the state where they are buying property.

Therefore, in order to have your buyers as educated as possible, one of the first things you want to discuss with your buyer is getting pre-approved. This saves everyone a lot of time and allows the buyer to understand that the loan process is key in getting an accepted offer as well as staying compliant with the purchase contract timeline.

While it's understandable that some buyers may hesitate in starting the loan process -- maybe they are concerned that the inspection will reveal some devastating damage or they are still looking at other properties -- various contingencies are dependent on the timely completion of each task within the loan process. It is important to let your clients know that it is easier to cancel the process than it is to start the ball rolling.

To help make sure the buyers are aware, I have added a flow chart of my state's loan process to my buyer's packet. This allows me the opportunity to go over the various informational documents with the buyers when I give it to them. Not only am I perceived as well-informed, the buyers understand what's important.

Buyer be educated. Seller be prepared.