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Experienced one too many failed real estate transactions this year? Here is how to dramatically improve your success rate.

April 20 2020

sold sign familyThere's nothing worse than developing a strong relationship with a buyer and finding them the home of their dreams, only to have the deal fall through at the last minute. While some transactions fail because the appraisal comes in lower than the purchase price or the home inspection reveals a previously undetected flaw, too often they fail because the buyer cannot secure the financing due to overstepping their buying abilities.

Is there a way to avoid this painful and sometimes unexpected misstep?

According to the National Association of Realtors' 2019 Homebuyers and Sellers Study, 89% of home buyers finance their purchase. However, not all buyers, especially first-time home buyers, understand a mortgage preapproval can make the difference between a successful transaction and one that falls through. Even further, few consumers understand the difference between an informal prequalification and a rigorous preapproval. Due to this, it makes sense to strongly encourage buyers to find out how much home they can afford by securing a preapproval before they fall in love with a property that is beyond their means. However, as RE Technology recently learned, not all preapproval processes are the same.

To ensure agents do the best job of encouraging their buyers to focus on homes they can afford, check out Quicken Loans' Verified Approval. Verified Approvals are so thorough they position buyers with the same purchasing power as someone with cash. This makes their offer more attractive to potential sellers, especially in a multi-bid situation. Thanks to how robust the approval process is, Verified Approval is much stronger than a normal preapproval.

Verified Approval by Quicken Loans involves an underwriter's comprehensive analysis of a client's credit score, income, employment status, debt, property, insurance and appraisal, paired with a satisfactory title report/search. With a Verified Approval, much of the paperwork is done upfront — Quicken Loans pulls a credit report, provides (at least tentatively) a preapproval amount and helps clients choose a loan type (fixed-rate, ARM, FHA, etc.) and loan term (15 years, 30 years, etc.). This puts clients one step closer to the finishing line when it comes time to making an offer.

Buyers with a Verified Approval are more confident and can be treated the same as a cash buyer because they know the size of the mortgage they will be approved for. If a client uses Quicken Loans' RateShield Approval, their rate gets locked in for up to 90 days. The reason for a more confident buyer is that they know the loan will be financed. Quicken Loans even guarantees it, or they pay the prospective buyer $1,000.

When speaking to Ari Prostak, a top producing agent for Jason Mitchell Group, RE Technology discovered he strongly prefers to work with Rocket Mortgage by Quicken Loans because of Verified Approvals.

"Quicken Loans is more than just a big brand," Prostak says. "It is not only one of the fastest lenders to close but also offers great agents and brokers a chance to become even better. With Quicken Loans, a Verified Approval letter is used to enter a purchasing contract and if it doesn't get to closing because of something that comes up in underwriting, Quicken Loans will give the homebuyer/applicant $1,000 no questions asked." To read the full interview from Ari Prostak, click HERE.

There are many things agents can do for their clients to make sure they are ready to buy a home. Making sure they know how much house they can afford will greatly improve their chances of having a successfully completed transaction and more satisfied clients. Using the Verified Approval program regularly will help agents improve their repeat business and referrals. It is a win-win.