Q: I recently read two of your books and have a question. My husband and I live on the East Coast and are trying to move to the Midwest. I have contacted a buyer brokerA Buyer Broker is a real estate broker who specializes in representing buyers. Unlike a seller broker or conventional broker, the buyer broker has a fiduciary dutyFiduciary Duty is a relationship of trust between a broker and a seller or a buyer broker and a buyer, or an attorney and a client. to the buyer, because the buyer accepts the legal obligation of paying the broker. The buyer broker is obligated to find the best property for a client, and then negotiate the best possible purchase price and terms. Buyer brokerage has gained a significant amount of respect in recent years, since the National Association of Realtors has changed its code of ethics to accept this designation. in our new state and have been pre-qualified by a national lenderA Lender is a person, company, corporation, or entity that lends money for the purchase of real estate. (in the local East Coast office near where I live) for a home purchase in our new state. I also have a hefty cash down payment ready to use for a house purchase.
The buyer broker told me that I would not be able to buy a home in my new state without having a job and a pay stub from a job in the local area.
I don’t understand this. My husband and I have made the commitment to move and are looking for new jobs in our new state. Can we buy a home out of state with the intent to reside in the state within 60 days?
Is this buyer broker just brushing me off because I live out of state? I want to buy a home before I move to our new state and start work. Is this possible? I don’t know if this matters, but this is my first home purchase.
A: You say that you’ve been prequalified to purchase a home in your new state. However, that prequalification was probably based on you continued employment at your current job. The income and job used to prequalify you and your spouse for this purchase will not be available to you when you move. I’m not sure whether you made this clear to your lender during the prequalification process.
Also, prequalification is a far cry from getting preapproved for a loanA Loan is an amount of money that is lent to a borrower, who agrees to repay it plus interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds... In the preapproval process, you actually apply for the loan and go through the verification process. It’s possible that your lender didn’t realize you were moving halfway across the country, or figured that in the prequalification process, that didn’t matter.
The fact that you’re moving without a job is problematic if you intend to buy a house. If you quit your job and then try to close on a house, you may not be able to at the last moment. That would be a disaster for you and the sellers.
If you’re trying to close on your new home before November 30, 2009, in order to take advantage of the up to $8,000 tax creditA Tax Credit is an amount by which tax owed is reduced directly. In other words, a dollar-for-dollar amount is subtracted directly from the taxes you owe. for first-time buyers, you should intensify your job hunt so that you won’t have a problem qualifying for the mortgageA Mortgage is a document granting a lien on a home in exchange for financing granted by a lender. The mortgage is the means by which the lender secures the loan and has the ability to foreclose on the home..
As for the buyer broker, perhaps this was the message he or she was trying to convey. In the current mortgage market, you might not qualify for a loan without having a job or enough assets to put up as collateral. Perhaps the buyer broker didn’t want to spend a lot of time with buyers who may ultimately not be able to afford a home.
My advice: Find a job. Then, buy a home.
Read more on How to prepare for a mortgage refinance.