Before getting your hopes up about the offer on your home, take a look at the buyer's loan approval letter.

#5: Make sure your buyer can close the deal.

What's worse than putting your home on the market and getting no bites from buyers? Getting into contract with a buyer who can't close the deal! And it happens all the time -- the buyer's loan falls apart, dashing both your hopes and your moving plans. And, you're left in the lurch, kicking yourself for all the potential buyers you missed out on during those weeks that your MLS entry was marked Pending -- Do Not Show.

When you get an offer, don't let your gratitude and relief fuel an immediate acceptance. Before you pull your place off the market on a buyer's word that they are both willing and able to buy it, go the extra mile to make sure they can do the deal.

Read the pre-approval letter. Of course, at a minimum, you'll need to see the buyer's loan approval letter. But you'll need to take an extra step to be a super-smart seller: read it! Make sure that the letter is a pre-approval, not a pre-qualification. The difference is, a pre-approval should state that the letter's author has actually reviewed the buyer's credit report and found it meets lending guidelines. You'll also want to know that the mortgage rep has verified that the buyer has the assets and income it will take to obtain a mortgage. If the letter doesn't say so, you might want to have your Realtor give the buyer's mortgage broker a ring and give the approval the smell test. How certain is the mortgage broker that the buyer will qualify? How certain is your Realtor that the mortgage broker knows what they're talking about?

Check the deets of the wanna-be buyer's loan. Other items you'll find in the approval letter can also clue you in. Is the buyer planning to use an FHA loan? If so, that's great, so long as your property is in FHA-okay condition. How much is the buyer/borrower planning to put down on the place? Don't fret just because they are putting less than 20 percent in, but know that under 10 percent is likely to be an FHA deal and, again, you may have to do some repairs unless the place is in good shape. And if you're in the enviable position of having multiple offers, don't just compare offers based on their price; a buyer who is putting 20 percent down is more likely to close than someone scraping in at the 3.5 percent minimum, and that's worth something!

Make sure the buyer has some skin in the game. Is the buyer offering an earnest money deposit? How many days do they need to finalize their loan, and are they willing to beef up their deposit afterwards? If they have no funds to deposit up front, chances are they'll struggle to close the loan. And if they are willing to increase their deposit to 2 percent or 3 percent of the purchase price after a reasonable (15 days, plus or minus a few) loan contingency period, you can at least project that you'll be able to breathe easier shortly. In most states, if the deal falls through after the buyer removes their contingencies, the deposit money is yours. So the average buyer will do everything in their power to avoid forfeiting a large chunk of deposit money. If the deposit is substantial, they'll be really, really sure they can close by the end of their contingency period. And if they don't, you'll have their deposit money to soothe your hurt feelings!

Obviously, the problem of your buyer's qualifications is a high-class problem -- you only have to deal with it if you have a buyer in the first place! Before you take your place off the market in reliance on their word that they can do the deal, make them put their deposit money where their mouth is and do a rigorous review of their loan approval. If either is not up to snuff, negotiate to continue showing your place until the buyer removes their loan contingency. Can you say backup offer?

NEXT: #4: Be creative, open and flexible about structuring the deal >>

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