Are you a Ready, Willing and Able Buyer?
#1 Are you Ready? Is this the time for your Ministry to find a new home, or to begin planning for a future need?
#2 Willing- Do you want to move forward? Is your Congregation or Board ready to move in the vision God has given to you?
#3 Able- Having the ability to purchase. Do you have your financing in place and the down payment available to purchase the worship facility that you choose?
Unlike residential lending, church financing is considered commercial financing, and will require 20-30% down payment. This is a substantial investment and takes time to save. A seller will sometimes assist with up to 20% of the down payment, but the banks want to see that the buyer has at least 20% of their own money in the transaction. Therefore, it is important to know the amount that you will qualify for, so that you will have the down payment saved when beginning to look at property.
Churches, when they are priced properly, will sell very quickly. I sometimes have dozens of churches that want to purchase the same building. In that kind of competitive market it is important to be Ready, Willing and Able. Taking the time now to be pre-qualified for the loan will allow for you to be the Buyer in that sort of competition.
When a Realtor presents a contract, or in some cases, multiple offers to a seller, we have to describe all of the benefits and downfalls to each offer to our sellers. Price is not always the factor that causes a contract to be rejected. Most sellers will accept a contract purchase offer with reasonable terms from a well qualified purchaser, rather than a purchase offer from someone that has not yet been to the bank for pre-approval.
Your Best Negotiating Strategy is Pre-Approval!
Many commercial lenders or banks will not work with churches. A typical mortgage lender that you used to purchase your home will not be able to do a church loan for you. Perhaps a lender will tell you that they can do a church loan. Oftentimes they will get into the deal and find they cannot do the loan. A regular commercial loan is very different than a church loan. So, what do you do? Call me for referrals for the lenders that are currently working hard for the churches that I refer to them, and apply at 3 places. These loans are very subjective, and each banking institution will view your situation differently.
You will need the last 2 years income and expense records, checking and savings account statements, and year to date income for the church in order to go to the bank. Some lenders will require signatures from the pastor or members of the board. Some lenders may ask for personal information from a couple people that can personally afford the loan if your church has not been established a long time or is taking on a payment that is higher than you are used to paying. After you have provided everything to them, it will take 2-3 weeks for them to make a decision just to get a dollar amount that you can qualify for. This is not a difficult process, but does require some preparation and patience. In the end, with this sort of preparation you will be the one that is Ready, Willing and Able to purchase the worship facility that God has for your Church to fit into the vision that God has given you.
Once you are pre-approved, call me and let’s get started looking at property!
“The Church Lady”