Why is obtaining a written preapproval the first step in your home search?
In most areas of the country, the amount of serious buyers outnumber the supply of homes. This makes a lot of traditional thought about a Real Estate search obsolete. Just like chain wallets and baggy jeans, the days of making an offer before speaking to a lender are over.
Now more than ever, buyers need to be prepared and they need to stand out. Contrary to old methods, the first step to your serious home search is to get pre-approved with a reputable lender before you begin looking at home inventory. Here’s why -
Being prepared. You don’t know when your dream home is going to show up. When it does, you need to be ready to attack it. If you are not pre-approved, the offer will not be seriously considered. If you see the home, then decide to start the pre-approval process, a more prepared buyer will likely get to enjoy those lovely white oak floors and Craftsman style curb appeal.
Learning Experience. Although you may think you know everything about your financial comfort zone, speaking to a mortgage person is often enlightening. Educating yourself on your own affordability is the biggest favor you can do yourself before entering the market.
No harm, no foul. Pre-approval letters are often valid for 6 months. If you know you want to buy a house within that timeframe, why wait?
Stand out. Working with a good lender can often provide you contractual advantages. If your file gets placed in underwriting early, you can possibly write the offer with less contingencies. Ask your agent what you can do contractually to make the offer more competitive.
One of the perks of working with a strong and professional real estate agent is that they are well connected with some of the best lenders in the area. Since online preapprovals like “Quicken” and “Lending Tree” are often a disadvantage in the local markets, it’s best to consult with your agent before getting pre-approved.
Real Estate Agent
Golden Gate Sotheby’s International Realty