Buyers – The Importance of Pre-Approval (Unless you’re paying cash)
Why do I want you to be pre-approved before looking at homes? What harm can it do just to look?
As a Real Estate Broker, I get frequent calls from people that “just want to see a house.” When I ask them if they have been pre-approved, they tell me “I will talk to a lender when I find the home I want to purchase.”
In today’s market, many people aren’t able to get approved because of tougher financing rules. It’s a new world of banking and mortgage lending. You want to be certain that you are looking at homes that you will be able to purchase in terms of qualifying for the mortgage, as well as the property itself (some homes will not qualify for certain types of financing). Too often, I have seen transactions fall apart at the last minute because of financing issues.
Most home sellers and listing agents will not accept a purchase offer without a mortgage pre-approval letter. Home sellers want to know that the buyer can buy a house and that it isn’t just a dream.
Without a pre-approval letter you are just a “looker.” If you’re not serious enough to meet with a lender and get a pre-approval letter, then you aren’t a serious buyer in the eyes of a good real estate agent.
There is often also more behind-the-scenes action required to set up a home showing that most wouldn’t even thing of: Phone calls between buyers agent, sellers agent, sellers, showing appointment service, etc. Often, the seller must make arrangements to pick up the kids, dogs, or get an elderly relative out of the house. They get the house picked up, leave the lights on, load the family in the car, etc., hoping that you are the buyer for their home.
If you are not a past or current client, or personal referral, I will ask you for a pre-approval before we look at property, as part of my own security policy. Here is one of many reasons why.
In an ideal situation, after you obtain your pre-approval, I would love to meet you in the office first to discuss some very important things about the home finding process, such as:
-What are your desires (type of home, size, areas, etc.)
-What are some important things about your lifestyle I may need to know (for example, you have a 9’ pool table you need to accommodate)
-What is your timeframe? Do you have a home to sell? Are you locked into a lease?
-Explain a summary of Kansas Agency Laws to you – and why you and I should have a Buyer Agency Agreement
-The best ways for you to search and how to handle open houses
-The ways I can search (or set you up with automated searches) for you – and how you would prefer to receive information
-Home and Other Inspections
-Lead Based Paint
-Negotiating the Contract
-What to expect at the closing
-And many, many other details that I would like for you to know in order to be able to make the most informed decision possible
If you’re serious about buying a home, get your financial affairs in order and see a mortgage lender to become pre-approved. It will only take a few minutes and you’ll be prepared to find the home of your dreams. You’ll go into the process knowing what you can (and want) to spend, approximately what your payments will be, what the down payment will be, and that you’ll have an acceptable source of the down payment.
There a number of great reasons to use a local lender. I would be happy to give you my recommendations.
I hope you will consider working with me. You want want a professional agent with the experience, credentials and references to represent you. Professional designations are another sign of advanced education and commitment to the industry.