Tuesday, December 4, 2012

The Power of the Pre-Approval

You may have seen the ads on tv and maybe you've even been told by your agent to get your loan pre-approval.  Unfortunately you need it.  It's not a guarantee, as one banker told me recently.  And he's right.  But it does tell the home seller that you are qualified "enough" to be making an offer.

I had the unfortunate experience this past week of working with a buyer that hasn't even started her pre-qualification, despite being told to do so 10 days ago.  She's an out of state buyer that is interested in buying a home soon.  So, I told her, "get your pre-qualification started first thing on Monday because they can take a week or longer to get completed."  And one week later we found THE ONE!  The perfect home.

So, the question becomes.....Do we write an offer without the pre-qualification or do we wait?  Do we risk having the offer be rejected, or do we risk having someone else submit an offer before us?  I've drafted the offer.  But now it just sits.  Waiting a decision.

This is why it's very important to get the pre-qualification done.  Even though it's not a guarantee that you'll get the final loan on that specific home, it does allow you to keep the process moving when you find the house you want to buy.  It's a reassurance to the person you're making the offer to that you've got your ducks in a row and you're prepared to move forward.  Without it, the seller is left wondering if you even have a credit score worth a banks consideration.

Do yourself a favor.  Don't fall in love with a home only to find out you can't have it.  Get your pre-qualification done.  No, it's not as fun as shopping for a new home.  But it's not as agonizing as a root canal either.  Just get it finished, get it out of the way.  Once it's done, it's done.  And you know exactly where you stand.  You know how much money you need to bring to the table to make your dreams a reality.  You know what your payments will be.  And you know that when you find THE ONE, you can write THE OFFER.


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