09.30.14 by Jeff Johnson
The old way of buying a home simply won’t work today. You shopped around, made an offer and then went to the bank to get a loan. If you were denied or there were problems, you walked away. Today, a buyer needs to speak to the bank and obtain a loan pre-approval prior to shopping and definitely before making an offer on a home. Not being pre-approved today won’t get you past the front door.
Today, with online listings and so many real estate resources available to buyers and sellers, it’s easy to quickly get a property in front of the masses, with buyers often taking the lead to see homes as soon as possible. Transactions happen at the same speed. If you’re not approved for a mortgage when you make an offer, the seller risks waiting weeks to see if your loan will go through. That’s not good motivation for the seller to deal with you. Show that you’re pre-approved, and you’ve eliminated one huge hurdle for the seller.
Simply put, pre-approval will determine how much home you can afford to guide your search. No good real estate salesperson wants to waste time on fruitless pursuits, and you certainly want the best working for you. To be taken seriously by an agent, a buyer must be prepared with proof of funds to back up his or her shopping choices.
Many home sellers today prefer that prospective buyers be pre-approved for a mortgage before submitting an offer to buy a property. As a buyer, obtaining a pre-approval before making an offer strengthens your hand in negotiating with the seller. In a competitive market, you may face multiple offers on a property you want. If you don’t have a pre-approval letter to go with your offer, you have zero chance of getting your offer accepted. Not being pre-approved means you aren’t a serious buyer in the eyes of the seller.
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Source: Zillow Blog