Why getting pre-approved should be your first step when buying a home


mkm-realtorworld-6_22_18Time for another REALTOR WORLD guest post: by Devan Hafle from MADE Real Estate Professionals in Eaton, Ohio:

So you’ve made the decision to buy a home. You’ve seen several online that may be exactly what you want. You start to see a trend in list price based off the area you’re looking in and what you want. But where do you start? Should you call your local real estate agent first and schedule a showing?

The first question any experienced agent will likely ask you is whether you have been pre-approved for financing. Why does this matter? You know the home you want to see is perfect! It’s exactly what you want. So why won’t they just schedule the showing?

Being pre-approved is import for many reasons: 

1) The house you’re interested in may not qualify for all types of financing. 

Some financing requires a property to be in “move in ready”  You may be looking in a lower price range or maybe you’re looking at a foreclosure. This is GREAT! This home has the potential for you to build some sweat equity with some minor repairs over the years. It’s a good chance however, that those minor repairs are what may actually prevent the home from qualifying for certain types of financing. Your lender will be able to quickly answer these questions for you, and in turn, you’ll be able to tell your real estate agent what type of financing you are utilizing, to ensure the property is the right one for your financing type.

2) You may not be shopping in the right price range.

When your agent knows what you can afford they can do a better job at helping you find your dream home. How devastating would it be to go tour a home, fall in love with it only to find out that it’s out of your budget? Your lender will be able to give you the price range that you are pre-approved for. Your agent can then use this number to help you find all the homes that meet your budget and needs.

3) Better odds of your offer being accepted. A seller is more likely to accept an offer from a pre-approved buyer. 

Let’s say you’ve found the home. It’s the one you want, so you decide to make an offer. In the current market there is a good chance that someone else will also make an offer on the same property, at the same time. If the other offer is from a pre-approved buyer and you are not pre-approved yet, the seller is more likely to accept the pre-approved buyer’s offer, knowing that their financing is in line.

4) Many sellers will often require buyers to be pre-approved before they can even tour their home. 

Selling a home can be stressful for a homeowner. Often times a home will take several showings in just one day. That’s a lot of foot traffic and a lot of clean up to do after. It is common for a seller to limit their home showings to serious buyers only. This can be accomplished by requiring all buyers to be pre-approved before touring the home.