If you are a first-time homebuyer or haven’t purchased a home recently, you might initiate contact with an agent and you could get denied their service due to the fact of not have a pre-approval. Why would a real estate agent do this to you and require you be Pre-Approved Before Showing You Homes? Well, if you change the scenario it would make complete sense. For example, if you are going to Starbucks to buy a coffee without your wallet or any money, how do you expect to purchase your beverage? In this case, your money is the pre-approval so if you have $5, you know that you are pre-approved to spend up to $5 on your beverage at this time. Home shopping is very similar to this in the fact that if you have a pre-approval letter for $200,000 you can rest assured knowing that you can spend up to $200,000 on a house. In the following paragraphs we will go over various reasons why agents require you be Pre-Approved Before Showing You Homes.
One of the reasons agents want you to be Pre-Approved Before Showing You Homes is so they know how much you can afford. This keeps the guessing out of which properties to show you. Once the pre-approval has been issued you have a ceiling on purchase price and know that you can’t go above that since the borrower isn’t approved. From the borrower’s perspective this will make sure they don’t get teased by a home that is out of their range that they can’t afford. This makes the buying process a lot smoother transaction.
When seller’s of a home are reviewing multiple offers for their property, there is a high probability that they will give more power to the offer with the pre-approval backing it up. For seller’s to commit to a buyer without a pre-approval is a risk due to the fact that the buyers have not been vetted to purchase a home.
Another of the reasons agents want you to be Pre-Approved Before Showing You Homes is the fact that a pre-approval is a lot stronger than a pre-qualification. In a pre-approval the lender looks into your background, income, assets, and debt before letting you know how much you can afford. With a pre-qualification it is only how much a lender thinks you can afford just by taking your word for it. Here at www.loanconsultants.org we ensure that we due an extensive look into your background before issuing any pre-approval as we want to make sure we can facilitate the loan.
In adding on to #3, having your pre-approval in hand when looking to purchase a home can sway sellers to accept your lower offer than a different buyer with a higher offer. Knowing the certainty behind your pre-approval is vital in the art of negotiation.
Just by obtaining a pre-approval before looking for homes is a step that can save you days if not a week or more in your home buying adventure. Just by getting the pre-approval out of the way before you begin searching just streamlines the entire process to save time in the end.
This is the truth these days. Real estate agents will require that you be Pre-Approved Before Showing You Homes. From their perspective this makes perfect sense in the fact that they need to be efficient with you and can’t afford to be wasting time either.
As you can see, there are many reasons why real estate agents want you to be Pre-Approved Before Showing You Homes. Take this into consideration if you are looking to buy a home and your experience will be a pleasant one.