4 Reasons to Get Pre-Approved Befor...

I get asked all the time to show a client a Pensacola property prior to them getting approved for financing. When I explain that we really should get pre-approved first I have seen clients get upset. I had one client even go off on me and say “You Don’t Worry About My Financing…..You Just Open The Door.” Needless to say they did not stay my client for long and I recommended some other agents for them to work with. Lets discuss a few reasons why you should get pre-approved before looking at the property.

First it takes some time to get a pre-approval. There is a difference between pre-approval and pre-qualification. When you go online, input your information and get that pre-qualification letter it is just an estimate. Some have not pulled credit and most have not verified your information like income and assets. Basically the paper is worthless. A true pre-approval has verified everything on your application. This means you have went through the steps necessary to obtain the loan and the only missing piece of the puzzle is the property. This time used prior to looking the property will save you time in negotiations.

Second, most sellers want to see the pre-approval prior to considering an offer. This is obvious,  but imagine walking into that perfect property ready to make an offer. As we are working on getting that pre-approval another person sees the same “perfect” property and gets it under contract before we are finished with the loan officer. I have seen this happen too many times. The heartbreak is avoidable, by just making sure you put the horse in front of the cart in the homebuying process.

Third , some sellers will not allow you to even see the property without providing pre-approval. We have not seen this in a while since the real estate crash, but prior to the crash this was very common. I am starting to see it sprinkle its way back into the marketplace, as sellers only want serious buyers coming into their home.

Finally, you do not know what you dont know. I have had hundreds of clients start working with me and when they pull their credit find they have an inaccurate collection on their credit or even worse been a victim of identity theft. Others have thought the bank worked a certain way on income to find out the rules had changed. This setback could be temporary, but would prevent a contract until resolved.

I know there is an urge to just rush out and start looking at homes before going through the process of getting a pre-approval. As a buyer what should be understood is that you are about to purchase what would very likely be the largest purchase you have. There is a process that if followed will lead to a much smoother transaction.