Why Getting a Pre-Approval Matters When Buying a Home

So, really, getting a pre-approval matters when buying a home?

Well read on, you’re in the market for a new home. The internet has been browsed, costs have been weighed, and the decision to start home shopping is official. Your realtor promptly schedules you for a slew of showings.

But wait. There’s a step to take before you begin: get a pre-approval.

While it may seem unnecessary to get pre-approved before even selecting a home, doing so will give you the leverage you need to really be a competitor in the market. So, pause, take a step back and read the three reasons why should absolutely get a pre-approval.

Not 1. Getting Pre-Approval Could Rob You of Your Dream Home

We’ve all seen how auctions go down. There’s a super speedy auctioneer rattling off prices and acknowledging hand gestures, and before you know it that antique desk you wanted just sold before you even had a chance to raise your hand. Sometimes the housing market can feel a lot like this fast-paced environment. But having a pre-approval shows the seller of your dream home (and your realtor) that not only are you a serious buyer, but you’re motivated to get some of the early legwork done involved in the approval process. Getting your pre-approval is like having your auction paddle prepared to raise and beat other competitors as soon as you’re ready.

Furthermore, pre-approvals can sometimes give you an upper hand in negotiating. Even if you offer a lower asking price – but are pre-approved – buyers will sometimes even go with the lower bid because it shows a level of responsibility and reliability, reassuring them that financing won’t fall through later in the buying process.

2. Gets Rid of False Hope of Buying a Home

Ever go to the store to buy some apples, quickly snag them from the shelf, only to realize those organic, pesticide-free, eco-friendly, sustainably grown, cage-free apples are about triple the cost you thought they were? Now you’re faced with the awkward decision at the cash register of shelling out the unexpected cash or embarrassingly telling the cashier to set it aside.

Don’t let this happen with your dream home.

It’s not uncommon – especially for first time buyers – to be blissfully unaware of problems with their credit score. These “problems” could be a lower credit score then they initially perceived (which affects your financing amount) as well as actual errors on your credit report. These aren’t so much problems with the buyer as they are errors within your credit reporting that need fixing through letters and phone calls – which can take weeks to months to fix! Getting pre-approved will help illuminate these problems as well as give you time to fix any issues before you step into your dream home – and maybe get a welcoming fruit basic of organic cage-free apples from your neighbors.

3. Get the Real Payment Scenario

Another common mistake from buyers is not realizing just how much they are able to pay for a home. The pre-approval process – which takes into account your income, current debt, and plausibility of sustaining employment – gives you a safe and reasonable gauge for purchasing and looking at homes. Once you know how much you can actually be financed for, then you can happily and confidently begin looking at homes within your range instead of excitedly stepping into George Strait’s former cabin and being disgruntled when you can’t afford the payments on a 3-million-dollar home.

Also, there are a lot of associated costs involved in purchasing a home. Beyond that hopeful large down payment and the inspection costs, there is typically a year of real estate taxes to be paid, homeowners insurance, and other miscellaneous costs that creep into the process. Getting pre-approved gives you a realistic gauge on what type of home you can afford that includes these impending costs.

Bottom line: getting pre-approved is a necessary and crucial step in the home buying experience. It helps rid your credit score of problems, builds your credibility to sellers, provides some negotiating power, and gives you a good judge on what type of home you can afford. All the signs point to getting pre-approved – unless you just enjoy being that unprepared shopper with the overpriced apples at the register. Then, by all means, go on and schedule a showing at George’s ole place.

Is all of this just a head-ache? Reach out to any of our qualified buyer specialists to help you find YOUR Nm Dream House today!