Why must a homebuyer be pre-approved before going to look at a home?
Why do we require people to get pre-approved before we show them homes?
There are several different reasons for this requirement. For one, do you truly know how much you can buy? With the internet, it’s easy for most consumers to educate themselves about the market and get an idea of what they might be able to afford. However, you might be wrong. You might forget to factor in points on the loan, origination fees, insurance and taxes on the property, and more. If you leave out those factors, that will impact what you can afford. There’s nothing worse than falling in love with a home only to later find out that you can’t afford it.
If you’re not able or motivated to buy right now, we recommend going to an open house.
On the flip side, we find that consumers are often pleasantly surprised at how much they can afford when they are pre-approved before home shopping. A buyer who had been looking at $250,000 properties might learn that they could be looking at $350,000 properties, for example.
Another reason we require pre-approval is that real estate agents aren’t paid for showing homes. So if you’re not able or motivated to buy right now, we recommend going to an open house. You may meet an agent and lender you like who will push you to the next step of getting pre-approved and going out to look at homes that you know you can afford and that you’re ready to purchase.
The bottom line is that pre-approval lets you know what you can afford, and it communicates to the seller that you’re ready to move forward. That is especially important in a market where multiple offers are so common; a pre-approved buyer will appeal to sellers much more than a buyer who doesn’t yet know if they’re even able to buy the house.
If you have questions about this topic or anything else to do with real estate, don’t hesitate to reach out to us. If we use your question to make a video for our blog, we’ll send you a $25 Starbucks gift card. Hope to hear from you soon!