Here’s why it behooves buyers in any market to get pre-approved.
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The fundamental benefit of getting pre-approved, especially in today’s fast-paced market teeming with multiple offers, is that you know with absolute certainty that you have the funds to back a home purchase should you choose the loan-funded route.
How important is a pre-approval to the sellers in our market? As our buyer’s agent Annie put it, “If you get an offer, having [the buyer’s] pre-approval letter there just gives you a little bit more security knowing that the person who’s going to be coming into your home and taking your home off the market is backed by the bank.”
You don’t necessarily have to be pre-approved by a local lender, but you definitely have to be pre-approved by a reputable one; again, sellers weigh multiple offers by considering the likelihood of each deal closing on time and with little to no unknown variables—hiccup-free financing is just as important as offer price.
Security—not necessarily cash— is king.
Annie has seen some lenders complete the pre-approval process as quickly as 30 minutes to an hour, but she cautions that it can sometimes take lenders longer depending on what you do for work (more tax documents could be required). For example, if you’re self-employed, the pre-approval process may involve a few more steps. A typical pre-approval lasts for about 90 days for resale and 120 days for a new construction purchase. If you reach that deadline but still haven’t made any offers on a home, Annie says the best thing to do is to call your lender and simply go through the process once more.
In a multiple-offer scenario, having a pre-approval is almost as valuable as being a cash buyer; though you’re financing the purchase via loan, the seller has proof that your financial picture is what you claim. Sellers in today’s market stress about their ability to sell their current home and purchase a new one right afterward, so security—not necessarily cash— is king.
If you have further questions about the pre-approval process or anything else pertaining to the home buying experience, don’t hesitate to reach out to us by phone or email. We’d love to answer your questions and hear about your particular situation.