One common mistake that a great deal of today’s buyers make, whether they are first time buyers or move up buyers, is not getting Pre-qualified before looking at homes. Once the decision to purchase a new home is made the excitement to look at homes can be overwhelming. Buyers simply want to go and look at the homes that are out there on the market. It is well known that inventory is very low and has been for a long time, competition for homes is fierce in most areas and multiple offers are back in a big way. All of these factors make it extremely important that homes buyers, either for the first time or to get back in the housing market, get Pre-qualified prior to looking.
The reason may not be clear to some or most home buyers. Sellers will be looking for a Pre-qualification letter from a lender with any offer that might be presented to them. An offer without such a letter could simply get set aside until one arrives and if there are multiple offers on the table you may get passed over permanently. Also, buyers may be thinking along these lines, for example, “I already know what I can afford in a payment”, or “there are plenty of mortgage calculators on the internet to determine how much home I can afford”. These are all true and very good to start off with prior to looking at homes. The thing to keep in mind is due to limited inventory and the fierce competition buyers need to be prepared to act quickly when they see the home that they want. In many markets buyers will lose out on a home or face additional competition because of a delay in needing to contact their lender to have them send over a Pre-qualification letter. Most lenders are quick to respond but it could take a day or two to get this critical part of the offer presentation. What if your lender is; on vacation, out sick, at a conference or continuing education class. There are a myriad of reasons that your lender may not be available at that particular moment in time. This could mean the difference of getting the offer in front of the sellers or losing out on the home all together.
A wise buyer will have a Pre-qualification letter “in hand” prior to looking for a home. This way, should the dream home appear in this limited inventory market a buyer can be prepared to act quickly and have a better chance to get that home and live happily ever after.
Looking forward to hearing from you, John Conca.