Wait...What? No Pre-Approval Letter?

I, like most good Realtors in Sarasota, Florida, spend most of my time either searching for homes for my buyers in MLS, setting up showing appointments and driving them around looking at homes. That’s my job and it is very time intensive. So one of my first questions to a potential buyer who will be getting a mortgage is: “Have you gotten a pre-approval from a bank or mortgage broker?” Why is this so important? Getting pre-approved for a home loan before you start looking at houses — and certainly before you make any offers — can make your life much easier. You’ll know how much money mortgage lenders will give you and you won’t waste time touring houses you can’t afford or making an offer on a house that you can’t back up. 

I can't tell you how often I am contacted by a potential buyer who wants to look at homes, yet they have no idea if they are even qualified to purchase. This is the classic case of the "cart before the horse". If you haven't been pre-approved, you're home shopping in the dark without a flashlight. You may be looking in a price range that you cannot afford. Or…you may be able to afford much more than you think!

It is a well known fact that few listing agents will risk taking their listing off of the market unless they are convinced that you are fully qualified to make the purchase and this is especially true in a buyers market like we have in Sarasota, Florida right now. This means a lot of housing for sale could have multiple buyers considering it, and may end up starting a bidding war. You don't want to go into a transaction without pre-approval when another buyer could have that simple letter, making them a more attractive buyer to a seller. For this reason, the listing agent usually requests that a pre-approval letter is submitted with all offers. If you don't include one, your offer will most likely be rejected. If you put yourself in the seller’s shoes, an earnest money check and offer without anything supporting the qualification of the potential buyer to purchase would be a very bad risk to accept, wouldn't you agree? Especially with multiple buyers waiting in the wings.

Pre-approval typically involves pulling credit, looking at debt-to-income ratios and other financial aspects of your life. Getting on the road to mortgage-readiness could include things like paying down debt and increasing your credit score.

My advice: get in touch with a lender right away and get pre-approved before shopping for homes! If you're out looking for homes - either on the road in real life or on the internet with sites like RE/MAX.com, Homes.com or Zillow - it's a good idea to prepare yourself for getting a mortgage well in advance. I will walk you through the process and then we can hit the road and find the perfect home for you in Sarasota, Florida!