Why getting pre-approved is so critical for buyers in this hot market.

This market is so competitive that talking to a lender up front is essential. Many of my agents’ buyers are losing out because they didn’t take the 15 minutes beforehand to start the pre-approval process. When you talk to a lender, you can either get pre-approved or pre-qualified, so today I wanted to talk about the differences between the two.

Being pre-approved is when you’ve talked to a lender and provided your financial documentation. That includes tax records, pay stubs, and everything else you might need to get fully approved and ready to buy a home.

Being pre-qualified just means that you’ve told them about your finances. They will probably run your credit too. It’s not nearly as strong as being pre-approved, and sellers are paying attention to this fact in our market.

“Do the work and get pre-approved up front.”

Even if your offer is accepted without being pre-approved, you’re still behind the ball. The lender has to fully approve you before they order your appraisal. If the process takes a while, you could pass your contingency dates. The seller doesn’t have to grant you an extension; they might already have a backup offer. You could lose your dream home in escrow because you weren’t prepared.

Don’t window shop in this market. Take 15 minutes to give the lender your paperwork and get pre-approved. Getting pre-qualified might be a good way to get started, but make sure you prepare the necessary documentation and get set up to be pre-approved.

The Federal Reserve came out again and said rates will go up six more times this year alone, so your affordability will continue to drop. Even if you get pre-qualified right now, you may need to get qualified again as rates change. However, it’s still worth it to get qualified now. You might have to work on something to improve your credit, like paying off a card, settling a dispute, or getting a letter from the IRS.

You can get a home in this market. Our agents are helping buyers do it all the time; you just have to take 15 minutes up front and be ready to rock when the time comes. If you have any questions, feel free to call or email me. I’d love to help.