10 - You don't want the big let down if you can't get approved after you got your heart set on purchasing a property
9 - If there are errors on your credit report you will have time to get it fixed
8 - You will save energy, time and money
7 - Your odds of working with a great Realtor are better (many Realtors don't even show without a Pre-Approval!)
6 - You will be looking at homes in the right price range
5 - You will have a good understanding of current market rates and a monthly payment when your lender gives you a GFE (good faith estimate)
4 - You will know how much money you need to come up with for a down payment
3 - You will know where your comfort zone is and feel confident when you submit your offer
2 - Many REO (bank owned, foreclosure) sellers will not even accept an offer without a pre-approval letter (most the time from a direct lender)
1 - The Seller will look at your offer to see that it is strong so odds of approval are higher
Underwriting guidelines have changed majorly over the last two years. Many cannot qualify. Lots can qualify and they don't even realize it. It never hurts to see if you can qualify for a home.
Condos have become pretty much unfinanceable due to recent underwriting guideline changes. Underwriters are not only looking at litigation but they are looking at investor concentration in the subdivision and HOA defaults within the subdivision after they order something called a "condo certification." A condo certification is basically a questionnaire so the lender can balance risk.
If you are a lender in the Las Vegas area and have successfully closed more than 5 VERIFIABLE transactions since March 1, 2009, near conforming rates and closing fees: feel free to call or email me for an interview!
How about a number eleven... Renee is highly skilled and does not want to waste your time or hers.
Renee - the flip side of this is that sellers should have their home appraised before putting it on the market.
Ryan: Did that bleed throughout the entire post. No my entire team will not work with an unapproved or unqualified buyer!
Sharon: BUENO!
Hi Renee, I am having difficulty with appraisals on non REO's and I was about to suggest that all seller's get an appraisal to see if they even want to mess with market. This past week I sold two non-REO homes and helped one of the seller's buy a replacement. All 3 escrows are falling out. Had multiple offers on both the listings and both sets of buyers had offered full price. Both properties fully upgraded.
Sharon beat me to the recommendation. Back to the drawing board.
William: You should go read Broker Bryant's post about appraisals in a declining market. I have a major comment on there! We do pretty comprehensive CMAs for our buyers to make sure the home they like is going to appraise. We had a buyer submit 7 letters of intent on new construction based on CMA. They said no because it will kill their "in house appraiser trying to appraise the homes they already have in escrow." Nothing has closed in that sub since November so I don't know what kind of racket they have going on with their lender and appraiser. I didn't think that kind of stuff would wash in this market!
OH WELL! Check out this post. Lots of crazy stuff going on with appraisals.
Renee
All 10 valid and great points.
Tom
Wish I could reblog this great post. It applies just as well to anyone's market.
"7 - Your odds of working with a great Realtor are better (many Realtors don't even show without a Pre-Approval" This is me. Showing homes without a approval is not productive for buyer. If they are tire kickers...I will refer them to a different agent.
Tom: Why thank you!
Ann: I will open it up for reblogging. I don't like it because it sandbags my SEO but my buyer's agents are going to start to reblog so it can roll through twitter and facebook so there you have it ;)
Mark: Thank you! Not enough hours in the day to do what we need to do. Plenty of approved buyers and I haven't heard one compelling argument on why I should work with an unapproved buyer!
Renee, this is an excellent post and I think I will do something like this for Austin! BTW, I have enjoyed following your adventures on Face Book! Have a great weekend!
Renee.... very good post, especially # 2. What scares me, are there actually realtors showing houses without a pre-qual letter? In any case, it truly ticks me off when a borrower calls me up last minute that has put an offer in, and now wants to go over the mortgage stuff. This shouldn't be like buying a car. They should research first, get the info, see what the payment is and what they would need. It's not a quick process and can turn out to be hell if they pick the wrong loan officer that will give them what they want to hear. I am getting 1 to 2 e-mails or phone calls a week now, those that have spoken to 2 to 3 loan officers and were given the wrong info. Or those that went and applied with someone, who made guarantees and promises, and now were told they are denied, the day before settlement. PS... once I get my NV license, hopefully you won't have to put that statement at the bottom of your blog. ;o) And look for a blog by the end of next week from a big realtor on here who I am closing a loan for... ;o)