Pre-qualification

    Pre-qualification

    Jan 08, 2020

    One step in purchasing a home that is vital to accomplish at the very beginning is to get with a lender and get pre-qualified for a mortgage.

    First, it helps you know what to look at. It gives you a maximum price goal, so that you are only considering and viewing homes your financial situation will allow you to purchase. This is arguably the most important thing you need to know getting started. We've met many clients who "fell in love" with a home they could not afford, and later, when looking at homes they could buy, nothing made them happy. Unrequited love is tough enough when the subject matter is another human being. When it occurs with a house, it can be super frustrating.

    Next, it improves your bargaining position when you make an offer. The seller of the home you want to buy needs to know you have the means to purchase their home when you make an offer. It's a much stronger position than putting in an offer with no indication to the seller you can actually buy. Pre-qualification makes a seller more willing to essentially take the home off the market. It encourages them to negotiate with you, which gives you a better chance at making the best deal you can.

    Finally, pre-qualifying takes your home purchase from the dream stage to the stage of reality. Until you have the ball rolling on your financing, you are not getting any closer to owning and moving into your next home. Looking at dozens of homes before you know your price point is, well, pointless. The reality is, in our market, in any price range, it's the most competitive 1 or 2 homes, in terms of price and appeal, most buyers will be attracted to. If the other buyer is ready to put in an offer with an assurance to the seller that they can buy, and you can't, that other buyer is likely going to get that home under contract, while you are backtracking to get your financing lined up. You don't want to get into a gunfight until you are ready to pull the trigger.