In today’s market, it’s crucial to go into your homebuying journey prepared. Certain steps, like understanding the local market you’re searching in and identifying your unique goals and needs with a real estate advisor, are important to take before jumping into the market and beginning your search. But when you’re ready to get serious about purchasing a home, and you want sellers to recognize that you’re committed to making a purchase, a mortgage preapproval is an invaluable tool to have under your belt.
Obtaining preapproval shows sellers that you’re serious about purchasing their home. It doesn’t require too much work on your part (other than collecting the necessary documents and meeting with a lender), but it does indicate that you’re not only ready to purchase a home, but you’re ready to purchase a home soon, as preapprovals typically expire after two to three months.
Preapprovals aren’t just to appeal to sellers, they’re incredibly helpful when figuring out your finances and how much you’ll be able to borrow. Although most savvy buyers aren’t going into the process completely unaware of their finances, it helps for a professional third party to give you a solid number for you to work with as you begin to reconcile what you want in a home with what type of home you can afford. You might find after receiving your preapproval that you can now look in a neighborhood that you weren’t previously sure you would have the funds to purchase in, or you might find that your preapproval has opened your eyes to certain necessary concessions. Either way, it’s always best to know the reality of your situation and adapt accordingly.
Sellers want a buyer that they know won’t fall through. A preapproval not only opens the door to negotiations, but it also gives you some bargaining power as a seller would rather enter the process with someone who will definitely have the necessary funds versus someone who may or may not or will know at a later date just how much they’ll receive from a lender. Plus, if a seller is in a hurry or on a tight timeline to sell their home, having your preapproval completed previously will ensure a speedier process.
As always, a trusted broker will be able to guide you through this process and more. If you’re ready to begin your buying or selling journey, reach out to us today to ensure you have a savvy and strategic advisor on your side.