Buyers frequently ask me how they can make themselves stand out from their competition when making an offer on a home. This is especially important during times when the market leans more toward the seller’s side than the buyer’s. What I always tell my buyers is to get a letter of pre-approval and here’s why.
1You’ll know your home shopping price. Though you might think you have a pretty good idea as to how much you can borrow, you’ll find out exactly how much with a letter of pre-approval. Your lender will put things into perspective quickly by evaluating factors such as adjustable interest rates, mortgage insurance, property taxes, down payment percentage, and so on.
2You’ll gain more leverage. A letter of pre-approval will give you more leverage with multiple-offers and counter-offers. The seller will feel more secure in negotiating with you because they’ll know you’re qualified to obtain the financing needed to close.
3You’ll get better help from your agent. A letter of pre-approval will also help your real estate agent to work better for you. They’ll be able to search better to match your specific needs.
4You won’t waste time with showings. Many sellers – and not just ones of luxury properties – won’t even make appointments to show their homes or accept offers without pre-approval letters.
There are a couple of other points you should be aware of regarding letters of pre-approval:
- Be sure you have a pre-approval letter, and not a pre-qualification letter. Calling up a lender, giving some financial information, and then obtaining a letter without any verification or documentation is a waste of your time.
- Pre-approval letters are time-sensitive. Many are good for only 60 days. You should be extra careful with your credit spending and payments, in case you need to obtain another letter.
Remember, a letter of pre-approval demonstrates your strong financial position and commitment to closing a deal as quickly and smoothly as possible. Don’t go house hunting without one!
If you’re looking to buy or sell a house in
the Albuquerque area, contact me today!
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