Why Should I Get Pre-Approved BEFORE Finding THE Home I Want?
If you’re like many clients we speak with, going through the process of getting pre-approved, having your credit pulled, and supplying documentation, seems like too much work until you find THE home you want to buy.
In a buyer’s market, where the number of sellers exceed the number of buyers, you can delay pre-approval, and in many cases write an offer and gets accepted by a seller without an accompanying pre-approval letter.
In a seller’s market (as we are seeing in 2018), where the number of buyers exceed the number of sellers, you are competing with multiple buyers and the seller will logically choose the best offer. The best offer is one that will pay them the most, can close the fastest, and is the strongest (i.e. pre-approved, maximum cash down, etc.).
In other words, today’s real estate market is a competition. As a buyer you are competing with other buyers and you want to present your offer in the best possible light.
We suggest clients compete by being more prepared, and more proactive, than any other buyer. You want to be head and shoulders above the competition by employing a winning offer strategy.
We advise clients to follow the system below:
- Go beyond pre-approval with a fully underwritten credit and income approval. Yes this is a little more work on your part, you will need to have your mortgage credit report run, supply documents, etc. BUT once an underwriter has reviewed your loan package you can close much faster because you have been underwritten and approved. In most cases, now all we need to do as the lender, is underwrite the property you are buying, thus we can close much faster.
- Present your offer with short deadlines for inspections, appraisal, financing contingencies, and closing. We can typically accommodate ten days to clear financing and appraisal deadlines and seventeen days to close.
- Have your loan officer call the listing agent and confirm you have been fully credit and income approved and that as the lender, we are prepared to move incredibly quickly.
- Present your offer with our 17 Day Close Guarantee & Earnest Money Guarantee certificate. This certificate tells the seller we are so confident in the pre-underwriting that has been done on your loan, that as the mortgage bank, we are willing to pay $250 a day to the seller if we don’t close on time, and we guarantee your earnest money in case we cannot close your loan due to a problem with financing.
We’ve found that following these 4 steps can have a drastic impact on the likelihood of your offer being accepted over the competition.
If you would like to learn more about the strategy or get moving towards full credit and income approval, we’d love to hear from you.Copyright©2017 Fairway Independent Mortgage Corporation. NMLS#2289. 4801 S. Biltmore Lane, Madison, WI 53718, 1-877-699-0353. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. Fairway is not affiliated with any government agencies. Fairway is required to disclose the following license information. Alaska Mortgage Lender License No. AK2289; Arizona Mortgage Banker License No. 0904162; CA: Licensed by the Department of Business Oversight under the Consumer Finance Lenders Law; Loans made or arranged pursuant to a California Finance Lenders Law License #262571; Illinois Residential Mortgage Licensee No. MB. 0005475; Kansas Licensed Mortgage Company. KS License #MC.0001375; MA Mortgage Broker and Lender License #MC2289"; Minnesota: MN-MO- MN-MO-20183136. This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat. Section 47.206 (3) and (4); Mississippi Licensed Mortgage Company; Licensed by the New Hampshire Banking Department Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker-NYS Department of Financial Services; OH MBA License #2289; Oregon Mortgage Lender License ML-3791; Rhode Island Licensed Broker & Lender; VA: NMLS ID # 2289; Washington Consumer Loan Company License No. CL-2289.