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Why Do I need to be Pre-Approved before you start showing me homes?

By Endre Barath, Jr.

Real Estate Agent with Berkshire Hathaway HomeServices California Properties 01238708

January 25, 2011 10:37 AM

There are many first time buyers out there who have asked me this question. I constantly have to educate them about this question. My answer is very clear to the buyers:

•1. The issue is I want them to be sure, that they are in a position to 'buy' the particular home they found and like.

•2. I want to be sure that they are searching in the price point they can actually buy.

•3. I do not want them to miss out on a home they loved, but were unable to get because they did not have the Pre-Approval Letter to submit with their offer.

•4. Then my own selfish reason: I do not want to waste my time and gas with lookers who cannot qualify to buy anything due to bad credit or the bank's more restrictive underwriting rules.

•5. Sellers and their agents do not want to accept offers from potential buyers who are not in a position to buy; hence they might miss out on a Ready & Able buyer. They will not accept an offer without Pre-Approval from a reputable lending institution.

These are the most pertinent reasons why I expect a pre-approval letter from a buyer. If they do not have this, I always encourage them to do this and if they need a reputable lender I refer them to one.

In the mean time I set up a search program in the Multiple Listing Service a bit higher and a bit lower in what they think is their price point; hence they can get a feel for what the market is like. How is the inventory? What they can get for the various price ranges as well as the difference between certain neighborhoods? Ultimately once the Pre-Approval is done they are better educated on the inventory and when a property comes in their price & liking we can see it and submit a solid & strong offer.

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 (USA) or email me at homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations

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Alexsandra Stewart

Remax equity group - Portland, OR

Broker - Portland Oregon Real Estate

Endre - good post. It's a question that gets asked all the time by buyers -- and all the points are valid for them to pay attention to.

Jan 25, 2011 02:56 PM

Joni Bailey

101 Main St. Realty - Huntsville, TX

Your Huntsville / Lake Livingston Area REALTOR®

So that you don't fall absolutely head over heels in love with something outside of yoru price range and then NOTHING else will compare! 0:O)

Jan 25, 2011 04:22 PM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

Endre - Very well laid out and explained! It just amazes me the prospective buyers that still don't "get it".

Jan 25, 2011 04:29 PM

Endre Barath, Jr.

Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA

Realtor - Los Angeles Home Sales 310.486.1002

Alexsandra, thank you for contributing to the post, hope you are well and to your success in 2011:))

Jan 25, 2011 05:57 PM

Joni, well said, I hate it when the budget blows out the desirability:))

Jan 25, 2011 05:58 PM

Donne, unfortunately new buyers are not at the place we are, hence we have to constantly be vigilant and re-explain the same important message.

Jan 25, 2011 05:59 PM

Craig Snead

Quality Home Investments, LLC / Dearborn Heights, MI - Dearborn Heights, MI

Real Estate Investor

Endre, first time home buyers need to know that there is a BIG difference between "pre-qualified" and "pre-approved"

Jan 26, 2011 01:46 AM

Craig, thank you for adding to the conversation, you are absolutely correct about the 'need' and 'the difference'

Jan 26, 2011 05:39 AM

Elyse Berman, PA

LoKation Real Estate - Boca Raton, FL

Boca Raton FL (561) 716-7824

Endre, This is a good post outlining point by point for consumers. Definitely worth a reblog!

Jan 28, 2011 01:44 PM

Pam Jank

Coldwell Banker Schneidmiller Realty - Coeur d'Alene, ID

Your Coeur d'Alene & North Idaho Real Estate Pro

Craig, Great post! I always request my Buyers get their Pre-Qualification Letter first. Your Top 4 reasons are ones I give. The main reason I give.... I don't want to take them out and show them properties they may not actually end up qualifying for. I.e., we look at $200K homes and then find out they can't purchase over $170K. Now there won't be a $170K home that will make them happy because they fell in love with amenities and locations of the $200K ones....

Jan 30, 2011 04:25 PM

Pam, Thanks for stoping by, great points to the discussion.

Jan 30, 2011 05:46 PM

Why Do I need to be Pre-Approved before you start showing me homes?

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