Pre-Approved? I'll do That After I Find the House I Want.

I had a phone call the other day from a young lady who was interested in looking at a house.  I was happy to make an appointment for her, but wanted to ask a few questions just to get an idea of what her thoughts were on the home buying process.  I asked the basic questions like:  When do you wish to move in?  Do you have to sell the house you are in first? etc.  Then, I asked if she had met with a lender yet to find out how much she could qualify for...she answered:  I'll get pre-approved after I find the house I want.  After all, if I don't see anything I like, why be pre-approved."

Here are some of my responses to people who do not want to get pre-approved:

1. Being pre-approved will help you know what type of down payment you will need as well as the closing costs that will be involved.  This will really help you when making an offer on that house that you fall in love with.  You and your agent will know how to structure your offer so that you will be more likely to get that home you so love!
2. One of the first things the seller is going to ask his agent when your offer comes in is going to be "Is the buyer pre-approved"?  Before a seller is willing to start negotiations, he or she is going to want to make sure the buyer is going to be able to buy his house.  If, in the end, all the negotiations are finalized only to find out the buyer cannot buy, one party is embarrassed and the other is angry.
3. Being pre-approved helps you know what price range to be looking in.  If you fall in love with a $150,000 home and then find out that you can only be approved for $130,000, you are going to be very disappointed and we don't want you to fall into that situation.
4. Sometimes what you are pre-approved is for much less than what you thought you could buy and it may make you decide to wait.  Other times, you may find out that you qualify for much more than you thought and it changes your who outlook on what homes to look at.
5. If you are involved in a multiple offer situation and everyone else has submitted their pre-approval letters, the seller is not going to wait for you to get pre-approved.  He or she will simply thank you for your offer and then consider all the ones that came with pre-approval letters.

In the end, it does not hurt you to get pre-approved.  A pre-approval definitely gives you the confidence that your offer will be seriously looked at and hopefully accepted.