I just wanted to take this opportunity to reiterate a point I have brought up time and time again. If you are planning on buying a home, bank owned or not, your first order of business is to get preapproved. If you do not take the time to complete this essential step, you are setting yourself up for failure. Why go to all the trouble of finding a property, writing it up and getting your offer accepted, only to have your hopes dashed before your eyes? I know I have addressed this before, several times, but I think it is worthwhile to revisit the subject.
Being preapproved gives you instant credibility with a seller. When you present your offer to the seller, accompanied by a preapproval letter, it automatically lets the seller know that you are a buyer to be taken seriously. It also lets the seller know that you have taken the time to make sure you can actually purchase the property. I would never counsel a seller to accept an offer from someone who was not preapproved.
Being preapproved gives you the ability to move quickly when a property you want to buy comes on the market. Currently, in the Big Bear market, there are a great many buyers looking for a great buy. When one comes on the market, there can be many buyers making on offer on it. If you are preapproved and ready to buy, many times you can get in before the property gets noticed and buy it before anybody else has a chance to make a move. If you need to wait a few days to get preapproved, you have lost your advantage and will most likely have to get into a bidding war.
Being preapproved lets you know exactly how much of a house you can purchase. This can save you from wasting time looking at homes you can't buy. I can't tell you how many times I have been told by a buyer " Don't worry, my credit is excellent and I can buy this house with no problem", only to find out they actually cannot buy the home because it is out of their price range or they have too high of a debt to income ratio. Knowing your limits is a very valuable thing in looking for a home that is going to be a good fit for you.
Lastly, being preapproved is required to purchase a bank owned property. That's right. If you are not preapproved, a bank will not even consider your offer. If an offer is not accompanied by the preapproval letter, the asset manager won't even open it. Since most of the best buys on the market are bank owned homes, it only makes sense to position yourself to be able to purchase one. It takes a little effort, but it will make your home buying experience a much happier one.
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