Why Should You Get Pre-Approved Before Starting Your Home Search?

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approval in hand

Why Should You Get Pre-Approved Before Starting Your Home Search?


As a follow-up to my last post on the difference between getting pre-qualified and pre-approved for a loan, I want to further explain why it is better for home buyers to have their pre-approval letter in hand before searching for a new home.

When getting pre-approved, you actually fill out the loan application and leave the property address blank until you choose the home you want to buy.  This provides you with a conditional loan commitment for a specific amount and has many advantages to you as a buyer.

This will save you time by focusing your home search to only those homes for which you can be confident of receiving financing.  It is so discouraging to fall in love with a home only to find out you can’t qualify for the loan.  Once your price range is established, you can fine tune your search and spend more time comparing and focusing on the merits of each property such as an updated kitchen, landscaped yard, or lake view.

Another advantage of pre-approval is the ability to move quickly once you decide on a particular home.  Since your financial information has already passed through the underwriting process, the only things that remain are related to qualifying the home.  This shortens the time to closing from 30-45 days down to 2-3 weeks.

As a buyer, all of this puts you in a much stronger position to negotiate an offer. Having your pre-approval letter demonstrates that you are a serious buyer.  It can prevent you from losing the home of your choice to another buyer that has already obtained their financing.  When a seller is moving and requires a quick closing, they will prefer the buyer that has been pre-approved.  Before a seller accepts an offer and takes their home off the market, they want to have confidence that the home will actually be sold.  A seller is more likely to accept an offer from someone who is pre-approved, even if the offering price is less than that of another buyer who is not pre-approved.

Finally, getting pre-approved gives you a better idea of your interest rate, and you may even choose to lock in that rate for a certain period of time.  Just prior to closing, the lender will also verify that your financial condition and credit worthiness have not changed; so be very cautious in your use of credit.  Once you have your pre-approval, the only remaining conditions are an inspection, acceptable appraisal, and title search. 

If you are interesting in buying a home, I am a Realtor in Brevard County, Florida, dedicated to serving with excellence, and ready to help you find your next home.


Dennis Duvernay Broker/Owner
Hillview Realty - Northbridge, MA

Good information Laura..I will show one property to a buyer at which point I make sure they get pre-approved or I send them packing....can't afford to waste time in this market.

Jan 22, 2011 08:37 AM
Christine Smith
Buyers Brokers Only LLC - - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA

Very important information & advice.  And as Dennis mentions above, it is difficult to even look without that pre-approval.

Jan 22, 2011 08:48 AM
Joetta Fort
The DiGiorgio Group - Arvada, CO
Independent Broker, Homes Denver to Boulder

Good warning for people down there near the bottom. Even once pre-approved, the lender WILL check debt levels again.

Jan 23, 2011 05:04 AM
Laura Forman
Your Brevard Premier Property Specialist

Dennis - My intent is not to turn buyers away, but to prepare them for success.

Dena - I agree.  It only makes sense to have pre-approval before looking.

Joetta - I warn people about the subsequent credit check so there will not be a last minute roadblock to qualifying.

Jan 26, 2011 02:37 PM
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

I simply will not place anyone that does not have a prequalification letter in my car! Simple as that, I am not a tour guide or a taxi service.

Jan 27, 2011 03:27 AM
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

It's always a stressful time when buyers begin to compare notes on 'what they can afford' vs. 'what they want'. It really is better to confine the viewings to homes in the first category.

Jan 27, 2011 08:02 AM