When Buying a Los Angeles Home Good Credit is Not Enough

Real Estate Broker/Owner with Home Jane Realty BRE# 01439865

If you are considering buying a home in Los Angeles please don’t think we agents are being difficult when we tell you there is no point in starting the process until you have spoken to a lender.

This is not personal.  YOU CANNOT MAKE AN OFFER ON ANY HOUSE WITHOUT A LETTER FROM YOUR LENDER.  Or if you are paying cash, without showing that you have the funds in place.When Buying a Los Angeles Home You Need More than Good Credit

You may have the best credit out there, which is good.  You may have way more money in the bank than you need.  Great. Someone may be helping you with the purchase wonderful.  But your offer is not going to be considered unless the seller and his or her agent sees that lender letter.

Why? you ask.

Getting a loan when buying a home in Los Angeles is not a slam dunk. You will be surprised to learn what can surface during the approval process.  Maybe your credit took a hit for a reason unknown to you.  A collection you didn’t know about.  Or you might recently have made a purchase which knocked your score down a little.  You may not be able to get your hands on needed paperwork in a prompt manner.  There are lot of things that can go wrong.  There are also things that can go right, and maybe you can afford more house than you thought.

Brenda Mullen compared getting a home loan with getting a car loan.  They are miles apart.  When you are buying a car, the salesman is going to do everything in his power to get you into one and then get you the loan.  When buying a home the reverse is true.  You are not getting that house without that pre-approval.  Some agents even require that the loan is underwritten before they will accept an offer.  This is a little overkill but it stresses the point of the importance of having everything in place.  Too many deals have fallen through because the funding was not approved.

So, when buying a Los Angeles home,  please know that when your real estate agents tells you they are not going to take you out until you have that lender letter in place, they are working with you, not against you.

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Gary Poppens
Keller Williams Sioux Falls - Sioux Falls, SD

Very good blog, that's something we do here in the Midwest also, I don't even show homes if they don't have a preapproval letter.

Sep 14, 2012 02:08 AM #1
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

For some reason, I thought this was standard procedure in all areas.  Why waste time showing houses if you don't even know they're approved for a loan?

Sep 14, 2012 02:27 AM #2
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

Jane, i love your strain of posts here on credit & what some buyers still do not understand...

Sep 14, 2012 04:05 AM #3
Patty Da Silva, Davie, Southwest Ranches Cooper City, Plantation, Weston, REALTOR
BROKER of Green Realty Properties® - 954-667-7253 - Davie, FL
Top Listing Broker

Thank you! We get so much resistance from Buyers, and we try to explain to them that we're helping. What's the point of looking at homes if you don't know for sure thaht you can afford them?

Sep 14, 2012 04:19 AM #4
Shannon Milligan, Richmond VA Real Estate Agent/Associate Broker
RVA Home Team - Richmond, VA
RVA Home Team - Winning with Integrity.

Having that pre-approval in place is so very important and keeps heartbreak in check. Nothing worse to find your dream home and then not be able to have it.

Sep 14, 2012 04:32 AM #5
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

I tell the prospects what is involved with a pre-approval (no cost, minimal time commitment, can be done on weekends). If they are not interested, then they need to find a more gullible agent.

Sep 14, 2012 08:23 AM #6
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Gary, that is probably a good thing to do.

Roger,  they often don't realize how difficult the process is.

Ginny,  thanks.  And yes many still don't.

Patty,  I know.  It is a hard sell, but it is necessary.

Shannon,  exactly right

Doug,  or desperate?

Sep 14, 2012 12:00 PM #7
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Car lots have lots of cars or they can get them easily. Right now, there are not lots of homes. That also makes a HUGE difference.

Sep 14, 2012 01:01 PM #8
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Melissa,  that's a great point.

Sep 14, 2012 01:07 PM #9
Juli Vosmik
Dominion Fine Properties - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Jane, great blog.  Why put the cart before the horse?  Things have changed so much when buying real estate. Your advise for home buyers in Los Angeles is appropriate for home buyers everywhere. 

Sep 14, 2012 02:22 PM #10
Laura Allen, Lake Tahoe - Truckee Real Estate for Sale www.TahoeLauraLuxuryHomes.com
Coldwell Banker, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Jane - "Show me the money" has never been a more true statement than it is today!  Great information for Los Angeles Buyers!

Sep 14, 2012 04:00 PM #11
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

Juli,  I would imagine it is standard all over. Especially with the shortage of inventory and mulitple offer situations.

Laura,  "show me the money".  I love it.

Sep 14, 2012 04:13 PM #12
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