As agents for years we have been telling our prospective clients to speak to a mortgage provider and to get preapproved as the first step in searching for and buying a home.
Most prospective buyers know this and dutifully speak to a mortgage provider and get their preapproval for a mortgage and with this in hand then contact a Realtor to help them buy a home.
But something has happened over the last few years that no longer makes that pre-approval of any value. For the past three years, agents have been talking about the low inventory of homes for resale, as well as the lack of new construction as well. This combined with low interest rates has made it very difficult to buy a home in today's market. The low inventory, combined with low interest rates has created a very strong sellers market where there is lots of competition for homes for sale. The number of buyers has increased, and the seller can pick the cream of the crop.
Buyers are frustrated as they make an offer only to discover there are multiple offers, sometimes as many as twelve or more on the property they want to buy. Agents are telling them they will need to offer well over the asking price. Some buyers are getting help from parents, or some have sold their previous home and have cash. That pre-approval is no longer as valuable as it once was. Buyers are finding they are losing out many times over.
So, what can you do? Prosperity Mortgage, owned by Long & Foster Real Estate, offers clients the chance to get fully approved for a mortgage barring the appraisal on the house. The buyer has a full commitment from the mortgage company and can make an offer with a shorter time line to settlement as all the underwriting has been completed, barring the appraisal. It allows a buyer to be in a stronger position, potentially waiving the mortgage contingency making them as good as a cash buyer.
It does require the buyer to supply all the documentation ahead of time, and if the home search takes time, it will need to be updated along the way, but it puts you as a buyer in a much stronger position to have your offer accepted.
So, in today's market, go the extra mile and get yourself fully approved, and obtain a full commitment from your mortgage provider. If your mortgage provider doesn't provide this, contact Nick Vandekar, Selling the Main Line with Long & Foster Real Estate Inc. office 610-225-7400, cell or text 610-203-4543, Nick@VandekarTeam.com, let's get you ready to have your offer accepted and find that dream home.