• Cache Nies

Why Should You Get Pre-Approved?

Updated: Sep 22, 2021

You may have been told that it’s important to get pre-approved at the beginning of the homebuying process, but what does that really mean, and why is it so important? Now even more than ever a STRONG pre-approval can be the difference between you placing the winning offer, and losing out. See with rising home prices and high buyer competition, it’s crucial to have a clear understanding of your budget so you stand out to sellers as a serious homebuyer.

Being intentional and competitive are MUSTS when buying a home right now. Pre-approval from a lender (AKA-Cache) is the only way to know your true price range and how much money you can borrow for your loan. Just as important, being able to present a pre-approval letter shows sellers you’re a qualified buyer, something that can really help you land your dream home in an ultra-competitive market.

With limited housing inventory, and low interest rates, there are many more buyers active in the market than there are sellers, and that’s creating some serious competition. - According to the National Association of Realtors (NAR), homes are receiving an average of 5.1 offers for sellers to consider. As a result, bidding wars are more and more common. Pre-approval gives you an advantage if you get into a multiple-offer scenario, and these days, it’s likely you will. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war. With about 25% or more (depending on your geographic area) being cash deals, this is more important than ever to show sellers you can put your money where you mouth is.

Freddie Mac explains:

“By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.”

Every step you can take to gain an advantage as a buyer is crucial when today’s market is constantly changing. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, (once again contact Cache) so it’s important to have a team of professionals such as a loan officer and a trusted real estate agent making sure you take the right steps and can show your qualifications as a buyer when you find a home to purchase.

My team will go even one step further for you. With the cooperation of the buyer, (YOU) we can make your offer stand out AS GOOD AS CASH! How we do this is with a TBD pre-approval. What I mean by this is we we collect all initial documents (W2”s, Paystubs, ID, Bank Statements, Taxes) then submit to underwriting prior to you placing an offer. With this we get conditional approval prior to your offer getting accepted. Meaning we can shorten our loan times, and install even more confidence into our buyers. On top of this we offer a nice incentive for the seller if the loan was to close late or fall out of escrow.

Bottom Line

In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home.

- Cache Nies

- NMLS #1793984

- An Equal Housing Lender

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