I wish I could say there was a hard and fast rule on this. Candidly, I wish there were a law requiring a pre-approval before setting foot in a house.
But until that happens, I have to answer this question in the way that I have had to start in most of these articles.
And so….”again”…it depends. …(As it turns out, the practice of Real Estate exists in a swirly pool of murky gray areas.)
There’s no “legal” requirement for you to have a pre-approval before seeing a house….yet. 🙂 But many agents (the good ones in particular) will insist on it. The reasons are 4 fold:
First: For as much as people “think” they know what they can spend, experience shows that they really have absolutely NO CLUE. Like…NONE…NADA. People who think they can spend $500k can only get $400k. People who think they can’t get $150k qualify for $275k. Virtually EVERYONE comes back surprised at the numbers. Both in terms of available loan programs, down money, and interest rates. Knowing saves everyone a ton of time. There’s NOTHING worse than falling in love with the $400k price range and then hating your options when you find out that $375k is your max. There’s also little more frustrating than looking at a bunch of homes at $200k only to find out you can go to $250k and start shopping ALL OVER in a new price range. Getting a pre-approval to find out costs you NOTHING but a phone call and a few minutes on the phone. They generally are good for 90 days. There is NO reason not to get one and they ‘barely’ touch your credit score, so that’s not a valid excuse. Odds are extremely low that a credit pull for a pre-approval will lower the rate you qualify for. So help yourself and your agent out and get an approval.
Second: Nice houses go FAST. REALLY fast….no matter the market. If you happen to find that once-in-a-lifetime house and then lose it because someone else got their offer accepted while you were fooling around with a last minute pre-approval, you’re going to have regret sandwiches for dinner every night for a month. If you think you’re going to get a loan officer on the phone at 6pm on a Saturday evening when you’re considering writing an offer, you’re apt to be sorely disappointed. While it can happen, it’s just as likely that they’ll be off duty and you’ll be force to work with some random person you found online. That ‘can’ work out, but it’s just as likely to be a disaster. Experience shows that the tried and true local expert is going to give you the best chance at making it to the settlement table with a smile on your face.
Third: In most cases, we don’t know you. Realtors are some of the most prayed upon professionals in the country because we routinely meet with total strangers we met online in empty homes at bizarre times of the day when there is seldom anyone else around. Running a pre-approval gives us a measure of safety and security because we know we’re not likely to get an axe murderer to agree to a credit check and verification of ID. So help an agent avoid an ulcer. Get a pre-approval for everyone’s peace of mind.
Fourth: Again….In most cases, we don’t know you. Yet we have a responsibility to take reasonable precautions to protect the properties we walk prospective clients through. The sellers of those homes look to us to make sure that we’re bringing qualified buyers through their homes and among their life treasures. It’s impossible to tell a qualified buyer from someone who is walking through with the intent of stealing the prescription meds from the bathroom cabinets. UNLESS…we have a pre-approval. Thieves don’t like to have their credit run before they plunder a house. So please….GET A PRE-APPROVAL!!! without one the agent is going to be on you like white on rice to make sure you’re not making off with the family jewels.
There you have it! It’s fast, easy, low impact, helpful in a bind, gives you an excellent alibi, protects your personal space, and is socially responsible ,,,,to get a pre-approval before you shop.
Are you thinking about buying a home in the next 90 days? Your pre-approval is just a phone call away. Drop us a line and tell us your plans. We can set you up with a great local lender who can make the whole process a breeze.