Home Inspections and Home Warranties Buying a new home can be stressful. Between pulling finances together, searching for and viewing homes, packing, cleaning and everything else involved, you
The Importance of Prequalification When Buying a Home
Dated: June 2 2020
Prequalification is possibly the most likely step for home buyers to skip when they start shopping for a home. Maybe it seems tedious, invasive, or just unnecessary so early in the process, or maybe people think they know how much they can afford. Many would be surprised to find out that they can afford a great deal more or less than they thought and are starting off their home search on the wrong foot.
Most people start off their home search the same way, browsing multiple different websites one weekend for homes and not too long after, you’re in love with the “perfect home”! You scramble to find the agent’s name and phone number, or reach out to an agent you know and think to yourself, “I need to go see this house right away, before anyone else gets it!” You LOVE the house, and you’re ready to put in a GREAT offer, so you submit an offer for full price! You have to be the winning offer, right!? Well, there are more that goes into accepting an offer than you might think, especially in a market where inventory is low and demand is high, and growing.
Most listing agents (the good ones anyway) will have a longer list of items they will want to see when accepting an offer. The first item, you guessed it, a prequalification letter. Many agents won’t even accept offers on behalf of their clients without one. The reason? It shows a small sign of commitment. A small sign that you’re serious about buying a home. You have, at the very least, began to prove that you can afford this home. The seller feels a little more confident accepting your offer with a letter from a reputable lender. Some other items of concern for a seller are seller paid closing costs, special stipulations and requests on the offer, and contingencies like having a home to sell. These are all things that can delay their sale and cut into their profit. Having the winning offer is not always about the highest dollar amount, but the cleanest offer with the least amount of headaches for the seller.
Another key point about prequalification is that it is a great opportunity for you to get a preview of your financial footprint. Some find credit issues and other problems they didn’t know about during the prequalification process. In most cases, these items can be cleared up quickly and easily, before it’s time to make an offer on a home.
You may also find that many real estate professionals require a prequalification letter before they will show you any homes. The reason? Every real estate professional has a story about the buyer they showed 20+ homes to and when the time came to pull the trigger, they found out they weren’t qualified, or qualified enough for the house they wanted. It’s usually the newer, less experienced agent that will run all over the place showing homes to a buyer who’s not yet qualified. You’re going to want to work with a more experienced agent, especially if you’re in a buy/sell scenario, multiple offer situation or a tough buyer’s market. Experience can provide you with a strategic advantage over other buyer’s and that’s what you want an agent for right?
In any case, the housing market is tough sometimes, and in Georgia, most sellers pay the commissions for all agents in the transaction. So why would you go into the market alone?
We hope you find this information helpful. If you have any questions we can answer in more detail, please contact us through our website at www.northpauldingliving.com and one of our local expert Realtors will respond quickly!
Prior to his real estate career, Geoff spent nearly 25 years in the retail Grocery industry, most recently as a Store Manager with Publix Supermarkets, Inc. His ability to manage diverse people, syste....
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Prequalification is possibly the most likely step for home buyers to skip when they start shopping for a home. Maybe it seems tedious, invasive, or just unnecessary so early in the process, or maybe