Are pre-approvals that important?

Are pre-approvals that important?

Dear Phyllis,

Out of the blue, I went to an open house over the weekend and really liked the home. I phoned my Realtor and told her I wanted to make an offer. She told me I can’t make an offer without a pre-approval letter from a lender. It’s been a really long time since I have bought or sold a home, so maybe things have changed. It seems I should be able to make the offer while talking with the bank. I really hate to miss out on this house. Are pre-approvals that important? Confused Buyer

Dear Buyer,

Generally, the answer depends on the specific circumstances in most real estate situations. If an attorney handles a trust sale or probate, they will most likely require a pre-approval before they consider your offer. I personally take offers more seriously when buyers include a pre-approval and proof of funds for the down payment. Buyers who submit offers with the proper supporting documentation position themselves more strongly in negotiations.

If the property involves a standard sale, the seller—guided by their real estate agent—decides whether to respond to an offer without a pre-approval. You can strengthen your offer by including proof of funds for your down payment, a credit report, and recent pay stubs.

Additionally, you might also include a cover letter explaining that you have contacted a lender. Mention that the seller’s Realtor is encouraged to give them a call to verify your qualifications.

Additionally, lending guidelines are constantly changing. I am sure you can understand a home seller’s reluctance in taking their home off the market for a buyer who may not be able to obtain financing. Good luck to you. If this home doesn’t work out, continue with the pre-approval process so that you don’t miss out on the next one.

Are pre-approvals that important?

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