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Are pre-approvals that important?

ask phyllis a real estate question

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 preapproval 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, with most aspects of real estate the answer depends on specifics. If an attorney is involved due to a trust sale or probate, most likely a pre-approval will be required before your offer is considered.

Personally, I feel that offers submitted with pre-approvals and evidence of down payment are taken much more seriously. Home buyers who submit their offer with the appropriate accompanying paperwork are in a stronger negotiating position.

If the home is a standard sale it is up to the home seller (with the guidance of their real estate agent), to make the determination whether your offer will be responded to without a pre-approval. You might try submitting your offer with evidence of your down payment, credit report and paycheck stubs. Additionally you might also include a cover letter explaining that you have contacted a lender and 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.

Related Post: Can a seller force you to use their lender?

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