The Real Estate Browser Volume 8, Issue 9 | Page 10

10 — Say you saw it in The Real Estate Browser of Lynchburg — Volume 8 Number 9 www.LynchburgRealEstateBrowser.com The Importance of Having a Pre Qualification Letter by Dan Vollmer, Associate Broker, ReMax 1st Olympic I get the opportunity to work with all types of buyers - first time home buyers, move up and downsizing buyers, retiring and investor buyers. And unless they are fortunate enough to have cash (or equity) to make their next move, each of those buyers has to be ready to finance their new home purchase. Many buyers are already familiar with the process - either anecdotally through a friend’s experience or by going through the process themselves in a prior purchase. Many buyers, however, do not realize the need or importance of speaking with a lender at the outset of their home search. Sometimes that’s due to a lack of experience. But just as often I find experienced home owners who just assume “oh I’ll be able to get a loan, that won’t be a problem.” That may not be the case - or at the very least, should not be considered a foregone conclu- sion. In every instance where the buyer needs (or chooses) to finance their home purchase, that buyer should meet with a lender to discuss their basic financial picture, and begin the process of loan approval. That process should begin prior to setting foot inside the first home. Why is that so important? A few reasons: 1. If the buyer is unable to qualify at all, any time spent looking at homes would have been a wasted effort for both buyer and agent. If there are financial road blocks that would prevent the buyer from being able to qualify, its better to know that up front. Also, in many cases the road- block is due to low credit, which can be improved over time. Knowing what one needs to do, and having a plan of action to move towards being able to qualify, is a much better use of time. 2. If the buyer has search criteria and a list of wants and needs that do not align with their price range, they run the risk of not only falling in love with a home they can- not afford, but it also sets them up for a huge disappointment. Looking a homes that not only meet the buyer’s needs, but are within an affordable range verified by a lender, keeps everyone’s expectations in line. Not to mention, avoiding such dis- appointment makes for a much happier home buying experience! 3. Supposing the buyer finds a home they love, it meets their needs, they assume its affordable, and they make an offer… the first question any seller will have is “Are these buyers approved? Can they make good on their offer?” Without a pre-qual- ification letter in hand, not only will most sellers not be willing to consider or nego- tiate, the buyer stands the chance of losing out on the home to another buyer that has already taken the necessary step. For these and many other reasons, any seri- ous buyer will want to meet with a local lender to begin the process of loan approval. The pre qualification letter issued by most lenders is the first step towards ensuring any buyer has their expectations properly set, their questions answered, and stands ready to make a solid offer on the home of their dreams. Questions, comments, or have an idea for a future article? Email me at [email protected].