August 29th, 2011
When potential first time home buyers start thinking about making the big purchase they often head straight for the real estate sites.
But in her blog post “What’s the first step in the buying process?” Erin Lantz suggests that buyers think about the mortgage before they chose the home.
First, speak to a lender. Disappointment is terrible, especially when it comes to homes. Before you do anything else you should speak to a mortgage lender who can give you an idea of how much you can afford, and what you can get approved for.
Real estate agents agree. The last thing they want to do is waste your time and theirs (no offense) looking at houses that you can’t afford. If you go to a real estate agent AFTER going to the lender the agent will know you’re serious about buying – and they’ll be serious about finding you the right home.
Second, get pre-approved. If talking to the lender tells the agent you’re serious, getting pre-approved will tell the seller you’re definitely serious. If you can submit a letter of pre-approval with your offer it will give you a BIG leg up.
For one thing, it shows that you’re credit-worthy. As lending standards get tighter, having a serious, eligible buyer is crucial.
For another thing, it speeds up the lending process. Getting approved can take weeks, and sellers get nervous about waiting just to find out you didn’t get approved.
Third, chose an agent. With so many listings on the internet, many feel that they don’t need an agent. That may be true, but keep in mind that real estate agents are experts. They know the market better than anyone. They know which homes are good deals and which aren’t, and they can give you advice on everything from offers to home inspections.
Plus, agents have access to listings that aren’t available to the public, such as foreclosures. If you know exactly what you’re looking for in a home, you may have a lot of trouble finding it without an agent.
Recently a client purchased his home before it even went on the market because his agent was working with the home’s seller. Since the agent knew the house was exactly what he was looking for, he was able to put in an offer long before the property was even posted. Without the agent, the client certainly would have been competing with a number of other offers.