Why do some buyers get pre-approved before looking at property, and others don’t? Why wouldn’t they want to? There are very good reasons for getting a pre-approval in place.
For starters, having a solid number to work with is important. Staying within that bracket when making a purchase gives a bit of breathing room down the line. Moreover, the whole process shows exactly where you stand financially. Going through a pre-approval and sticking with your budget means that you will be able to own, maintain and pay off your home in relative comfort.
The pre-approval means you’ve got the bank’s trust and this can really help at offer time. Think about it from the sellers view point; two offers, one conditional on financing and the other pre-approved. The offers are the exact same otherwise. Which one would you entertain first? Being pre-approved means you are serious about buying. Anything less puts you into tire kicker territory and your agent better be great at convincing the seller otherwise.
What keeps people from getting pre-approved? Lethargy, fear, embarrassment, worry and perhaps denial come to mind. Change is tough and buying a house is a huge responsibility. But one way or the other you will need to work with the bank, and putting it off until you make an offer does not make sense.
Even if you are paying all cash, the bank, lawyers and your Realtor are going to know your financial status, so get used to this. Lastly if you are in denial about what you can afford you need to talk to the bank regardless. The professionals there will show you what is possible, and what is not. Being realistic is pretty important in a real estate transaction.
If you are serious about purchasing a home, get pre-approved. There is absolutely no downside to doing so and rates are usually locked in for several months. Put the advantage in your court when making an offer. Know what you can afford and choose accordingly. Be financially smart!