As an Accredited Buyer’s Representative (ABR), I am dedicated to provided top-tier service as a buyer’s agent. Part of my business is requiring my buyer clients to have a “pre-approval letter” if they are planning to use financing to purchase a home (rather than cash). This blog is going to explain what this letter is and why it’s important to a real estate transaction.

A pre-approval letter will come from a lender with whom you’ve completed a loan application. This letter is essentially the lender expressing that they have reviewed your loan application (which details your financial circumstance) and has pre-approved you for purchasing a home.

Whenever we find a home that you’re ready to put an offer on, we will submit the pre-approval letter alongside your offer to show the sellers that you are a ready, willing, and able buyer of their home.

A pre-approval letter is typically valid for around 90 days, so I like my clients to fill out loan applications and get these letters before we start looking at houses for a few reasons:

• It will detail your purchasing power. I don’t want to show you houses that are over your budget, and I want you to feel comfortable with the quoted closing fees, down payment, and monthly payments before you fall in love with a house! When you find a home you love, I don’t want there to be any financial surprises behind those doors.
• It will allow us to move quickly, if needed. If the house you love has other interested buyers, by having a pre-approval at the beginning, we can move quickly in submitting an offer.
• It helps us write a better offer. We will stipulate in the contract how many days you will need to receive full loan approval, so if you’ve already done your part in getting pre-approved, that will cut down the time needed for full approval. Less time needed for financing approval looks appealing to sellers because it means they’re that much closer to selling their house to you.
• It reveals if there are any financial issues that need to be addressed beforehand. If there are any credit or down payment needs that you need to work through before it makes the most sense financially to purchase a home, I would much rather find out before you get under contract.

I prefer my clients to get a pre-approval letter before we have a sit-down buyer consultation, so if you’re ready to take that step, head over to my RESOURCES page, where you can pick a lender or mortgage broker that you’d like to work with. If you’re not sure who to reach out to, that’s okay–just give me a call, and we can talk through it. I’m here to walk with you every step of the way.