The importance of Pre-Approval: Maximize your chances for Acceptance
Whether you’re at the beginning of your search, or about to place an offer on a property, if your intention is to get a loan you’ll need pre-approval. This does not mean you have to buy right away; it merely enables us to have a clear understanding of what your price ceiling is in order to set the right expectations. Here are some facts about pre-approval:
Why it's important to get pre-approved early on in your search:
For starters, it doesn’t cost you anything or mean you have to buy now; so you’ve got nothing to lose. Most importantly, it’s one way to avoid (unpleasant) surprises down the line. Say you become attached to a property and think you’re clear for a certain loan amount, but when it’s time to put in the offer the bank falls short. Getting pre-approved at the beginning of your search gives you peace of mind, as it sets realistic expectations for yourself, and for us as your agent.
When that special property comes on the market, if we have your pre-approval we can pull the trigger right away. Way we see it is, better to have a loaded gun and be able to pull the trigger 7 months from now, than to wait those 7 months to apply for pre-approval and lose out on your dream home!
15 minutes to financial peace of mind
1. A 15 minute-phone call with our mortgage broker. Granted, you might already have an established relationship with your banker; however it is in your best interest to work with a mortgage specialist who will shop around for the best possible loan program. We put you in touch with our mortgage broker who will request your financials (social to pull your credit and W2s*).
2. Our broker pulls your creidt and submits your financial docs to the appropriate lender.
3. The bank issues a pre-approval based on your official W-2s submitted
*If you don't have your financial docs in a row, no worries! An alternative to pre-approval is getting a pre-qualification.Our broker pulls your credit report, and gets you pre-qualified for a certain amount based on your stated income over the phone. This gives you the extra time needed to get your financial docs together for an official pre-approval, but also ensures you don't lose out on properties as this pre-qualification enables us to place offers. (Jay review this)d.
Placing Offers: Demystified
Let's throw a couple of facts your way, clear up a few myths, and get you comfortable about placing offers:
Placing an offer does not mean you have to commit to the property.
It means you're seriously considering that property. Remember that the contract is written with 3 main contingencies which enable you to exit it should you change your mind, without penalty. The earnest money deposit (see escrow process section below) is not requested until we settle on a price and receive written acceptance from the seller. And even then, you can still exit the contract unscathed.
Why you shouldn't hesitate to place an offer on a home you like
Once you place the offer, we can tie up the property, and if you do so before anyone else has a go, this gives you first right of refusal. Remember, the market is becoming every day more competitive, and we're observing more and more bidding wars and multiple offer scenarios.
You can place multiple offers at the same time
In this rapidly-changing market we recommend that you place multiple offers on several properties, as you never know which home you'll gain acceptance on. Recently, one of our buyers who'd placed an offer on two homes based on our recommendation as both were in bidding wars, got his offer accepted for both. Turning down sellers and getting the home of your choice is a good position to be in.
For Income property buyers, placing an offer comes before showing
Sellers do not want to bother their good-paying tenants with non-committed buyers, so placing an offer is actually required before being able to show an income property. And with the rental market in such a dynamic state, we're observing multiple offer scenarios on income properties--some buyers don't even request showings until after the escrow process starts, at inspection time (Jay revise this).
Placing offers is simple
Once you're interested in that special home, we'll draft up the contract and advise you on the best terms to submit. In this current market, once the first offer is submitted you're typically looking at a couple of rounds before acceptance (average of a week unless you're submitting at asking). Through this process we will extract as much information from the listing agent to submit a figure with the best chance of being accepted. Listing agents usually know their seller's bottom line. We'll handle that delicate and stressful process of drawing it out of them to make sure you present an offer with the best chance at beating out all the others (Jay revise this).
Go to the next step: Escrow Timeline