You’ve read it before, unless you just learned to read (in which case house hunting is a long way off for you), on financial platforms, blogs, real estate websites, magazines, newspapers, and maybe even ancient hieroglyphs: get pre approved before you start looking at homes.
This is what you’ve never read from any credible source: sure, go ahead and start calling agents to show you listings before you speak to a lender. Why haven’t you seen it from any legitimate professional? Because it wouldn’t make any sense.
When COVID first hit, the entire industry marshaled the will to finally put their foot down and mandate that no one would tour a home without a pre approval. Consumers complied, and it didn’t even require an explanation because common sense shouldn’t. Showing confirmations didn’t go out without an e-mail with a COVID disclosure and a pre approval. In a huge cloud of Corona virus chaos, this was a silver lining. But as time went by and the pandemic numbers dropped, we got sloppy. People stopped being so cautious. And the small battalion of home seekers without a pre approval swelled into a wave of unvetted, approval free question marks that wanted us to open doors.
So, without further ado, here are more reasons why you should get pre approved first:
- You won’t get your heart broken. In this market, listings go fast. If you see it on a Saturday, it’s going to highest and best by Monday. And the winning bid will have their complete act together. You won’t. And damn, you would have been so absolutely happy in that house.
- You need to know what you can afford. In a world that rightly demands professionalism from agents, lenders, attorneys and everyone else involved, it’s the common sense, professional thing to do before shopping.
- It’s only fair to the seller. When you visit a house for sale, that is someone’s home. They sleep there. They eat there. Children are raised there. And with the rare exception of vacant homes (which have their own rationale fore requiring a pre approval), those people will return there a few hours later to eat, sleep, and live. You are a guest. The seller, their kids, whoever is living there made arrangements to be out of the house to accommodate your visit. The seller has a right to know that the person walking through their children’s bedroom, opening their cabinets and closets, and spending time inside that home is at least qualified to make the purchase.
- It’s safer. Real estate agents make a living meeting strangers alone in empty houses. When people call us and want to see those properties, virtually anonymously, that is a risk. I know too many agents who have had to deal with creeps, perverts, harassers, deluded suitors, and worse. I am the charter president of the Beverly Carter Foundation. Beverly was kidnapped and murdered by monsters masquerading as potential buyers. I want every single one of my agents to get home safely and with peace of mind, every day. No exceptions. And I don’t want to hear from a seller that something is missing, and not be able to tell them who was in the house. The graphic posted is a real text exchange encountered by a colleague. She’s sadly not alone.
- It’s reasonable. When you test drive a $2000 used car, they get your license. If you buy spray paint they check your ID. If you want to buy cigarettes, they check your ID. Yet, if you want to walk through a 6 or 7 figure cost home you can’t possibly think it OK to not have any credential or qualification.
- You have to play your part. Lots of people are involved in the sale of a home. Last year, I got a call from someone who said they were a cash buyer who wanted to see a vacant unit in a condo complex where they said they also lived. In checking the listing, it stated that no showings would be approved without proof of funds or a pre approval. She took some sort of offense to this, stated louder that she was a cash buyer, and that she’d provide proof if she was interested after seeing the place. Not only was this backwards, but she was making it all about her. That’s the kiss of death in any market, but in this market, that’s laughable. Sure the place is vacant, but the owner still incurs liability for an unsupervised property. An agent still needs to drive over and accompany the showing. The listing agent still needs to follow up. And the domino effect of their family, colleagues and other clients is no small thing. The value of other peoples’ time should never take a backseat to 5 minutes on your computers and hitting “print.” I’ll die on the hill that this person was curious and wanted a free tour guide to satisfy her inquisitiveness.
- It’s absurdly easy. Upon occasion, we will have a prospective buyer tell us that their pre approval is “in process” or coming in a few days.
I do this for a living.
It takes 15 minutes to get pre approved unless you are a hot mess. This is the computer age. A few minutes on a call with a loan officer, an email with your last paystub and a bank statement, and you’re due for a shiny fresh pre approval letter within hours.
Some of the concerns we hear about getting pre approved are easily addressed:
- No, it will not adversely affect your credit score. Buying a $200 dinner on your credit card will lower your score more than a single mortgage inquiry. You’d need dozens of inquiries to truly damage your credit score, because that would mean you are frantically trying to borrow. One, two or three inquiries from lenders over the course of weeks, or months is virtually meaningless.
- As I said above, saying that you don’t want to waste your time getting pre approved unless you find a home you like is utterly selfish and insensitive to the value of the time of all the others involved in accommodating you. The buyer agent, the listing agent, the sellers, the other buyers who can’t see the home while you’re taking the time, the family and co workers of the aforementioned agents who lose time while they are with you, all disrupt their schedule to assuage your curiosity. That’s not cool. You don’t live in a bubble. If you do something that involves the time and help of other people, play your part or stay home.
- You’re waiting for XXXX and want to get a head start? By the time XXXX happens this house is gone. So please wait and get your financial house in order.
- And yes, dangling that you’ll list your home with us if we just show you this house first is also not cool. Let’s take a look at your house and ascertain that you are a ready willing and able seller first. Let’s not put the cart ahead of the horse.
If you sense an eye roll quality to the tone of my piece here, you aren’t wrong. I originated mortgages for 7 years. I’ve brokered thousands of transactions. I’ve done this every day since the 90s. I oversee close to 100 agents, and the exponential amount of interactions they have with the public in a fast moving industry like this, especially in the current market, boggles the mind. But I’m not writing this for them. Scroll up. I’m also writing this for you. Play your part and invest the 15 minutes in yourself.