In today’s market, with the rise in home prices and lots of competition for homes, having a complete understanding of your budget and how much house you can afford is essential. That’s why connecting with a lender to get pre-approved for a loan early in the home buying process is so important. This step signals to sellers that you’re a serious, qualified buyer. This can give you a competitive edge in a bidding war.
When buying a home right now, you need to be intentional and competitive. Pre-approval from a lender is the only way to know your true price range and how much money you can borrow for your loan.
With limited housing inventory, there are many more buyers active in the market than there are sellers, and that’s creating some serious competition. According to the National Association of Realtors (NAR), homes are receiving an average of 5.1 offers for sellers to consider.
Bidding wars are more and more common, but a pre-approval gives you an advantage if you get into a multiple-offer scenario. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war.
Freddie Mac explains:
“By having a pre-approval letter from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.”
Anything you can do to gain an advantage as a buyer is crucial when today’s market is constantly changing. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards.
You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals such as a loan officer and an experienced real estate agent to help you take the right steps that will show your qualifications as a buyer when you find your dream home.
In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your home buying budget, but it shows sellers how serious you are about purchasing a home.
If you are thinking of buying a new house, call us. At VIP Realty, we have helped thousands of people achieve their dream of homeownership.
At VIP Realty, we have helped thousands of people achieve their dream of homeownership. Greg & Evan Skinner take pride in the relationships they build while working relentlessly on their client's behalves selling commercial, industrial and high-quality residential properties. Give us a call at 614-537-1994 to learn more.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. VIP Realty does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. VIP Realty will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.