Real estate agents follow certain procedures in order to serve their clients the best way possible. By requiring clients to have a pre-approved mortage, they are looking out for their best interests. This doesn’t mean that they’re trying to be mean in any way. In fact, the main reason why they’re doing this is because they value your business. Searching for the perfect home to move into is a lengthy and tedious process. A pre-approved mortgage is usually required before even beginning the house hunting process. Many people have a burning desire to purchase a new home. However, not all of them have the necessary abilities to do so. There are certain factors which need to be considered in order to ensure the best results for both parties. Here are the Reasons Your Agent Wants You Pre-approved Before Showing You Homes.
1. Saving Time
Applying for a mortgage usually takes a lot of time before it’s successfully processed. By being pre-approved before actually looking into potential homes, the agent is effectively saving precious time. It shortens the process of closing the contract and finalizing the paperwork. If your mortgage has been officially approved beforehand, it will save plenty of time for you and the agent. It will be beneficial for both parties since the deal can be closed much faster.
2. Determining how much you can afford
Similar to saving time, it’s important that even at the very beginning your agent already knows how much you can afford. Doing this will help him narrow down your choices into houses you can realistically afford. It helps him focus on houses within your specific price range. In effect, he will be able to offer you the best houses available according to your budget. This makes the entire selection process go more efficiently.
3. Increasing your negotiation power
Since the seller already knows that you have the essential financial capabilities to purchase a home, it would improve your chances of having your offer approved. Because your mortgage is already pre-approved, it strengthens your offer compared to people who haven’t been pre-approved. As a result, you will receive the upper hand in negotiating a fair price for your new home. Most of the time, homeowners who are desperate to sell their houses will agree on a lower offer because they know that the buyer is equipped with the necessary financial abilities.
4. Agents want to have an assurance
One of the main reasons why agents will not work with you if you don’t have pre-approved mortage is because of the risks involved. The process of hunting down the best house for their clients is a tedious one. It involves moving from house to house on different locations. It’s a lengthy process and it involves countless hours of work for the agent. Since it usually takes a long time for clients to finally decide on a house they want, agents want to have the assurance that their hard work will pay off. They want the guarantee that in the end, their clients will be closing the deal and signing the contract.
5. A seller requirement
Most sellers will not entertain an offer without any assurances that the potential buyer is qualified for a loan. Quite frankly, I advise my clients to decline any offers that do not have a preapproved mortgage letter from a reputable lender. Most seasoned realtors will not write up an offer for a buyer without a preapproval letter, so it’s very uncommon for sellers to receive an offer without one.