Buyers are starting to get aggressive on making offers once they find a home they love, but many are not getting a firm pre-approval letter up front.  Forgetting this important step in the home buying process could end up preventing you from getting the home of your dreams.



When local real estate was in a downturn, the sense of urgency to get financing was not very high. Buyers figured they could take their time to find a home, and then they'd firm things up with their lender.  However, with the market starting to really heat up and inventories still low, buyers must change this lackadaisical mindset.

The problem isn't that buyers are totally forgetting to speak to a lender. They are simply getting pre-qualified instead of pre-approved. A simple conversation over the phone usually is not sufficient to grant a real "approval letter".   A lender will need to pull credit and collect specific documentation from you such as pay stubs, W-2's, or tax returns. It may not seem like a big deal but this extra step makes all the difference in the world.

I have seen cases when a buyer gets pre-qualified over the phone, and then ends up not qualifying once the lender verifies all pertinent information.


In an active market, you never know when that special home will come on the market, and when it does, you will need to act quick. Waiting until after you find your home to get your financing in order may be too late.

Getting a solid pre-approval letter will allow you to move forward with confidence and may also help you stand out over another buyer should you get into a bidding war.

The difference between getting pre-approved and pre-qualified is merely time and a little effort on your part but is well worth it. In fact, it could ultimately determine whether or not you get the home.