Fab Real Estate Blog: Want to Buy a Home? Get Pre-Approved!

Want to Buy a Home? Get Pre-Approved!

A few weeks ago, I received a call from a prospective client who wanted to buy his first home.  We talked about his needs and wants.  Where he wants to live.  The basics.  We also discussed his price range.  When I talked about helping him get pre-approved for a mortgage, he refused.  He wanted to see what's out there in his price range first.

Well, if you need a mortgage to buy a home, and you won't get pre-approved for that mortgage by a mortgage broker, then how do we know for sure what price range to be looking at? 

Say we find you the perfect home.  You fall in love with it.  It has everything you want and more.  It's listed at $600,000, and that looks to be about the right price for that home, based on comparable sales we've looked at. 

What if, after finding this dream house, we then go through the mortgage pre-approval process, and it turns out you can only afford up to $450,000?  Can we find you a home in this new price range?  Of course.  But, in your mind, it will never compare to that $600,000 home you've already fallen in love with.  It will never compare to that $600,000 home you've already mentally arranged your furniture in, and already envisioned how much you'll enjoy taking long, hot baths in that beautifully remodeled master suite.

Basically, the buyer in this scenario has set himself up for doom and gloom.  It's my job to help my clients avoid this.  It's my job to guide you through the entire process, from start to finish, and in the correct order.

Let's find your new home.  Let's find that perfect home for you.  But, let's find it in your price range.  Whether you're just starting out, moving up or downsizing, there's a home out there for you, and together we will find it.  But, let's do things properly and in the correct order.  Let's get your financing set up with a mortgage broker first.  Let's discuss those numbers and your monthly payments.  Let's determine what kind of mortgage and payments you will be comfortable with.  Then let's look at homes in that correct, pre-approved price range. 

This way, we'll not only find your new home of your dreams, but it will also be one you can afford.

I haven't helped the above-mentioned buyer find a home yet.  I'm waiting until he decides to get pre-approved for financing first.  Hopefully it will be soon, as helping first-time buyers find their new home is one of the joys of my job.  I love the look on their faces when I hand them the keys to their new home!


Comment balloon 4 commentsDon Fabrizio-Garcia • December 29 2006 02:02PM



If this buyer is fighting you now...imagine how difficult he's going to be later.

I explain why we're going to get a pre-qual or a pre-approval at the beginning. I need the lender to fax me a "page 11" before we can see homes. No fax, no show. Easy.

Then, in the words of Mike Ferry: NEXT!

There are buyers who will use my services and follow my requirements...and enjoy the process and end up with a great house at a good price.

Posted by Eileen Landau, ABR, CRS, e-PRO (BAIRD & WARNER, NAPERVILLE) about 12 years ago
Do you come across any clients who want financing but are asking for a 1 % or neg amm loan? I always use extreme caution when i come across these requests.
Posted by Eddy Martinez (Nationwide Funding Group) about 12 years ago
Eileen - You and I are on the same page.  If they won't get pre-approved by a local lender, then there's no need to waste their time or mine.  Maybe, just maybe, if I have a good feeling about them, we'll go see one particular home of interest.  But that's about it.  Otherwise, we're just spinning our wheels going nowhere fast.
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) about 12 years ago
Eddy - I haven't seen many requests for the negative amortization loans lately.  I did see them in the past, when prices were jumping 1-2% per month.  What I do see is people getting approved for around a 6% rate, and then complaining because they saw an odd online for financing at 2%.  Argh!  But, it gives me, and the mortgage broker, an opportunity to educate them on the different types of financing.
Posted by Don Fabrizio-Garcia, Owner/Broker/Trainer - Fab Real Estate (Fab Real Estate) about 12 years ago