Imagine the following scenario: You’re in a department store. You desperately need a lawn mower. You find one you like and take it to the checkout counter. Reaching for your wallet you find
only an empty pocket. You’ve left your wallet at home. But you need this lawn mower. If you don’t mow the lawn soon you’re going to need a hay baler. And it’s an hour drive back home and back.

“Look,” you say to the checkout lady, “I left my wallet at home. Can I take it now and bring you back some money tomorrow? Or maybe next week?”

Blank stare.

“I assure you I have the money to pay for this. I just can’t pay you right now.”

Blank stare.

As unbelievable as this scenario is, it happens frequently in real estate. People contact a real estate agent and want to begin shopping for homes without having been pre-approved for a loan. When the agent asks if they if they have been pre-approved the person typically responds, “Uh, not yet. But I’m
just looking at homes at this point. I want to see what’s out there.”
Many are surprised (even a bit perturbed) when the agent says, “Let me give you some names of some good mortgage companies. Give them a call, sit down with them and call me back when you’re
pre-approved. I’d be more than happy to help you then.”

Let me give you three reasons why you’re at a big disadvantage without a pre-approval. (click here to watch a short video)

1. You don’t know what you can afford.
About 90% of people begin their search for a home online. Then many of them then use an online calculator to figure what their mortgage payment will be. Problem: online calculators are often
wrong. They don’t always figure in all of the expenses.

An example of this happened several months ago. I was contacted by a couple who wanted to buy their first home.
“Wonderful,” I said. “Have you been pre-approved for a loan?”
“Not yet. But the online calculator shows we qualify for $185,000.”
“Great. I’ve seen some good homes in that range. But first sit down with a loan officer, fill out
the paper work and let me know what they approve you for. Then we’ll go shopping.”
They followed counsel. They sat down with a good mortgage company and then called me back in a week.
“So how much were you pre-approved for?” I asked.
The disappointment in the husband’s voice was obvious.
“Not what we were expecting,” he said.
“How much?”
“$160,000. We’ve been looking at all the wrong homes online. We need to start all over again.
That online mortgage calculator really threw us off.”

2. No one will take you seriously.
Did the checkout lady take the lawn mower man seriously? Sellers won’t take you seriously either until you have been pre-approved. Some agents/sellers won’t even let you look at a home unless you bring along a letter of approval from your mortgage company.

3. You can’t jump when you spot a great deal.
Some homes come on the market for a very short time. I saw one several weeks ago that came on the market in the morning, received three quick offers and was sold by the end of the day. That was a
small window of opportunity. And only those who were pre-approved got to play.

So take the time and effort to get pre-approved prior to shopping for a home. To modify a catchy phrase: “Pre-approval. Don’t leave home without it.”

If you want to buy a home get pre approved by clicking here.

Clint Carver
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Clint Carver

Loan Officer at Beam Lending
Clint graduated from the University of Utah with a degree in English. His prior experience includes 10+ years working under the direction of an Architect. When not helping families and individuals through the home buying process he can be found golfing and spending time with his family. Licensed in Utah and Wyoming. NMLS#826251
Clint Carver
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