Whether you are buying your first home or your tenth, understanding the process will make things go smoothly and ensure you don’t lose out on the home of your dreams. The first step in this process is getting approved for a loan. This may sound backwards to you as it does to many buyers, so we’ve put together a list of reasons this should be your first step.

Avoid Disappointment

Imagine searching for months for your dream home. You finally see it, it has the white picket fence and the tree swing, granite countertops in the kitchen with large windows looking into the gorgeous backyard. You put in an offer and the owner wants proof that you can afford the home, so you quickly talk to a loan officer and suddenly get word that you don’t have enough income or down payment to qualify for the home of your dreams. Your dreams are quickly squashed like a bug and the search starts over. Of course you can imagine every home will now have to live up to the home you lost. Being realistic from the beginning will help you find the home you are meant to have, as well as waste less of your time.

Respect the Sellers Time

When you are trying to sell a home you of course want to make sure it looks great for showings. If you are still living in the home that can be quite an undertaking with a busy schedule, and dealing with family members and pets that still need to use the home to sleep, eat, bathe and generally live their life in. If you have never sold a home before it can be hard to understand the pressure to make sure your home looks perfect everyday, no clothes laying around or mail unopened on counters, dishes and laundry always done, everything always perfectly cleaned, and taking the family somewhere else during showings. Now imagine an agent brings a potential buyer that can’t even afford the house. The level of frustration sellers feel at people that just want to look at their home can be significant. With the Internet today, you can look at many homes to catch a glimpse of what they look like, but you should only visit a home if you are actually interested in buying it and qualified to do so.

Respect Your Real Estate Agents Time

In the same vein, real estate agents help people buy and sell homes in order to put food on their table. This is how they pay their bills and earn their living. When you do not know if you can afford a home you want to see, this means they are not only potentially working for free for you, they are not working with other people that can buy a home and want to view something at the same time. Agents earn on commission, so they only get paid when a house is bought or sold, they do not get paid to drive buyers around and look at houses, or give tours of communities. Imagine your employer asking you to work but letting you know they don’t know if they can pay you. You would look for a job where they can pay you instead.

Show You Are Serious and Know Your Limits

Today, most real estate agents will simply not work with you if you are not already pre-approved as it shows whether or not you are really ready to buy a home by taking that first step. In a tight real estate market where homes are getting multiple offers very quickly, you will need to have your loan officer on standby to create proof of funds letters. While buyers want to get the best price and often start lower than asking price, if you find yourself bidding on a home against other buyers you will need to know how high you can go. Being able to submit that information as soon as you see a home can give you the edge you need over someone that wasn’t approved yet and has to gather the information they need for the loan officer.

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