Chances are if you have ever had a conversation with a Realtor you have been asked “are you pre-approved?” A pre-approval is a letter from a lender that states you have the ability to purchase a property within a certain price. They take a quick look at your debt, income, and what you want your monthly payment to be. Then they are able to give you an accurate price range. Not only does this give you criteria for your home search, but it allows you to shop confidently without wondering whether the house payments will be too high. While your peace of mind is important during the real estate transaction, that isn’t the main reason that pre-approvals matter. We will get to that in a moment.
In Portland houses are selling faster than hotcakes! If you are looking for a home in a desirable neighborhood, that is move in ready, you are going to have a lot of competition. As an example, here are the stats for the Richmond neighborhood. As you can see, the average days on market before a home went pending (upper box) is 10 days. That is less than 2 weeks on the market before the seller has negotiated and accepted an offer. If you look at the closed sales (bottom box) you can see that the average is only 3 days! While I did select a specific neighborhood, this trend continues into almost every neighborhood of Portland.
So, Back to the importance of the pre-approval. Say we are out looking for houses and you fall in love with one of these cute homes;
if you didn’t already have that pre-approval on hand, you wouldn’t be able to write an offer in time to even be considered. There are a lot of people out looking for the same homes and the only way to win is to be more prepared than your competition is. The first home that you lose is always the hardest, and while sometimes there really is nothing more that you can do, if you lose a house because you missed a step in the beginning, you will always regret it. Calling a lender and talking numbers for 20 or so minutes may not be the most fun thing in the world, but it is a lot more fun than losing a house.
If you are getting ready to enter the real estate market and need some referrals to lender, I would love to help you out. And as always, if you or anyone you know has any real estate needs, I am never to busy to help!
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