Claudia1981, Home Buyer in Los Angeles, CA

My agent says a pre-approval is only done after the offer has been accepted?

Asked by Claudia1981, Los Angeles, CA Fri May 1, 2009

I am only pre-qualified for 70k, I asked him to give me a copy of my pre approval and he said ok and sent me a pre qual letter and when I asked him why he told me I was pre approved he said they only do that once the offer has been accepted and I want to know if this is true or not because I have placed 3 offers in the past 3 weeks and all have fallen through he states because I was outbid. I'm really considering changing finding someone else who can help me. I am looking in Hesperia, Apple Valley and Victorville . I need to move this process along quicker I currently reside in Whittier Ca. and am spending way too much in an apartment would love to move asap. Thanks again!

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Hi Claudia, your agent may be tripping up on semantics as far as when a Pre-approval is done; however, the lower end of the market is being hit hot and heavy by investors right now.

As a Realtor, Mortgage Broker and Certified Mortgage Planning Specialist I would highly recommend your very first step be a Pre-Approval if you desire accuracy in knowing your total costs upfront. The type of financing you choose has an immediate effect on what your options are.

There is a difference between a Pre-Qualification and Pre-Approval. If you are looking for accuracy void of surprises you want to be Pre-Approved first. For the differences see:

Via the Pre-Approval process you will know exactly what you can "technically" afford based on current interest rates, Then, it's up to you to decide how comfortable you want your payment to be by reducing your target sales price or increasing your down payment. MOST IMPORTANTLY, the Pre-Approval makes you aware of any issues that will prevent you from buying when you want to.

As part of the Pre-Approval you should also ask for a Good Faith Estimate if you want to know all of the costs of purchasing a home based on a set Sales Price that includes all third party costs (title, escrow, insurance, property tax, appraisal, inspections, etc.).

My suggestion on financing would be a 3.5% down FHA loan due to its forgiving credit flexibility.

Best, Steve
1 vote Thank Flag Link Fri May 1, 2009
You're agent isn't very experienced. You can obtain a pre-approval long before you even start shopping for houses.
1 vote Thank Flag Link Fri May 15, 2009
If everything has been documentated, income & assets then you could include some of that documentation (black out Socials & Account #'s) with your offer along with stronger verbiage within the letter your agent can or will provide regardless of the title.

Any further financing questions let me know.

Good luck to you.
1 vote Thank Flag Link Sat May 2, 2009
Hi Claudia,

My advice is to find a lender who can get you fully pre-approved before shopping for homes. The advantage is you'll know for certain what you can afford, and when you write an offer, you'll look like a credible buyer and sooner or later your offer will be accepted.

I know you really want to get out of Whittier. If you need a referal to a lender, or simply have additional questions, you can reach me at (213) 598-5224.

Take care,

David Luke
1 vote Thank Flag Link Fri May 1, 2009
A pre approval is always done priort to making any offers. No one in the right mind would entertain an offer unless the buyer was approved, it just wastes everyone's time. Sounds to me like you are frustrated by the process, outbidding is very normal in this market, multiple offers, investors paying cash, so sometime the 1st time homebuyer has to wait. Be patient, it is a great time to buy. Also, the $8,000 tax credit is a good incentive for you... as long as you close by November 30th.
0 votes Thank Flag Link Thu Oct 22, 2009
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