Home Buying in Indio>Question Details

CMILL, Home Buyer in Indio, CA

Will a Pre-Qual Letter be enough to begin looking at properties?

Asked by CMILL, Indio, CA Mon Nov 19, 2012

We had a realtor who pretty much dropped us after we told he we didn't have a pre-qual. Problem is we not ready to buy till December but want to start looking now. Suggestions?

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7
Hi CMILL,

Let me take this from a different angle.

Buying a home is not like buying a car; buying a home is a significant financial obligation and it needs to be treated as such. A Pre-Approval IS your first step - period. To do otherwise would be an exercise in futility, in my opinion and in my experience.

Yes, I'm aware looking at property upfront gives you an idea about a neighborhood but what do you hope to achieve by seeing property you cannot buy? A 50/50 chance you waste all parties time? Why not be 100% sure your time, effort, and energy goes towards an achievable goal!

In addition, the supply of "on market" homes in many areas are well below current demand with some areas having less than one month supply. You NEED your Pre-Approval UPFRONT if you want to be seen as a viable offer.


Here are a number of links that should help you very much:

“Pre-Qualified vs. Pre-Approved vs. True Pre-Approval”
http://www.Steven-Anthony.com/GettingStarted
Also has a list of documentation you will need to obtain a Pre-Approval along with a link to a credit score estimator (see bottom of web page).

"Retail Banks vs. Mortgage Broker/Bankers"
http://tinyurl.com/6qln6nd
Personally, I only work with Mortgage Broker/Bankers.

http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm…

http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf

-Steve
1 vote Thank Flag Link Tue Nov 20, 2012
Hi CMILL,

As other agents have already answered, it's much more to your advantage to get a "Pre-approval" instead of just a "Pre-qual" as they don't mean much.

We have an office right in Indio located at 81730 Highway 111, Suite 6, Indio, CA 92201. Feel free to call Dale Furman, who manages the Indio office at (760) 702-5857 and she can assist you. Her email is Dale@OrangehillRealty.com

She has over 14 years experience and is very pleasent to work with.

Sincerely,

Lon Mapes
Owner/Broker
Orangehill Realty
0 votes Thank Flag Link Tue Nov 20, 2012
While different Realtors practice real estate differently, many would agree with your Realtor's position. How do you know what price range to look for a home in if you don't know how much a lender will approve you for?

By looking at homes without the solid foundation of a pre-approval, you run the risk of being very disappointed if you in fact don't qualify, or qualify for less than you expected.

In addition, Realtors do not get paid for their time, so an experienced agent will use his or her time wisely.

My suggestion - get the pre-approval...you will be much clearer about the costs, and what you can afford. These last for 90 days and can be updated at the end of that time.
0 votes Thank Flag Link Tue Nov 20, 2012
If you want sellers to take you seriously you need a pre-approval, not a pre-qualification. The difference is explained by Christopher below. While the market may be less intense where you are, here in San Francisco you couldn't get an offer accepted with just a pre-qualification because it doesn't mean much.
0 votes Thank Flag Link Tue Nov 20, 2012
Hi, There is a big difference between a pre qual and a pre approval. A pre qual is basically a pre approval to a pre approval. Your loan officer is giving you a verbal approval based on what you have told them about your income and finaces. It basically holds no ground when making an offer and doesn't give you an accurate purchase figure. With a pre approval the lender takes all the info you have given them, verified it, pulled your credit, and passed everything to an underwriter for approval.
If you are worried about damaging your credit by having it checked, dont. Initially it might affect it slightly but these approvals are generally good for 60-90 days depending on the lender. If it expires and you need a new letter they can generally just update it if nothing has changed with your situation. in some cases they may have to do what is called a "soft pull" of your credit that shouldn't affect the score. Plus the reporting bereaus will see that the pulls are all related to buying a home and not various random pulls.

Hope this helps.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Tue Nov 20, 2012
You need to make sure you have a prequalification from a good local lender and proof of funds for the down payment.
If I were you I would then interview three local agents and discuss your expectation and their experience.
Purchasing a home goes way pass finding the home. I have written many blog posts on buying and interviewing agents on Trulia if you go to my profile.
Good Luck.
Web Reference: http://www.LauraCoffey.com
0 votes Thank Flag Link Tue Nov 20, 2012
I will try and answer your question with some experiences I have had.

As with most agents, I normally do not take clients that are not pre-qualified.
These two clients somewhat begged and pleaded and promised to work on their pre-qual soon and I took them on as clients mainly because they were friends.

The first client we looked at an area for $400K-$500K homes as she told me this was her budget. After about 6 outings she finally got her pre-qualified and it was for $700K. She was surprised at the higher amount and totally lost interest in the area we had been searching in and started looking elsewhere. A positive ending except for the fact we wasted 6 days in the wrong area and price.

The second client I showed her around about 6 times as well and for her budget price of @ $300K. On that 6th time, she found her dream house and finally then did she apply for a pre-qual. I called and called her the next few weeks inquiring as to how the pre-qual was going. I didn't get a hold of her for two months. After I did get a hold of her she mentioned she was told she had real bad credit, was denied, and it would take her over a year to fix her credit report. A negative spin and 6 days of our time wasted.

A pre-qual informs you as well as the agent what your real budget is so you don't waste your time as well as his. Showing clients properties take about 4 hours each outing. If you go out with an agent just 6 times that's about 24 hours that is wasted if you end up not qualifying or qualify for a different amount than what you were looking for. Getting a pre-qual also lets people know you are serious about buying a home.

Let me ask you a question. I understand you are not ready to buy until December but there is no penalty in getting a pre-qual early so why are you not trying to get pre-qualified?
0 votes Thank Flag Link Mon Nov 19, 2012
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