I told my realtor I'd like to place a bid on a house I saw this weekend. She said I need a pre-approval ltr *before* an offer, is this standard

Asked by Hampton, 60015 Tue Nov 8, 2011

now? It's been awhile since I've bought a house so maybe things have changed with this market? But always before I would submit my bid with earnest money and didn't need pre-approval. I thought this requirement would be up to the seller and their agent, not my realtor. I'm just worried I will lose the opportunity while I wait until my bank processes my application.

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13
Jen Pfeffer, Agent, Charleston, SC
Tue Nov 8, 2011
BEST ANSWER
Hampton,

I've practiced real estate in several states and this is common practice. Most owners won't even blink an eye at an offer that isn't accompanied by a pre-approval letter. How else can you prove to the buyer that you're qualified to purchase their home? What if they have multiple offers? If your offer doesn't have a pre-approval letter, and the others do, your offer, regardless of the offer amount, may seem weaker due to lack of proof of being eligible to purchase. Just food for thought! Good Luck, I hope you get the house!
1 vote
Michele Wils…, Agent, Lake Forest, IL
Sun Jan 13, 2013
A pre-apporval letter also makes you a stronger buyer as the seller's concerns about your ability to afford the home are eliminated.
1 vote
Michele Wils…, Agent, Lake Forest, IL
Wed Jan 9, 2013
Your strongest offer will have a pre-approval letter from your lender attached to it. This way the seller knows you are qualified to purchase the home.
1 vote
Dan Tabit, Agent, Issaquah, WA
Tue Nov 8, 2011
Hampton,
It's a smart idea. Put yourself in the seller's shoes, would you accept an offer from someone who hasn't taken the time to meet with a lender to verify they are able to buy?
A pre-approval states that you have met with a lender who has verified your credit worthiness and upon further verification believes that you will receive final approval for a loan. These are standard practice for most serious buyers and will separate your offer from others if you select a popular property. Offers without pre-approval letters or proof of funds are not taken seriously by educated buyers and agents.
The process of getting pre-approved is relatively painless and shouldn't take too much time. You can do it online with some lenders or meet face to face with your bank or local mortgage broker. The more documentation you provide with your application the stronger the letter can be. Typical requests from lenders included 30 days of pay stubs, 2 years W2's and 3 months of bank statements. Best of luck.
1 vote
John Walin, Agent, Libertyville, IL
Sat Jan 19, 2013
old question how did this resolve itself?
0 votes
Jim Olive, Agent, Key West, FL
Fri Jan 11, 2013
Unfortunately in this world of mistrust and scam-artists, this has become the norm. I don't think it should stall the process, you should be able to get your pre-approval fairly quickly. I miss the days of hand-shake deals, but I'm afraid they are gone and everyone is looking to cover their six! Best of luck...
0 votes
Miekeba Jones, Agent, Silver Spring, MD
Fri Jan 11, 2013
Hi Hampton, This is a normal in some states. The pre-approval letter is able to show your offer's strength and ability to purchase. It is best to obtain the pre-approval letter at the beginning of the client- Realtor relationship.
0 votes
Riccardo War…, Agent, Bolingbrook, IL
Fri Jan 11, 2013
Our pre approvals take only a couple of hours. If you need one, please give us a call.



Sean Cochran
Quality Mortgage Lending
630-470-6830 office
630-330-2229 cell
http://www.qualitymortgage4you.com
0 votes
John Walin, Agent, Libertyville, IL
Tue Dec 6, 2011
Foreclosures sold by banks often require a buyer to qualify with the foreclosing banks affiliated lender. If this is not a foreclosure, the pre-approval is not part of the contract presentation requirement. In Illinois, strange I am the only local respondent, the law is that we as agents must have a buyer sign an agency disclosure form. Basically who we are working for, is it a dual agency situation, or our default position, presumed exclusive agency. If this agent was also the listing agent and you werent offered to sign a disclosure, that agent could get in huhe trouble. Your agent should have had you sign that. As for the pre-approval, that is not required by most sellers before receipt of the offer. Often the seller will not counter an original offer without proof of funds or pre approval. Many agents, myself included want to see a pre-approval before we show a property to someone to ascertain their seriousness as a buyer. If a buyer isnt willing to play 20 questions with a lender are they really going to pull a trigger and buy anything? That is probably the reason for the agent asking for it, not that the seller requires it to submit an offer, but to verify your ability to buy a house. Seller agent will want to get a pre-approval prior to acceptane, but to hold up an offer presentation unless its a foreclosure or relo property makes no sense.
0 votes
Terry Bell, Agent, Santa Rosa, CA
Tue Nov 8, 2011
This is standard out here in California! I would not be doing just diligence for my client if I didn't advise them to submit an offer with a pre-approval letter, because if another offer shows up, yours will be rejected for sure! Sounds like you have a thorough agent, and so be glad that you have someone that is there for you! Best, Terry Bell, Realtor, Santa Rosa, CA
0 votes
Linda S. Cef…, Agent, Franklin, WI
Tue Nov 8, 2011
Dear Hampton,

I wish every buyer would read this. This is why I work so hard to get the word out there to buyers to obtain their pre-approval prior to beginning their search.

However, in direct answer to your question, unless there are other offers or the seller (home owner or perhaps the bank itself) are requiring it, I would still go forward with the offer. And in the meantime, contact your lender immediately. Most buyers have an idea of what they can afford, but very often I run into situations where a buyer doesn't realize that they have something negative on their credit or they do not take into consideration other costs such as hazard insurance, flood insurance, PMI insurance, taxes, HOA fees, water, sewer, garbage pickup. These costs can add up fast and if a buyer isn't aware of them, they may not be in a position to know whether or not they can actually afford that home.

Hope I didn't confuse you even more.

Good luck on your offer.
0 votes
Christopher…, Agent, Methuen, MA
Tue Nov 8, 2011
It isn't necessarily a rule that a pre-approval letter be submitted with an offer, but the seller will not likely accept your offer until they see that you are pre-approved. I always submit a pre-approval letter with my client offers.
Web Reference:  http://teamlefebvre.net
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Nov 8, 2011
You have an experienced professional at your side,
you really should take advange of her.

Good luck and may God bless
0 votes
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