A: The Realtors are giving you that advice because every purchase offer a Realtor may write for you must be accompanied by a pre-qualification letter from a lender. I say "must" - it is not a legal requirement, but listing Realtors and the sellers they represent do not want to even consider a purchase offer unless they know it is from a qualified buyer. Since you seem to have very specific criteria in the house you want, I am going to guess there are many other buyers out there in the home search jungle who want that same home when it comes on the market. If the other prospective buyers have been to a lender to pre-qualify and you have not, they will be able to get their purchase offer in more quickly and receive first consideration for the house that you want. For most buyers, finishing second one time when they think they have found the perfect house is a lesson they do not want to repeat.Speaking of that letter from the lender; you go meet with the lender, take in all the paperwork they want, have a credit check and jump through their hoops, then you wait. That is to say, you wait until you find the house in which you want to make a purchase offer; and, then you have the lender write that letter stating you qualify to purchase a house of the exact amount that you offer.I will give you an example of a recent client I worked with: They went to the mortgage company early as I advised and they were pre-qualified to buy a house up to $400,000. The next week we looked at a home priced $295,000 and they offered $275,000. When they decided on that offering price, all it took was a text message to the lender and she sent a letter to the client and me stating that they were qualified to purchase a house for $275,000. It did not say any more or any less.I typed up their purchase offer, got their signatures and submitted that along with the letter all at one time to the listing Realtor. You can imagine a buyer does not want a seller to know they can more than qualify to buy the house. That knowledge might very well cause the seller to not take a penny less than their asking price and end negotiations right there. Bottom line, heed the advice of going to see a mortgage loan officer. That meeting may take an hour of your time, cost you nothing (or a small fee for a credit report) and put you in position to know exactly how much home you can afford to buy, plus positioning you to make that purchase offer when the right house comes up for sale. Doug Van Etten is an associate broker with Keller Williams Colorado West Realty and is also the founder/organizer of the Real Estate Investors Network (REIN). Contact Van Etten at DougVE@kw.com or 970-433-4312. For information on the REIN, info@REIN-WesCO.org.
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