“If I’m not buying a repo or a ‘short sale’, why do I have to be pre-approved?”
The answer to this will quickly become obvious once you understand what it means to be a seller in today’s market.
In fact, as a the Listing agent, I would caution my sellers to, “Insist that a buyer be pre-approved before negotiating price and terms?”
Today’s home seller is in competition with hundreds of homes on the market, some of which are repos and short sales. Every single repo bank or ‘short sale’ lender insists that a letter of pre-approval accompany a Buyer’s offer to purchase.
Likewise, in this economy, with credit terms tighter than ever, and the competition to capture a qualified buyer tougher than ever, no home seller should ever assume that a buyer who submits an offer is a qualified buyer. Get it in writing. . . No matter how terrific or how solid the buyer’s agent thinks his client is.
In fact, at the risk of sounding cynical, a Seller should take a clue from the banks and relo companies: Assume that unless the buyer’s offer is accompanied with a Letter of Pre-Approval, he isn’t a serious buyer candidate. Otherwise this would have been taken care of way ahead of time.
Simply put: If you are a seller, can you really afford to take your home off the market for several precious weeks, with qualified buyers passing you up, only to learn (much to everyone’s disappointment), the sale just isn’t going to go through?
And if you are a buyer, take note: If your agent insists that you get pre-approved prior to going house shopping, it’s because he/she knows you are not even remotely ready to make an offer on something you like until this is out of the way.
Putting it more bluntly, if you aren’t in a position to make a legitimate offer, you’re just ‘sightseeing’. And if your agent is any good at all, he probably doesn’t have time to just go ‘sightseeing’.