Pre-Approval Makes All the Difference When Buying a Home

<article class="post-2231 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-2231"><span class="entry-date">June 22, 2021</span><div class="entry-header center-block text-center"><h1 class="entry-title">Pre-Approval Makes All the Difference When Buying a Home</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Pre-Approval+Makes+All+the+Difference+When+Buying+a+Home&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fpre-approval-makes-all-the-difference-when-buying-a-home%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
<div class="fb-share-button display-inline-block" data-href="https://gilliggroup.com/blog/pre-approval-makes-all-the-difference-when-buying-a-home/" data-layout="" data-size=""><a class="facebook solid fb-xfbml-parse-ignore" data-tracking="Post,Social Post Link Clicked,Twitter" href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fpre-approval-makes-all-the-difference-when-buying-a-home%2F&amp;src=sdkpreparse" target="_blank"><span class="force-hidden">Facebook</span></a></div>
<a class="pinterest solid display-inline-block" count-layout="horizontal" href="https://pinterest.com/pin/create/link/?url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fpre-approval-makes-all-the-difference-when-buying-a-home%2F&amp;description=Pre-Approval+Makes+All+the+Difference+When+Buying+a+Home" target="_blank"><span class="force-hidden">Pinterest</span></a>
<a class="linkedin solid display-inline-block" href="https://www.linkedin.com/shareArticle?mini=true&amp;url=https://gilliggroup.com/blog/pre-approval-makes-all-the-difference-when-buying-a-home/?shareSlug%3Dpre-approval-makes-all-the-difference-when-buying-a-home" target="_blank"><span class="force-hidden">LinkedIn</span></a>
<a class="email dashicons dashicons-email solid display-inline-block" href="mailto:?subject=From gilliggroup.com: Pre-Approval Makes All the Difference When Buying a Home&amp;body=Pre-Approval Makes All the Difference When Buying a Home%0D%0Dhttps://gilliggroup.com/blog/pre-approval-makes-all-the-difference-when-buying-a-home/" target="_blank"><span class="force-hidden">Email</span></a>
</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div>
<p><img alt="Pre-Approval Makes All the Difference When Buying a Home | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2021/06/11141848/20210622-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2021/06/11141848/20210622-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2021/06/11141848/20210622-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>You may have been told that it’s important to get <a href="https://www.simplifyingthemarket.com/2021/05/07/the-power-of-mortgage-pre-approval-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">pre-approved</a> at the beginning of the <a href="https://www.simplifyingthemarket.com/2021/05/26/buying-a-home-is-still-affordable/?a=712984-fa409495d5d70154d03a25e81e9540e2">homebuying</a> process, but what does that really mean, and why is it so important? Especially in today’s <a href="https://www.simplifyingthemarket.com/2021/05/28/homes-across-the-country-are-selling-fast-infographic-3/?a=712984-fa409495d5d70154d03a25e81e9540e2">market</a>, with rising home prices and high buyer competition, it’s crucial to have a clear understanding of your budget so you stand out to sellers as a serious homebuyer.<span id="more-44560"></span></p>
<p>Being intentional and competitive are musts when buying a home right now. Pre-approval from a lender is the only way to know your true <a href="https://www.simplifyingthemarket.com/2021/06/08/in-todays-market-listing-prices-are-like-an-auctions-reserve-price/?a=712984-fa409495d5d70154d03a25e81e9540e2">price range</a> and how much money you can borrow for your loan. Just as important, being able to present a pre-approval letter shows sellers you’re a qualified buyer, something that can really help you land your dream home in an ultra-competitive market.</p>
<p>With limited housing inventory, there are many more buyers active in the market than there are sellers, and that’s creating some serious competition. According to the <em>National Association of Realtors</em> (NAR), homes are receiving an average of <a href="https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index">5.1 offers</a> for sellers to consider. As a result, bidding wars are more and more common. Pre-approval gives you an advantage if you get into a multiple-offer scenario, and these days, it’s likely you will. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war.</p>
<p><em>Freddie Mac</em> <a href="https://myhome.freddiemac.com/blog/homeownership/20180926_strategies_for_winning_the_bidding_war.page">explains</a>:</p>
<blockquote>
<p><em>“By having </em><em>a <a href="https://myhome.freddiemac.com/blog/homeownership/20201001_get_pre_approved.page">pre-approval letter</a></em><em> from your lender, you’re telling the seller that you’re a serious buyer, and you’ve been pre-approved for a mortgage by your lender for a specific dollar amount. In a true bidding war, your offer will likely get dropped if you don’t already have one.”</em></p>
</blockquote>
<p>Every step you can take to gain an advantage as a buyer is crucial when today’s market is constantly <a href="https://www.simplifyingthemarket.com/2021/05/06/why-waiting-to-buy-a-home-could-cost-you-a-small-fortune/?a=712984-fa409495d5d70154d03a25e81e9540e2">changing</a>. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals such as a loan officer and a trusted real estate agent making sure you take the right steps and can show your qualifications as a buyer when you find a home to purchase.</p>
<h3><strong>Bottom Line</strong></h3>
<p>In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. Not only does being pre-approved bring clarity to your homebuying budget, but it shows sellers how serious you are about purchasing a home.</p>
</div>
</div></article>