As a real estate agent, one of the most important things you can do for your clients is make their home-buying experience memorable. In a good way.

As a professional in the industry, you’re an expert in helping families overcome the various challenges that can make the experience frustrating, time-consuming, and unfulfilling. One of the things you can suggest to help your clients experience a smooth journey toward homeownership starts before they’ve even looked at a home listing.

It’s not exciting. It’s kind of personal. They may think you’re being invasive or offensive. They may act standoffish about it. But in the long run, your recommendation that they start the process by getting pre-approved for a home mortgage loan will benefit them in ways they’d never imagine.

What is pre-approval?

Pre-approval is as close as your client can get to confirming their creditworthiness without having a purchase contract in place. They will complete a mortgage application, and the lender will verify the provided information. They’ll also perform a credit check.

If your client gets pre-approved, it doesn’t guarantee a mortgage will be approved for them. It does involve a thorough review of their financial background and sets realistic parameters around how much they can afford to borrow for a home purchase if their application is approved.

OK, that’s all well and good. But some of your clients might not feel comfortable allowing a bank to comb through their personal finances so that they can find out if they COULD get a home loan. They’d rather just get out there and look for their dream home.

But if you’ve already earned their trust, you’ll be able to make them understand that skipping the pre-approval process could be something they’ll regret later. And, the benefits they’ll gain from being pre-approved BEFORE finding the home they’ll fall in love with are well worth the decision.

Eliminates disappointment

Ask your client this question:

Have you ever gone to dinner at a restaurant, looked at the menu, and found the most scrumptious entrée you could ever imagine? You can practically taste its deliciousness – it must be yours. Then, you look at the price. So, you order the chicken tenders instead. L

Many homebuyers who are not pre-approved before looking at homes needlessly suffer a similar disappointment at some point in the process. That’s because they think they know how much of a house they can afford. They know how much income they earn and understand their current bills, so they have a ballpark idea of how much money they could borrow from a lender. But why guess and end up being wrong?

You’ve undoubtedly watched clients become giddy after finding their forever home, only to not qualify later for a large enough loan to afford the home. That’s when the “Pending” sign gets turned back to “For Sale” again.

You can save clients the trouble and tears by telling them stories about past clients who were not pre-approved and how they wished they had been in the end. Make sure they understand that the steps in the home-buying process start with pre-approval. If they try to jump ahead, they may regret it.

Speeds up the loan approval

Especially during a seller’s market, when demand for homes is high, and supply is low, the home-buying process moves fast. Some homes sell within days or even hours of being on the market.

So if your buyers want to pull the trigger quickly when they find what they want, they better have the ammunition to do so. Let them know that being pre-approved will give them an advantage over the competition who isn’t.

Being a pre-approved buyer speeds up the final loan approval because the lender has already obtained much of the required documentation during pre-approval. That means they can process the mortgage request more quickly, which matters to the seller – especially one who is pressed for time to sell the home.

Saves time searching

Just like finding the perfect home only to find out, they can’t afford it is disappointing; it wastes time looking for homes in the wrong price range.

Finding time to house hunt can be difficult. It’s almost like a part-time job. So your clients can maximize their time – and yours – by only looking for homes they know are in their budget.

By getting pre-approved, they’ll know the budget range they will likely get approved for. That will allow you only to show them listings that fit into that range. No wasting time on homes they can’t afford or would cost too much to renovate.

Increases negotiating power

Home bidding wars happen. So do situations where owners take hard stances on how much money they are willing to take for their home. That’s when having the power – and patience – to negotiate can play into your client’s hands.

Your clients should know that being pre-approved gives them more negotiating power and increases the likelihood that they could end up paying less than the asking price for a home.

That’s because sellers often prefer buyers with “pre-approved” financing, knowing that pre-approval is a sign that their offer is solid and that they will likely be approved for the amount they are offering. Sellers may be willing to accept a slightly lower offer from a pre-approved buyer than a higher one from someone who hasn’t even investigated whether they can afford to buy the home.


NMLS #110139
Equal Housing Lender
A division of Amerifirst Financial Corporation

Not intended as legal or financial advice. Consult your own professional.