Pre-approval of a mortgage is one of those requirements that many real estate agents have made standard. There are several reasons that pre-approval can save a lot of time, money, effort, and even lives.
- Realtor safety - Getting pre-approved shows that you're a real buyer. While that's probably not an issue for you, there have been several cases recently of realtors being killed on the job. By applying for and getting pre-approved for a mortgage, it creates a paper trail that bad person wouldn't risk.
- Sellers may ask for it - Smart sellers, especially those who have to clear out of their house for a showing, will require that the potential buyer be pre-approved for the house. That way they can be reasonably sure that they aren't wasting their time and needing to leave their home for someone who can't afford it.
- Negotiations are easier - If you're pre-approved, your Realtor can better negotiate a deal. They know that you have the money to buy the house and can get it paid off quickly. When they submit paperwork, it will help them to get the right price for you versus buyers who have to include a contingency that they get approved for a loan.
- Less frustration - Buyers can fall in love with homes that they can't afford. That leads to a lot of disappointment and frustration. By having a pre-approval in hand, you can be assured the house you just looked at is one you can afford and that will be approved for a loan. It also makes it easier for the realtor to stay in your price range, therefore not wasting their time or yours.
Getting pre-approved in no longer a luxury; it has become a necessity for most home buyers and requirement for most realtors.
The truth is that it's easy than it has ever been and, for many people, can take only minutes online.